Business restructuring services

In the past companies in Vietnam benefited from a period of exceptional growth and access to relatively cheap funding as the real estate and stock markets soared – this brought about rapid, easy growth and high profitability. Companies took advantage to invest in a broad and varied range of opportunities to grow profits and revenues, with little need to consider strategy, structure or processes. Now that the market has slowed down, the same companies are being faced with a stark and difficult aftermath – a melting pot of disparate investments, high operating costs, inefficient operations, duplication and disorganisation and leaders struggling to manage a diverse, unrelated portfolio of struggling business lines.

Common issues

Lack of Strategy

 Too many unrelated business lines. It’s no longer clear what your core business or strategic imperatives are. Leaders and staff lack a vision or sense of purpose to rally behind.

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Shortage of Cash

Cash is tied up in many, under-performing or non-core investments, which are very difficult to spin off in the downturn without a clear exit strategy.

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Complicated corporate structure

After many rapid, diverse investments, you may be left with a duplicative, fragmented, costly and complex corporate structure. Each of your subsidiary companies has become a melting pot containing disparate lines of business – from manufacturing, trading, banking, real estate, fund management – all being managed by one entity and leadership team. The business may be too big and complex to be easily managed and controlled.

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Not getting the best from your talent

Your key leaders are trying to do the impossible – each holds multiple positions in many unrelated businesses. Your leaders can’t possibly have the expertise to manage the range of disparate businesses which they find themselves responsible for. You’re not getting the best from the talent you do have since your business lines are fragmented. Your structure is a barrier to effective communication and sharing of best practice and your leaders may be struggling to cope.

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Lack of quality information and reporting

Since your businesses are fragmented, it’s difficult to get accurate management information – for instance for financial reporting or human resource management. Without quality information, you are not able to make informed decisions.

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Inadequate systems and processes

During the period of growth, you didn’t take the time to establish effective systems and processes. Therefore business lines are operating with a lot of waste, duplication and inefficiency.

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High operating costs

As a result of the inefficiency in your processes, and due to the rising costs of people and raw materials across multiple lines of business, your operating costs are high. You need to quickly get a handle on your systems and processes to drive down your operating costs.

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How we can help

This is the time therefore to quickly re-assess and implement a coherent strategy, structure and processes and the human resources to support such changes. This is about getting the business under control and back on the right track to achieve sustainable growth and success. But how and where to start?

Re-define your company strategy

To recapture your core strengths, mission and vision and take advantage of the current market. This will include helping you re-prioritse your investments and to devise an exit strategy for non-strategic investments. This will also give you an anchor around which to rally your leaders and staff so they are all driving in the same direction.

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Re-arrange current investments

Into clear, related lines of business to reflect your renewed company strategy and focus. This will bring together all the related parts of your business under single management so that you are getting the best from your talent and will improve communications and the sharing of best practice. This will also help you to improve control since the business will be well structured and manageable.

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Debt restructuring

We will help to consolidate and reorganise your current debt, to reduce the burden and improve the overall financial terms of the facilities.

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Process improvement

We will help you to upgrade and streamline your systems and processes to improve the efficiency and effectiveness of your operations.

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Human resources

We can help you to ensure you have the right human resources in place to enable the achievement of your strategy. This includes ensuring you have the right people in the right roles, supported by effective HR policies and training. This will also look to the future to help you improve how you attract and retain talent as the company grows and develops.

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Re-organising your support services

We can help you to re-shape and centralise your support functions – such as HR, IT and finance into shared services for the new company structure. This will ensure you have consistent, high quality business support at a lower cost.

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Manage change

Getting from where you are today to your new vision, will require the support, determination and drive of your leaders and staff. We can help you to manage the change from design through to realisation of benefits, so that your people are engaged, involved and owning the change. This will ensure the change happens swiftly, with minimal disruption to operations and is sustainable.

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Your benefits

Business re-structuring will bring a range of benefits to your company and people, such as:

  • A clear focus and sense of direction
  • Reduced operating costs
  • Increased available internal cash
  • Improved, centralised cash management
  • Improved returns from re-prioritised investments
  • Improved control
  • Restructured debts with improved the financial terms
  • Improved management information to improve decision-making
  • Better growth
  • Better organisation of your people, increased leadership and staff motivation – better talent retention and productivity.

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Get in touch

Phan Phuong Linh

Director, Business Restructuring Services, PwC Vietnam

Tel: +84 28 3823 0796, Ext. 3313