Restructuring / Turnaround Strategies Case Study

Case Title:

Anders Moberg at Ahold: Turnaround Strategy with Re-engineering the Value Chain

Abstract:
In February 2003, Ahold, the largest retailer in the Netherlands, was charged with significant accounting irregularities. The company was accused of overstating its revenues and certain illegal transactions. The company also went through liquidity crisis and was on the verge of bankruptcy. To turn Ahold's fortunes around, Anders Moberg (Moberg), the ex-IKEA executive, was appointed as the CEO in May 2003. To stabilise the company, Moberg introduced a three-year 'Road to recovery' programme. This involved a major restructuring process at Ahold through 2003 to 2005. The programme brought stability to the company, and for 2006 Moberg planned to improve the company's profitability through effective re-engineering of the value chain. However, there are many challenges ahead and unless they are addressed quickly and effectively, Ahold could become a soft target for takeover.

Pedagogical Objectives:

• To understand the crisis at Ahold due to a major accounting scandal
• To understand the 'Road to recovery' programme introduced by Moberg to bring in stability to the company
• To discuss the relevance of Moberg's turnaround strategy, which included re-engineering the value chain, to improve the company's profitabilty
• To discuss how divestments, logistics and supply chain savings, efficient business model, cost-cutting measures and private labelling of brands can become effective strategies
• To debate whether Moberg's strategies would be able to save the company from becoming a takeover target.

Keywords :  Ahold; Anders Moberg; Re-engineering; Value chain; Financial crisis; Corporate governance; Turnaround strategies; Restructuring / Turnaround Strategies Case Study; Supply chain and logistics; Road to recovery programme; Divestments; Business model; Cost-cutting measures; Crisis management; Accounting scandal