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Differ between Divestment strategy and Liqui…

Differ between Divestment strategy and Liquidation strategy.

Differ between Divestment strategy and Liquidation strategy.

Chiranjibi Mar. 08, 2018

Divestment strategy involves the sale or liquidation of a portion of business, or a major division, profit centre or SBU.The Liquidation Strategy is the most unpleasant strategy adopted by the organization that includes selling off its assets and the final closure or winding up of the business operations. The option of a turnaround may even be ignored if it is obvious that divestment is the only answer. 

Liquidation as a form of retrenchment strategy is considered as the most extreme and unattractive. It involves closing down a firm and selling its assets. It is considered as the last resort because it leads to serious consequences such as loss of employment for workers and other employees, termination of opportunities a firm could pursue, and the stigma of failure