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Liquidation strategy retrenchment strategies - corporate level strategies - Strategic management - Manu Melwin Joy

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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.

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Liquidation strategy retrenchment strategies - corporate level strategies - Strategic management - Manu Melwin Joy

  1. 1. Liquidation Strategy - Retrenchment Strategies Corporate Level Strategies
  2. 2. Prepared By Kindly restrict the use of slides for personal purpose. Please seek permission to reproduce the same in public forms and presentations. Manu Melwin Joy Assistant Professor Ilahia School of Management Studies Kerala, India. Phone – 9744551114 Mail – manu_melwinjoy@yahoo.com
  3. 3. Retrenchment Strategies
  4. 4. 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.
  5. 5. 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.
  6. 6. 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.
  7. 7. 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.

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