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Posted: Sat 8:48, 26 Oct 2013 Post subject: hollister Implementing Divestment Strategy |
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Companies undergoing financial constrains use the divestment strategy to ensure economic stability. This is because divestment is a form of [url=http://www.agentparadise.com]woolrich outlet[/url] retrenchment scheme where an organization downsizes an operating division. Organizations undergoing financial difficulties have no ability to accommodate non profiting products, or division. Thus, the only way to stay in business is to eliminate the scope of business with operational crisis (Coyne, p 50). Divestment entails the elimination of a portion of the organization such as a product line or operating division (Kazmi and Kazmi, p 170). This means that the section that the organization selects whether a [url=http://www.sandvikfw.net/shopuk.php]hollister outlet sale[/url] product line, or operating division can be sold, or closed, or spin off.
The rationale of eliminating sections of the organization that seems to have declining performance is to scrap off unrelated and unprofitable portions (Coyne, p 50). Therefore, in the case of Thomas Cook airline one of the oldest airline companies in US, divestment will ensure the growth of the [url=http://www.rtnagel.com/louboutin.php]louboutin pas cher[/url] airline, and provide international competitive merits. The merging of Thomas Cook AG with My Travel Group in 2007 formed Thomas Cook Group which is among the reliable worldwide travel agencies (Itv.com). According to The Guardian business news, Thomas [url=http://www.fibmilano.it]woolrich[/url] Cook shareholders have agreed to sell off £330 (Moulds). This is the first time [url=http://www.davidhabchy.com]barbour sale[/url] the airline decides to sell-off part of the airline section after 171 years of operation.
Over the 171 years, the travel urgency has had mixed reactions, and [url=http://www.mxitcms.com/abercrombie/]abercrombie[/url] despite being among the oldest airline in US, the airline has numerous operational crisis; the company has had numerous financial crises because some section of the airline has not been yielding any profit. The presence of unprofitable section in any business means that management will continue to invest money in unproductive section, and this is an operation dilemma. Thus, the application of divestment strategy will ensure that section of the airline that was not functioning effectively is sold. This means that the airline will not have unproductive sections that have been affecting the growth, and development of the airline. The sell-off agreement is indeed a positive step toward the Thomas Cook Company in the international business. The sell -off in the Thomas Cook airline will provide the company with sufficient investment [url=http://www.rtnagel.com/airjordan.php]jordan pas cher[/url] that the airline can use to establish a competitive advantage in the international business.
There are many ways upon which an organization may implement a divestment strategy. This is because a divestment strategy can either involve closure, spin-off, or sell- off of a business section. Thomas Cook airline will implement the divestment strategy through selling off a section of the airline, and allowing that section to operate as an independent business. The airline plans to sell -off a section of the airline fleet to five Spanish hotels. These Spanish hotels have managed to raise £239m (Moulds). Additionally, the airline shareholders intend to sell off the Thomas Cook India Company for £94m (Dominic).
The methods of implementing a divestment strategy vary on the nature and value of the company section in question. Unlike other organizations that implement the divestment strategy in closure, Thomas Cook airline will sell part of the airline fleet to Spanish hotels. [url=http://www.gotprintsigns.com/abercrombiepascher/]abercrombie pas cher[/url] The money received in this sell- off will help the Thomas Cook Group will address the financial crisis that resulted [url=http://www.thehygienerevolution.com/hollister.php]hollister france[/url] when grim trading forced the airline to lend money (Itv.com). [url=http://www.agentparadise.com]woolrich sito ufficiale[/url] The declined performance in France and US led to a loss of [url=http://www.sandvikfw.net/shopuk.php]hollister sale[/url] £263m in the winter, and the company has been struggling with financial stability. The sell- off of the section of the airline fleet will provide the travel agency with sufficient funds to stabilize the operations (Itv.com).
In conclusion, the sell -off of a section of the Thomas Cook airline group will provide the company with sufficient investment that shall help resolve the France, and US airline revenue decline. The financial stability will provide a steady growth to the Thomas Cook airline group, and give a competitive airline service.
Work cited
Coyne, John, and Mike Wright. Divestment and Strategic Change. Oxford, OX: Philip Allan, 1986. Print.
Dominic Jeff. Thomas Cook's £94m India deal eases debts. Retrieved from: Josephine Moulds. Thomas Cook shareholders agree £330m sell-off. The Guardian newspaper.
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