Restructuring / Turnaround Strategies Case Study

Case Title:

Aditya Vikram Birla Group Corporate Restructuring and Growth

Abstract:
In October 1995, Kumar Mangalam Birla took charge of the INR 7, 200 crore AV Birla Group, after the death of his father Aditya Birla. Birla Junior inherited India’s third-largest Indian business group, with a dominant presence in diverse businesses. He was just 27 at the time. Analysts were skeptical about the future of the group as the 27-year-old Kumar Birla had little experience. But the performance of the group has proved everyone wrong. After his takeover, the group turnover has grown fourfold. Kumar Birla has revamped the business portfolio and started looking seriously at sunrise businesses like telecom, branded apparel, software, ITES (IT enabled services) and insurance through joint ventures and acquisitions. The group has also consolidated its competitive position in traditional businesses such as cement, aluminium, copper, VSF (Viscose Stable Fibre) and carbon black. Will the junior Birla be able to manage and consolidate the old businesses, and at the same time transform the new economy businesses from question marks into stars?

Pedagogical Objectives:

• To discuss corporate restructuring as a growth strategy
• To discuss how companies perform the restructuring exercises
• To discuss when companies plan to do the corporate restructuring exercises
• To discuss how corporate restructuring helps a company to grow and achieve success
• To discuss the problems associated with corporate restructuring programme.

Keywords : Aditya Birla; Kumar Mangalam Birla; Seth Shiv Narayan Birla; Birla empire; Globalisation; Grasim; Restructuring / Turnaround Strategies Case Study; Ghansyam Das Birla; White cement sector; Birla Copper; Hindalco Industries Ltd; Indian Rayon; Mergers and acquisitions; Pharma companies; Sunrise industries; Birla Sun Life