Restructuring / Turnaround Strategies Case Study

Ahold: The Road to Recovery

Abstract:

Royal Ahold NV, the fourth largest grocery retailer in the world, faced challenges since 2003, due to an accounting scandal that almost made the company bankrupt. In late 2003, Anders Moberg, the Chief Executive Officer of the company, undertook a three-year finance and strategy plan, termed 'road to recovery', to restore its financial strength. In accordance with the plan, Ahold was able to cut costs and became financially solvent by the end of 2005.

The case study highlights the strategies adopted by Ahold as a part of its revival plan, to recuperate from its financial downturn.

Pedagogical Objectives:

• To discuss the turnaround strategies of Ahold
• To analyse financial position of Ahold before and after the accounting scandal
• To understand the accounting norms accepted in the industry
• To discuss the control mechanisms required to maintain an optimum balance in the company
• To understand strategic concentration and divestment of resources to maximise revenue.

Keywords : Royal Ahold NV; Anders Moberg; Road to recovery; US Foodservice (USF); Accounting irregularity; Restructuring / Turnaround Strategies Case Study; Liquidity crisis; Misappropriation of profits; Bankruptcy; Re-engineering programme; Centralised reporting