+ Restructuring and Divestiture BOH4M1-02 Alexandra Bishop, Becky McBroom, Celine Stewart, Patrick Street, Uros Radic + Agenda Completion of Initial Survey Seminar Application Activity Scenario Analysis Review Activity Apprentice Group Challenge Completion of Post-Seminar Survey + Agenda Completion of Initial Survey Seminar Application Activity Scenario Analysis Review Activity Apprentice Group Challenge Completion of Post-Seminar Survey + Initial Survey Complete the Survey marked Initial Survey You will have 2 minutes to complete it Please do not write your name on the survey When finished place the completed survey face down on your desk + Agenda Completion of Initial Survey Seminar Application Activity Scenario Analysis Review Activity Apprentice Group Challenge Completion of Post-Seminar Survey + Seminar Restructuring and Divestiture Strategies (pg. 237) Key Terms: Retrenchment Strategy Liquidation Restructuring Downsizing Rightsizing Divestiture + Retrenchment Strategy Defined: Changes operations to correct weaknesses Among master strategies used by businesses Goal: reverse or change approach to compete better Most extreme form is Liquidation Cease in operations and assets are sold + Retrenchment Strategy Liquidation Example: In October of 2009 General Motors announced its plans to shut down the Saturn Brand Occurred after a deal Roger Penske (owner of Penske Automotive) unexpectedly collapsed His intention were to buy the Saturn brand from the automaker This decision lead to the closure of many dealerships in the US and the loss of many jobs. + Restructuring Common and less extreme form of retrenchment Defined: Reduction in scale/mix of operations Goals: consolidating to gain short-term efficiencies and gaining time for new strategy preparation for future success + Restructuring Restructuring Example: Air Canada financially restructured in They got rid of hundreds of old aircrafts and acquired new ones on newer leasing terms. They also negotiated many new contracts and reduced their head count. + Downsizing Form of restructuring Defined: Reducing the size of operations Expected Benefits: Reduced costs and improved efficiency in operations Common way to downsize: cutting workforce size Most effective when strategic or focused on key performance objectives Known as Rightsizing + Downsizing Downsizing Example: General Motors filed for bankruptcy in 2009 They downsized by laying-off 75,000 to 100,0000employees. They also closed down more than a dozen production facilities. + Divestiture Another form of restructuring Opposite of an investment Defined: selling off parts of an organization to refocus attention on core business areas Goals: refocusing on core competencies, cutting costs, and improving efficiency Common use: over diversified organizations having trouble with complexity of operations Take advantage of internal assets; selling to a component that can stand on its own as an independent business + Divestiture Divestment Example: Ford divested: Sold various businesses that were not closely related to their core business such as Volvo, Mazda and Jaguar. + Agenda Completion of Initial Survey Introduction Seminar Application Activity Scenario Analysis Review Activity Apprentice Group Challenge Completion of Post-Seminar Survey + Scenario Analysis In your apprentice groups: analyze the given scenario and answer the questions All groups have 2 minutes to discuss and answer the questions Once finished you will briefly present your scenario and answers to the class INSTRUCTIONS + Scenario Analysis Recall the Key Terms: Retrenchment Strategy Liquidation Restructuring Downsizing Rightsizing Divestiture + Scenario 1 ______________________________________________________________________ + Scenario 2 + Scenario 3 VAN ZANT OFFICE SUPPLIES + Scenario 4 + Scenario 5 Beckys Dance Place Beckys Dance Company + Scenario 6 + Agenda Completion of Initial Survey Introduction Seminar Application Activity Scenario Analysis Review Activity Apprentice Group Challenge Completion of Post-Seminar Survey + Apprentice Group Challenge INSTRUCTIONS You will be asked a series of questions If your group or a group member knows the answer to a question: All group members must stand up with their hands clasped above their heads to be granted the chance to answer Participation will be rewarded + Review Challenge What form of strategy changes operations to correct weaknesses? + Review Challenge What is the most extreme form of Retrenchment Strategy? + Review Challenge What is a less extreme form of Retrenchment strategy that reduces the scale and/or mix of operations? + Review Challenge Rightsizing is Downsizing with what type of focus? + Review Challenge Why might an organization sell off a part of their business? + Review Challenge What is the opposite of an investment? + Agenda Completion of Initial Survey Introduction Seminar Application Activity Scenario Analysis Review Activity Apprentice Group Challenge Completion of Post-Seminar Survey + Post- Seminar Survey Complete the Survey marked Post Seminar You will have 1 minute to complete it Please do not write your name on the survey When finished put both surveys together for collection + Thank You