Exit Strategy • Usually applicable to family-owned

businesses
o The way for business owners or
stakeholders to reduce involvement in the
business until they can leave it or let go of
it completely.
o If the business is successful, how does
one profit from the business/investment?
o If the business is not successful, how does
one limit losses and liability?

Common Exit Strategies

1) Merger and Acquisition

• Combining with a similar company
or being acquired by a larger one.
• Normally a win-win situation when
companies have complementary
skills and resources.
• For bigger companies, it is a more
efficient and quicker way to grow
2) Initial Public Offering (IPO)
• Offer the company ownership for
sale to the public
• Used to be preferred way of exiting
but success rates are lower.
3) Sell to Friendly Individuals
• Easy way to cash out
• Ideally, the buyer has more skills
and interest on operations and is
able to scale the company up
4) Liquidation and closing
• For failing businesses, normally
• Close up shop and liquidate (let go
or turn to cash) assets.
5) Family Succession
• Handing over the business and
enterprise to the next generation in
the family
• Common in the Philippines
 Growth Strategies
Ansoff growth matrix
o assists organizations to map strategic
product market growth
o also known as the Ansoff product and
market growth matrix
o is a marketing planning tool which usually
aids a business in determining its product
and market growth.
o usually determined by focusing on
whether the products are new or existing
and whether the market is new or existing.
o invented by H. Igor Ansoff
✓ Ansoff was primarily a mathematician
with an expert insight into business
management.
1) Market Penetration
• Market Penetration is about selling
more of the company’s existing
products to existing markets.
• To penetrate and grow the customer
base in the existing market, a
company may cut prices, improve its
distribution network, invest more in
marketing and increase existing
production capacity.
• This strategy focuses on increasing
the volume of sales of existing
products to the organization’s existing
market.
✓ How can we defend our market
share?
✓ How can we grow our market?
• There can be further exploitation of the
products without necessarily changing
the product or the outlook of the
product.
2) Market Development
• Market Development is about selling
more of the company’s existing
products to new markets.
• This strategy is about reaching new
customer segments or expanding
internationally by targeting new
geographic areas.
• This strategy focuses on reaching
new markets with existing products in
the portfolio.
✓ How can we extend our market?
✓ Through new market sectors?
✓ Through new geographical
areas?
3) Product Development
• This strategy focuses on reaching the
existing market with new products.
• Product Development is about
developing and selling new products
to existing markets.
• Companies could for example
make some modifications in the
existing products to give increased
value to the customers for their
purchase or develop and launch new
products alongside a company’s
existing product offering. Ex: Apple
iPhone
✓ How can we expand our product
portfolio by modifying or creating
products?
4) Diversification
• This strategy focuses on reaching
new markets with new products.
 Diversification can be either related Failed companies
or unrelated.
• It is about entering new markets with
new products that are either related
or completely unrelated to a
company’s existing offering.
• Concentric/horizontal
diversification (or related
diversification) is about entering a
new market with a new product that
a) Virgin Cola
is somewhat related to a company’s
o most highly-publicized of Virgin's failed
existing product offering.
businesses
• Conglomerate diversification (or o soft-launched exclusively on Virgin's
unrelated diversification) on the planes and cinemas
other hand is about entering a new o managed to peak at a small but
market with a new product that is significant 0.5% market share in the
completely unrelated to a company’s US (The Guardian).
existing offering. o Production stopped in 2012
Case Study: Diversification of VIRGIN GROUP ✓ US soft drink giants fought back.
OF COMPANIES "That business taught me not to underestimate
Company Profile the power of the world's leading soft drink
makers. I'll never again make the mistake of
• multinational private limited company
thinking that all large, dominant companies are
located in London, Britain
sleepy!"
• started in 1970 by Sir Richard Branson,
CEO b) Virgin Vodka

• has more than 250 companies and is o the whole of Virgin Drinks (1994)

organized into layers of holding turned out to be a failure (The

companies, employing over 25,000 Guardian).

people. ✓ One of the most surprising of

these products is Virgin Vodka.
• Virgin headquarter is located in London,
o The entirety of Virgin Drinks (Virgin
Britain and it has a lot of subsidiaries
Vines, Virgin Energy Shot, and Virgin
around the world such as in: UK, USA,
Ooze) — folded in 2007.
Australia, South Africa, Europe, and Asia.
o Virgin Wines (sold to Direct Wines in
• Its main market activities are Producing,
2005 and was bought out in 2013 by
Marketing, Providing Services and
management) is thriving.
Retailing.
✓ £50 million ($73 million) by 2018
(The Drinks Business).
c) Virgin Cosmetics
o Virgin Cosmetics sold beauty products,
jewelry, and homeware.
o sold online, in Virgin stores, and at
home parties as two companies: Virgin
Vie at Home and The Virgin Cosmetics
company (Virgin's website).
o In 2009, the business was sold in a
management buyout to Ros Simmons
and Ratan Daryani
✓ renamed Vie at Home (The
Telegraph).
✓ became defunct in 2011.
d) Virgin Clothing
o a line of men's and women's clothing,
footwear, and accessories aimed at
those aged from 18-to-35-years-old.
✓ sold in UK retailers and department
stores
✓ dissolved soon after its launch
(CEO world magazine).
e) Virginware
o expanded rapidly after its launch, as a
result of high online sales.
o It opened 30 retail stores between
2003 and 2004 (Retail Week) including
a flagship store near Carnaby Street in
London.
o (April 2005) the brand collapsed into
administration (the Telegraph).
o In July, Virginware closed with a fire
sale of 35,000 pairs of Virgin-branded
bras and G-strings.