In: Economics
Define Defense Strategies (Retrenchment, Divestiture & Liquidation)
Ans) The Retrenchment, Divestiture and the Liquidation are the independent choices constitute forms of the turnaround schemes.And these are the remedial actions done to run the firm constantly from a item or product to another.
The merits of the retrenchment, divesture, and liquidation schemes really helps the firm to phase out a particular item in the reduction level of that items life stages.
This also helps the company to avoid the mismatches with the company's schemes or companies fit.
This will increase the profit of the company's by transporting resources into other places.
The company with the turnaround schemes involves:
Retrenchment- This means the restricted taking away from one or more items or the market section.
Divestiture- This means the selling of one or more workable businesses to next company.
Liquidation- This means the selling of property or any other assets of the company that didn't, by itself, compose a workable operation.
One of the new movement in the diversification has been restructuring the firms to concentrate on items with large growth ability and to relieve those with the restricted ability.And with the restructuring is the leverage buyout, which means the firms bought with the amount which are taken as a lone from the banks .These restructuring and the leverage buyout are some kind of divestiture.
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