A company can ________ an SBU by selling it or phasing it out and using the resources elsewhere.
A) divest
B) promote
C) expand
D) harvest
E) hold

Question

Quizplus · Accepted Answer

Divestment is a strategic option that allows a company to sell or phase out a business unit (SBU) that is not performing well or no longer fits with the company's overall strategy. By doing so, the company can free up resources and focus on its core competencies or invest in more promising SBUs. Divestment can also help a company to reduce costs, streamline operations, and increase profitability. Therefore, divestment is the best choice for the given scenario.
The other options, such as promoting an SBU, expanding an SBU, harvesting an SBU, or holding an SBU, do not necessarily involve selling or phasing out the SBU. Promoting an SBU refers to increasing its visibility or market share, while expanding an SBU means growing its operations or entering new markets. Harvesting an SBU involves maximizing its cash flow while minimizing investment, and holding an SBU means maintaining its current operations without significant changes. Therefore, these options are not suitable for the scenario where the company wants to sell or phase out an SBU.

A Company Can ________ an SBU by Selling It or Phasing