Business exit as a deliberate strategy for incumbent firms

When a firm's particular business no longer fits with the changing environment, or when it appears to lack the necessary capabilities to survive, should it persevere in its efforts or seek an exit strategy? This article presents a practical framework aimed at helping firms to better plan and execute their exit strategies, which are often unduly neglected and poorly managed. Our framework hinges on three interrelated components, the exit championing, exit audit, and exit execution. Our major arguments are as follows: A business exit should be treated as a deliberate strategic choice, to be actively managed according to pre-established criteria and institutional procedures. Championing by vision-driven chief executive officers (CEOs) who are disciplined and courageous enough to make tough exit decisions is crucial to successful exits. In addition, a firm needs to develop its exit capabilities and skills so as to complete the exit in orderly and timely fashion.