restructuring and divestiture
DESCRIPTION
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 . - PowerPoint PPT PresentationTRANSCRIPT
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Restructuring and Divestiture BOH4M1-02Alexandra 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 StrategyLiquidation
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 LiquidationCease 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
operationsGoals: consolidating to gain short-term
efficiencies and gaining time for new strategy preparation for future success
+ Restructuring Restructuring Example: Air Canada financially restructured in 2003.
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 StrategyLiquidation
Restructuring Downsizing Rightsizing
Divestiture
+Scenario 1
______________________________________________________________________
+Scenario 2
+Scenario 3VAN ZANT OFFICE SUPPLIES
+Scenario 4
+Scenario 5
Becky’s Dance Place
Becky’s 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?
Retrenchment
Strategy
+ Review Challenge
What is the most extreme form of Retrenchment Strategy?
Liquidation
+ Review Challenge
What is a less extreme form of Retrenchment strategy that reduces the scale and/or mix of operations?
Restructuring
+ Review Challenge
Rightsizing is Downsizing with what type of focus?
Strategic
+ Review Challenge
Why might an organization sell off a part of their business?
Refocus on core
areas
+ Review Challenge
What is the opposite of an investment?
Divestment
+ 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
+
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