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Consolidation, Quelle: ThinkstockThinkstock
Consolidation is often seen as a way to try and bolster a failing company but this isn't always the only reason behind it as amalgamation may also factor in. Read our views on consolidation and see what you think!


Internet tip!
There is an interesting article from business news site Chron about organizational consolidation here: http://ow.ly/p36W30dJ1iv

Why consolidate?

Consolidation may be a result of belt-tightening, of trying to navigate difficult economic landscapes, or it may spring from a wish to concentrate on a company's core issues, to tighten a company's focus, perhaps to regain market dominance in one area. To such diverse ends, there are many ways in which a company may decide to consolidate, not all of them reductive (some may in fact actually be expansive) for example:

  • divestiture of divisions or subsidiaries that do not help to focus on core areas
  • divestment of any assets that do not contribute to the principal business
  • planned redundancies of staff whose positions do not support key areas or can be eliminated by natural attrition
  • temporary shut-downs of factories that are unable to meet primary manufacturing plans
  • acquisition of firms engaged in similar business (possibly competitors)
  • purchase of brands or licenses to enable a company to broaden its offer to customers while maintaining a position of strength
  • removing barriers to foreign markets.

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