Re: ::: vuaskari.com ::: MGT603_Midterm papers Correction Thread by Binish

Question No: 23    ( Marks: 1 )    - Please choose one

 Smoothies Tire & Rubber Co. is selling its North American tire business to Avinza International, is an example of which type of strategy?

       ► Related diversification

       ► Retrenchment

       ► Divestiture

       ► Liquidation

Divestiture

Selling a division or part of an organization is called divestiture. Divestiture often is used to raise capital for further strategic acquisitions or investments. Divestiture can be part of an overall retrenchment strategy to rid an organization of businesses that are unprofitable, that require too much capital, or that do not fit well with the firm's other activities.

  Refrence:

http://www.investopedia.com/terms/d/divestiture.asp#axzz1eG4s8DIh

 

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