liquidation strategy retrenchment strategies - corporate level strategies - strategic management -...
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Manu Melwin JoyAssistant Professor
Ilahia School of Management Studies
Kerala, India.Phone – 9744551114
Mail – [email protected]
Retrenchment strategy• A retrenchment grand strategy is
followed when an organization
aims at a contraction of its activities
through substantial reduction or
the elimination of the scope of one
or more of its businesses in terms
of their respective customer
groups, customer functions, or
alternative technologies either
singly or jointly in order to improve
its overall performance.
Examples of Retrenchment strategy• General Motors of the
United States stopped
producing a number of
"makes" of automobile. GM
decided that it needed to
retrench by concentrating on
just a few "makes." It hoped
this would help it return to
profitability.
Liquidation Strategy• A retrenchment strategy which
is considered the most extreme and unattractive is the liquidation strategy, which involves closing down a firm and selling its assets. It is considered as the last resort because it leads to serious consequences such as loss of employment for workers and other employees, termination of opportunities where a firm could pursue any future activities and the stigma of failure.
Examples of Liquidation Strategy
• JC Penney recently sold its
Eckerd chain of drugstores to
focus on the corporation’s core
business of department stores
and Internet and catalog sales.
Studies show that between 33
per cent and 50 per cent of all
acquisitions are later divested.