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PwC's new global management survey reveals that neglect of divestment strategy is damaging business

PricewaterhouseCoopers (PwC) Optimised Exit Services' survey of senior management worldwide reveals that an overwhelming majority of companies fail to make the most of divestments. While more than 80% of companies believe that divestments are an important element of enhancing competitive advantage, fewer than half have a divestment strategy, and only a tiny fraction have a dedicated divestment team.

 

According to the survey:

 

  • 83% of companies worldwide say divestments are an important component of enhancing competitive advantage ? almost important as M&A (89%) but;

  • only 42% of companies have a divestment strategy and;

  • 71% of the respondents felt that in half the cases the optimal value of a divested business asset is not realised

 

?The world's leading companies are failing to capitalise on divestments as an important component of enhancing competitive advantage,? says Barry Ross, partner in the Optimised Exits Services team. ?While they can clearly see the benefits, because of the apparent stigma attached to exiting a business, many companies reluctantly enter into divestitures under duress.

 

?However, they are missing a trick. By strategically pruning even healthy businesses from portfolios, companies can breathe life into their other operations that present more growth potential.

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