Product exit strategy refers to adjusting product structure in production and operation according to product life cycle, demand change and marginal contribution of products to enterprises. Industrial withdrawal strategy refers to the decision made by enterprises to gradually withdraw from certain industries according to their own development strategies, national industrial policies and their own resources. It is manifested in the idea of adjusting the existing industrial structure, stripping off non-main businesses and concentrating resources to develop main businesses. The overall exit strategy refers to the overall transfer of the control rights of business units or subsidiaries that are poor in return on investment and weak in control due to various reasons and do not meet the development strategy of enterprises. It exits through closure, liquidation, bankruptcy and sale.
The exit strategy of enterprises can be roughly divided into three situations: natural exit, passive exit and active exit, and the research focus of enterprise exit strategy should be active exit. The main reasons for enterprises to implement the market exit strategy are: withdrawing from inferior areas; Focus on the main business and cultivate core competence; Optimize resource allocation; Enter new business areas, etc.
Withdrawal refers to the withdrawal of an enterprise from its original business field, that is, giving up production or providing products or services in a specific market. Withdrawing from a market or an industrial field also includes at least two elements: one is the degree of withdrawal, that is, the market share that the quitter gives up at the same time; The other is the speed of exit, that is, once exit occurs, at what speed.
There are several main factors that hinder the exit:
(1) The sinking cost is high. The fixed assets formed by enterprise investment are highly professional, so in many cases, it is not easy to transfer or sell assets for specific purposes. When an enterprise withdraws from an industry or industry, it cannot recover these highly specialized assets, and its value cannot be recovered. This irrecoverable cost constitutes the sunk cost when the enterprise exits. When the sunk cost is large enough, enterprises will generally choose to stay in the industry or industry temporarily. (2) The cost of dismissing employees is high. Many times, when an enterprise withdraws from an industry, it needs to dismiss workers, and dismissing workers has to pay various expenses such as pensions and dismissal wages. These expenses are the price that enterprises have to pay to quit an industry. Similarly, when the price is too high, enterprises will choose not to quit the industry or industry.
(3) Combined with production problems. Joint production exists in many industries. Because of joint production, it is difficult to change the production of one product because of the change of demand for another product, especially when quitting. Although the market of one or some products has shrunk seriously, it is difficult for the whole enterprise to quit easily.
(4) Policy or regulatory obstacles. For a certain purpose, the government often restricts the enterprises that produce certain products from quitting the industry by formulating policies and regulations, especially those that produce public products related to national security and people's lives. Even if the enterprise is in a loss state, it is often difficult to withdraw from the industry or industry because of the constraints of national laws and regulations.