WSJ Case Study Example | Topics and Well Written Essays - 1000 words

WSJ - Case Study Example McDonald decision had been driven by various reasons. First, the low performance of the units propels the decision to dispose them. Through this, the company will get to concentrate on the production of the products that accounts for a significant proportion of their return. McDonald was concerned about the slow performance and growth of the products therefore considered divestment necessary. The availability of other better areas to invest is also another reason why MacDonald considers the divestment essential. P & G has considered the disposal of Braun, Iams pet food, Duracell batteries and Pringles potato snacks and aimed to acquire consumer products portfolio of Schering-plough, Wyeth and Sara lee corps international household units. This therefore implies that McDonald intention is to maximize the most lucrative business and dispose the slow performing areas to improve the companies dwindling financial performance (Jargon & Chon, 2012). This strategy is therefore growth-oriented ad justifiable. In addition, McDonald decision is because of the lack of strategic fit of some of the proposed divestment units. For instance, Duracell that was acquired in 2005 is now considered a questionable fit in P & G board because of the low priced labeled batteries. There is also a complain that the prices experience a high level of fluctuation which made the profit of the business very volatile. Besides, Braun that realizes an annual sale of $1.3 billion is considered outside the P &G core businesses. The management is thus assessing Braun’s technologies application in other segments. McDonald reason of branding the company so that it is associated with particular products is also important. After the divestments, the company aims at focusing their effort in the production of the core products. Moreover, the decision to divest can be caused by the demand and pressure from the investors.