Exit Strategy

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Description of Exit Strategy. Explanation.

Definition Exit Strategy. Description.

A Exit Strategy is a strategic withdrawal of a corporation out of a typically declining or not very profitable market, brand, product, product line, or entire company.

Also it can be used to describe the method by which Venture Capitalists or a business owner intends to get out of a business / investment that he or she has created / made in the past. For example via an Initial Public Offering or selling their businesses to individuals or other companies.

Exit Barriers

All the factors that make it difficult for a company to end loss-making business activities. Exit barriers may include the following:

1. Social factors: required procedures regarding layoffs and the resistance of employees who are in danger of losing their jobs present very important exit barriers.
2. Strongly specialized assets: the liquidation value of a strongly specialized machine is often significantly lover than the utility value.
3. Connection of a product to one or more other products: for example through the collective use of means of production (a building or a machine).
4. Emotional factors: such as attachment to a certain product by the owner or management.
5. Government support: support for companies in trouble may present an exit barrier.

Exit Strategy Special Interest Group Special Interest Group (9 members)

Exit Strategy Forum   Recent topics   Quotes on Strategic Withdrawing. Quotations Hi, do you know of a remarkable, humorous quote by a famous person or a proverb related to strategic withdrawing and/or exit strategies? Please ent...

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Compare with: Harvest Strategy  |  Disaggregation  |  Turnaround Management  |  Spin-Off  |  Divestiture  |  Abandonment Value  |  Liquidation Value  |  Start-up Company  |  Outsourcing  |  Restructuring  |  Downsizing  |  Leveraged Buy-Out  |  Management Buy-Out

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