Marketing: Questions
Occasionally, when examining marketplace considerations, an organization might establish strategies for consolidation. Name the 4 ways to accomplish this objective, and give an example.
Strategies for consolidation, in basic terms, seek to enhance a firm's ability to manage that which it is undertaking at a specified time. In that regard, therefore, such strategies come in handy in protecting a firm's status in the marketplace, via non-growth means. The most common strategies for consolidation, according to Berkowitz (2010) include divestment, pruning, retrenchment, and harvesting.
Divestment in the words of Berkowitz (2010, p. 60) has got to do with "selling off a business or product line." As the author further points out, this particular strategy is in most cases utilized "when an organization believes that there is a weak fit between its major core business and a particular product...
60). For instance, a firm that attributes its problems to a certain division's poor performance could make use the divestment strategy.
The next consolidation strategy is pruning. In this case, an entity lessens the products it serves to a target market. As Berkowitz (2010) points out, in this case, the firm does not exit the market totally; instead, it lessens the set of products it offers to the marketplace. A good example of active utilization of this strategy is when a firm considers a market segment very costly or to small to justify continued service.
Third, there is the retrenchment strategy in which case, as Berkowitz (2010, p. 60) points out, "a company decides to withdraw from certain markets." Here, a firm could seek to reduce the commitment it has to a certain range of existing products or services by exiting markets considered weak. By adopting this strategy,…
