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Key Business Exit Strategies Explained

The document outlines various business exit strategies, including divestiture, which involves selling assets or divisions to improve financial health or refocus on core operations. It discusses reasons for adopting divestiture, such as raising capital or exiting unprofitable markets. Additionally, it touches on liquidation as a strategy for firms unable to meet their financial obligations, leading to insolvency.

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Enrico Buenaventura
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101 views1 page

Key Business Exit Strategies Explained

The document outlines various business exit strategies, including divestiture, which involves selling assets or divisions to improve financial health or refocus on core operations. It discusses reasons for adopting divestiture, such as raising capital or exiting unprofitable markets. Additionally, it touches on liquidation as a strategy for firms unable to meet their financial obligations, leading to insolvency.

Uploaded by

Enrico Buenaventura
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Exit Strategies (1st slide)

A business exit strategy is the organization’s strategic plan to sell the ownership in a company to an
investor or to another company. (2nd slide)

Divestiture (3rd slide)

Divestiture is the sale or disposal of assets, product lines, intellectual property rights, or a company
subsidiary or division in exchange for cash or securities. (4th slide)

Reasons when firms adopt this strategy: (5th slide)

 Sell a losing business to a company capable of rehabilitating.


 Exit its current market and pursue a new strategic direction.
 Raise working capital to fund existing or new projects.
 Refinance or pay off existing debts to strengthen the balance sheet
 The business no longer has synergies with its core business.
 Focus on the company’s core business.

Corporate Restructuring (6th slide)

Divestiture ensures that the firm regains or strengthens its competitive advantage. (7 th slide)

Liquidation (8th slide)

A strategy implemented by a firm wherein the firm shuts down its operation by selling its remaining
assets and distributing the proceeds to pay off the debts. (9th slide)

Insolvency (10th slide)

According to FRIA, insolvency refers to the financial condition of a debtor that is generally unable to pay
its liabilities as they fall due in the ordinary course of business or has liabilities that are greater than its
or his assets. (11th slide)

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