With Apple (Nasdaq:AAPL) recently supplanting Microsoft (Nasdaq:MSFT) as the most valuable tech company in the world, there is no doubt that it is one of the most remarkable turnarounds in U.S. corporate history. From a foundering company teetering on the edge of irrelevance, Apple has become one of the most innovative consumer-focused technology companies.
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Apple is not alone, though. Many other corporations have danced on the brink of collapse and found their way back. Here we take a look at some other well-known major companies that had their flirtations with trouble and came back stronger than ever.

McDonald's (NYSE:MCD) was never at any serious risk of going out of business, but in the early 2000s the company was sliding toward irrelevance. It had been on an aggressive expansion kick and in all of the excitement of opening new stores, has managed to find it way out of the woods. In the meantime, management was also amusing itself with new non-core ventures like Boston Market, Chipotle's (NYSE:CMG), Donato's, and Pret-a-Manger.

McDonald's recovered in large part by simply reverting to being McDonald's again. McDonald's had originally arisen out of the drive-through boom of the 1950s by focusing relentlessly on value, quality and simplicity. In order to restore its mojo, McDonald's focused on driving costs out of the system (allowing for the creation of the dollar menu), restoring food quality and cleanliness, and carefully adding new concepts to the menu (like salads and coffee) so as not to overcrowd the system with a lot of options that customers did not want.

The result? From a low of about $12 a share and rampant fears that health-conscious consumers were abandoning the restaurant to a stock price of over $67 and acknowledged leadership in the global restaurant wars.

Like McDonald's, IBM (NYSE:IBM) was more at risk of perpetual irrelevance and low-growth than true extinction. The company had stagnated under a stifling corporate culture and an ill-considered attempt to be dominant in consumer and business technology hardware and software.

Similar to Apple, IBM under the leadership of Lou Gerstner refocused the corporate culture on external competition and serving the customer. IBM also pared back struggling projects like OS/2 and moved away from those businesses where competition was moving away from the company's core skills (like personal computers). In place of the old IBM, a new IBM emerged that was focused on a smaller number of core hardware businesses, a growing business-oriented software business, and a lucrative IT services business.

From a low of around $10 and widespread dismissal, IBM now stands at $125 a share and is considered a leader in wide categories of business-focused IT.

Continental Airlines
The idea that any airline, or at least any airline other than Southwest Airlines (NYSE:LUV), could be a success is probably anathema to many investors. Yet, there is a strong case to be made that Continental (NYSE:CAL) has managed to straighten up and fly right.

Continental drove itself into bankruptcy in the usual manner - the company made a number of ill-timed acquisitions and integrated them poorly, management became distracted by the acquisitions and let standards slip across the company, passengers became severely peeved by the low standards, and high jet fuel prices prompted by the first Gulf war created an unsustainable cost structure.

From that point, however, Continental has gotten most things right. Management shored up its hub system, refurbished its planes, brought employees on board with profit-sharing and more decentralized authority, and honed its network to focus on places that people actually wanted to fly. Along the way, the company made great strides in on-time performance, baggage handling and general customer satisfaction. That has translated into the highest satisfaction scores among major airlines (excluding low-cost carriers like Southwest) - for nine straight years, Continental has been selected as the airline with one of the highest consumer satisfaction.

This has not necessarily translated into fine stock market performance, particularly as the stock has sunk back into the single-digits several times over the past 10 years. Despite the turbulence in the airline industry witnessed in the last decade, Continental managed to stay out of bankruptcy.

Last and by no means least is the turnaround story of ABB (NYSE:ABB). This global leader in automation and power flirted with bankruptcy in 2002 under a crushing weight of debt, a maze of poorly-integrated acquired businesses (the acquisitions of which contributed significantly to that debt), and significant asbestos liability (also brought in due to an acquisition).

To its credit, and playing against stereotype for European managers, ABB management streamlined the organization and refocused almost exclusively on the now-core businesses of automation and power equipment. The company also dealt quickly with the asbestos liability and worked not only to rein in costs across the organization, but to claw back some of the decentralization that came with the acquisitions.

From the near-death experience of a $1 stock, ABB has come back to be recognized as a global leader in its markets, even as the recession has undeniably taken some of the wind out of the company's sails for now.

The Bottom Line
By no means are these the only successful turnaround stories in the market. Other companies like Western Digital, U.S. Steel, Waste Management, Nutrisystem and Orbital Sciences are to be commended for facing their mistakes and weaknesses and correcting them. One thread that weaves through this all is this - companies where management takes its eyes off the core principles that built the company and become infatuated with expansion or acquisition often find trouble. Luckily for investors, there is often a path back from the brink for those companies mature enough and brave enough to face their failings and get back to doing what they do best.

Catch up on the latest financial news in Water Cooler Finance: The iPhone Launch, Buffett's Lunch And BP's Lashing.

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