Case Details: |
Price: |
| Case Code |
: |
BSTR382 |
For delivery in electronic format: Rs.
600;
For delivery through courier (within India): Rs. 600 + Rs. 25 for Shipping & Handling ChargesThemes
Corporate restructuring / Turnaround strategies |
| Case Length |
: |
27 Pages |
| Period |
: |
2005-2010 |
| Pub Date |
: |
2010 |
| Teaching Note |
: |
Not Available |
| Organization |
: |
DLF Limited |
| Industry |
: |
Real Estate |
| Countries
|
: |
India |
Abstract:
|
This case study is about India's largest real estate company DLF Limited's (DLF) struggle in the stressed market conditions due to the global financial crises which started in the year 2007. The company which created India's biggest IPO in history, raising more than US$ 2 billion, was counting on the continued growth of realty sector in the country. However, the depressed economic situation coupled with credit crunch led to a significant decline in the demand and property prices. While the company had ambitions plans to launch several properties ranging from Special Economic Zones (SEZs), large townships, hotels, and convocation centers, the market conditions took its toll on the business. These factors disturbed the cash flow cycle of DLF, making it difficult for it to repay its debt on time. The debt to equity ratio of the company increased to all time of high of 0.7 in June, 2010, with inadequate debt paying capacity.
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In light of these factors, DLF had to exit from many of its projects either before, or even in middle of starting the operations. The company devised several strategies overcome the prevailing situation. By the mid-2010, DLF had a much leaner business structure, but it still facing various challenges in bringing its business back into shape.
Issues:
» Understand the real estate sector in India and issues and challenges faced by the market leader in this sector.
» Understand the impact of global financial crises on business dynamics.
» To analyze how macro and micro economic factors influences the success of an organization.
» Determine the internal competencies of business though SWOT analysis.
» Examine the role of external factors influencing business thorough PESTEL analysis.
» Appreciate the importance of healthy cash flow cycle for a business.
» Determine the best product mix, thorough analysis of demand, revenue streams, and profitability from different verticals of business.
» Understand the criticality of decision making process in business, especially during stressed market conditions.
» Scrutinize the impact of increasing debts on planning, execution, and evaluation of business strategy.
» Understand the importance of tailoring business tactics and strategy to fit specific industry and company situations.
» Appreciate the role of corporate restructuring and turnaround strategies.
Contents:
Keywords:
Corporate restructuring, Turnaround strategy, Strategic fit, Product mix, SWOT, PESTEL, Micro economic, Macro economic, Global financial crisis, Divestment, Market leader, DLF
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