Binding: Digital
Format: Download: PDF
Label: Harvard Business Review
Manufacturer: Harvard Business Review
Number Of Pages: 12
Publication Date: May 01, 2002
Publisher: Harvard Business Review
Release Date: October 25, 2008
Sales Rank: 2317398
Studio: Harvard Business Review

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Editorial Review:

Product Description:
Although most companies dedicate considerable time and attention to acquiring and creating businesses, few devote much effort to divestitures. But regularly divesting businesses--even good, healthy ones--ensures that remaining units reach their potential and that the overall company grows stronger. Drawing on extensive research into corporate performance over the last decade, McKinsey consultants Lee Dranikoff, Tim Koller, and Antoon Schneider show that an active divestiture strategy is essential to a corporation's long-term health and profitability. In particular, they say that companies that actively manage their businesses through acquisitions and divestitures create substantially more shareholder value than those that passively hold on to their businesses. Therefore, companies should avoid making divestitures only in response to pressure and instead make them part of a well-thought-out strategy. This article presents a five-step process for doing just that: prepare the organization, identify the best candidates for divestiture, execute the best deal, communicate the decision, and create new businesses. As the fifth step suggests, divestiture is not an end in itself. Rather, it is a means to a larger end: building a company that can grow and prosper over the long haul.




Rating: - Divestiture - an often overlooked strategy
Lee Dranikoff is an Associate Principal, Tim Koller is a Principal, and Antoon Schneider is an Engagement Manager at management consultancy McKinsey & Company. This article was published in the May 2002-issue of the Harvard Business Review.

Research into 200 largest US corporations from 1990 to 2000 shows that those companies actively managing their business portfolios through acquisitions and divestitures create substantially more shareholder value than those that passively hold their ... Read More

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