PepsiCo divested its group of fast-food restaurant businesses (KFC, Pizza Hut, and Taco Bell)to Yum! Brands in order to allow PepsiCo to focus on its core soft drink and snack-food businesses. A useful guide to determine whether or when to divest a business subsidiary is to ask,
A)"Have we missed the opportunity to milk these cash cows?"
B)"If we were not in this business today, would we want to get into it now?"
C)"Can't we derive a parenting advantage with these businesses?"
D)"Do we need to do the math to achieve 1 + 1 = 3 outcomes from these diversified businesses?"
E)"Will these three businesses pass the 'cost-of-exit' test?"

Question

Quizplus · Accepted Answer

The best question to ask before divesting a business is "If we were not in this business today, would we want to get into it now?" This helps to evaluate the current market and potential for growth or decline in the industry, and whether divestment is the best option for the company's overall strategy.

PepsiCo Divested Its Group of Fast-Food Restaurant Businesses (KFC, Pizza