RETRENCHMENT STRATEGIES
A company may pursue retrenchment strategies when it has a weak competitive position in some or all of its product lines resulting in poor performance-sales are down and profits are becoming losses. These strategies impose a great deal of pressure to improve performance.
(i) Turnaround Strategy
(ii) Captive Strategy
(iii) Sell Out / Divestment Strategy
(iv) Bankruptcy/ Liquidation Strategy
[Note: The benefit of liquidation over bankruptcy is that the board of directors, as representatives of the shareholders, together with top management makes the decisions instead of turning them over to the court, which may choose to ignore shareholders completely.]
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