One of the SBUs under the Retro Group of companies is not generating a satisfactory amount of business. Extensive analysis shows that the company is losing its market share because its competitors have more sustainable processes. Analysts also feel that the growth prospects in this industry are extremely limited. Which of the following organizational strategies should the company adopt?
A) focus
B) stability
C) retrenchment
D) growth
E) divestiture

Question

Quizplus · Accepted Answer

Given that the SBU is losing market share and the growth prospects in the industry are limited, divestiture is the best option for the company. This would involve selling the SBU to another company or investor, freeing up resources that can be invested in more profitable areas of the business. This allows the company to focus on its core strengths and achieve growth in areas that are more profitable.

One of the SBUs Under the Retro Group of Companies