The Forrester Group of companies has many products, including a fertilizer manufacturing unit. While this unit has never been a source of high revenues in the past, the SBU has increasingly become an area of concern. For the last few years, this SBU has not generated enough business for the Forrester Group and the parent company does not see things changing in the future without substantial investment. In a market with low growth potential, its already low market share has declined further. Which of the following strategies is the Forrester Group likely to choose for this SBU?

Question

Quizplus · Accepted Answer

Given that the fertilizer manufacturing unit is not generating enough business, has low market share, and has no potential for growth without substantial investment, the Forrester Group is likely to choose divestiture strategy. Divestiture strategy involves selling off or closing down an SBU that is not contributing to the overall growth and profitability of the company. By divesting the fertilizer manufacturing unit, the Forrester Group can channel its investments and resources into other more profitable SBUs.

The Forrester Group of Companies Has Many Products, Including a Fertilizer