This 3 page paper examines the different decision that could have considered when part of a business was sold and another built. The paper is based in a case study supplied by a student. The bibliography cites 7 sources.
Name of Research Paper File: TS14_TEbusdec.rtf
Unformatted Sample Text from the Research Paper:
attitude, as he is seeking to jump out of a business where he sees the future being harsh with increased competition, and lowing profits, in short the life and property
industry is one that is entering the lifecycle stage of maturity (Kotler, 2003). He sells the US part of this business and reinvests in an area where he thinks there
is growth potential with future profits, but also retains some of the other business to spread risk. However it may also
be argued that Huber is a risk taker. He is looking to increase profits and moves into an industry where he believed there will be future profits. To attain this
aim he sells an established business arm and buys two new companies in an industry that is still not settled. He buys two companies and the motivation appears to
be the size of the company and the ability to claim to insure one in ten Americans. This leaping into an industry with little consideration is the trait of a
risk taker (Thompson, 1998). Question 2 When Huber makes the decision to sell off the insurance business he foresees a change in the competitive environment. As an
industry, or product, reaches maturity, the consumers become more aware and are able to take a more active role in the decision making process, asking more questions. Along with this
increased consumer power the profitability of products at this stage then to reduce (Kotler, 2003, Hooley et al, 2000). Therefore when deciding to sell it was likely that there was
a change with the insurance arm moving from the position of a cash cow or shooting star to a dog, and as such the selling off of the unit may