Declining Demand, Divestiture, and Corporate Strategy

It is not surprising that in 1979 this in-depth analytical study won the General Electric Award for Outstanding Research in the field of strategic planning.

What strategies are best for businesses in decline? What are the feasible alternatives? Is divestiture the answer? When might a company be well advised to increase its investment in its declining business? This book addresses such questions in detail, exploring the challenges of declining demand for a company's products and providing strategies for coping with the decline. Using empirical data from sixty firms in seven different industries, Kathryn Rudie Harrigan shows how the nature of a declining business's environment affects strategy alternatives appropriate to that particular business.

Kathryn Rudie Harrigan is the Henry Kravis Professor of Business Leadership at Columbia University, where she teaches the "Corporate Growth and Development" course as well as other strategy electives and core courses. She is the author of several books and numerous articles. A business leader, corporate director, and respected scholar, she has received many honors including the Columbia Business School's Schoenheimer Award for Excellence, an IBM Research Fellowship in Business Administration, and a Division of Research Fellowship from Harvard Business School, were she also earned a D.B.A.

	List of Figures and Tables	ix
	Foreword by Jesse W. Markham	xi
	Acknowledgments	xiii
Chapter 1	The Problem of Declining Demand	1
	Strategic Questions Concerning the Endgame	2
	Characteristics of a Declining Business	3
	Reasons for Product or Business Decline	5
	Characteristics of the Strategies Suggested for Declining Industries	5
	The Research Problem	7
	An Overview of the Endgame Strategic Study	8
Chapter 2	The Endgame Strategy Model: The Conceptual Framework	13
	The Objectives of Endgame	13
	What Are the Alternatives?	14
	The Firm's Choice of Endgame Strategies	20
	The Endgame Determinant Variables	20
	Demand Characteristics and Endgame	22
	Industry Structural Traits	25
	Strategic Needs of the Firm Exogenous to the Endgame Industry	36
	The Endgaming Firm's Internal Strengths Relative to Rivals in the Declining Industry	40
	A Simplified Strategic Matrix	43
Chapter 3	Methodology of the Endgame Research Study	53
	Selection of the Sample	53
	Summary and Comments Regarding the Field Research Study	55
	A Description of the Data	56
	Limitations of the Data	56
Chapter 4	The Endgame in the Electronic Receiving-Tubes Industry	59
	A Description of the Receiving-Tubes Industry	59
	The Endgame in the Receiving-Tubes Industry	76
	A Chronological Description of the Endgame in the Receiving-Tubes Industry	79
	Analysis of the Receiving-Tubes Endgame	88
Chapter 5	The Endgame in the Synthetic Soda-Ash Industry	105
	A Description of the Soda-Ash Industry	105
	The Endgame in the Soda-Ash Industry	117
	A Chronological Description of the Endgame in the Soda-Ash Industry	117
	Analysis of the Soda-Ash Endgame	126
Chapter 6	The Endgame in the Synthetic Baby-Foods Industry	139
	A Description of the Baby-Foods Industry	139
	The Endgame in the Baby-Foods Industry	153
	A Chronological Description of the Endgame in the Baby-Foods Industry	155
	Analysis of the Baby-Foods Endgame	169
Chapter 7	The Endgame in the Synthetic Electric Percolator Coffee-Maker Industry	185
	A Description of the Electric Percolator Coffee-Maker Industry	185
	The Endgame in the Electric Percolator Coffee-Maker Industry	202
	A Chronological Description of the Endgame in the Electric Percolator Coffee-Maker Industry	203
	Analysis of the Electric Percolator Coffee-Maker Endgame	211
Chapter 8	The Endgame in the Synthetic Cigar Industry	229
	A Description of the Cigar Industry	229
	The Endgame in the Cigar Industry	247
	A Chronological Description of the Endgame in the Cigar Industry	248
	Analysis of the Cigar Endgame	257
Chapter 9	The Endgame in the Synthetic Rayon Industry	273
	A Description of the Rayon Industry	273
	The Endgame in the Rayon Industry	288
	A Chronological Description of the Endgame in the Rayon Industry	300
	Analysis of the Rayon Endgame	289
Chapter 10	The Endgame in the Synthetic Acetylene Industry	317
	A Description of the Acetylene Industry	317
	The Endgame in the Acetylene Industry	336
	A Chronological Description of the Endgame in the Acetylene Industry	336
	Analysis of the Acetylene Endgame	347
Chapter 11	Generalizations Concerning Strategies for Declining Industries	367
	Endgame Environments	369
	Industry Characteristics	372
	Strategic Exit Barriers	382
	The Influence of Endgaming-Firms' Relative Internal Strengths upon Endgame Strategy Formulation	384
	Sketches of Competitive Performances in Endgame	385
	Firms' Performances in Endgame	388
	A Comparison of the Strategic Matrix's Predictions with Observed Performances	389
Chapter 12	The Policy Implications of the Endgame Study	395
	Implications for Business Strategists	397
	Implications for Public Policymakers	403
	Bibliography	407
	Index	419
	About the Author	425