Why Would One Organization Want to Purchase an SBU That

question 50

Multiple Choice

Why would one organization want to purchase an SBU that has been classified as a "dog"?

• A) A need to generate large amounts of short-run cash
• B) A desire to expand into a rapidly growing market
• C) Possible synergistic effects on the buying organization
• D) A decision to adopt a retrenchment strategy
• E) A desire to complete a hostile takeover of the seller

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Definitions:

Leveraged Buyouts

The process of purchasing another firm largely through the use of borrowed funds, such as bonds or loans, to cover the acquisition expenses.

Managerial Efficiencies

Refers to the effectiveness and productivity with which managers and administrative leaders run a company, aiming to maximize output with minimal wasted effort or expense.

Target

In a business context, a target can refer to a specific goal or benchmark aimed to be achieved, such as sales targets or performance targets.

Individual Identity

The distinctive characteristics or personality that makes a person unique from others.