McGrath: Market Exit Strategies

We have just finished looking at Chapter 2 of Rita Gunther McGrath’s “The End of Competitive Advantage” where she describes the characteristics of the “agile firm”. These are firms that can best exploit rapidly changing markets. Remember that they balance stability in values and relationships with agility in moving resources (human and financial)between opportunities.

In Capter 3, Rita takes a closer look at a key activity that agile firms need to master — how to do a “healthy exit”. She highlights a few key ideas. The first one should be obvious, and yet many firms do not focus on it — how to get early warnings that exit is desirable. The second is to identity who should be making exit decisions (not managers who are invested in staying the course). The third is to identity different exit strategies for different situations.

We will be taking a look at each of the above subsections over the next several days. But first, it is a good idea to remember the list

  • how to get early warnings
  • who pulls the plug
  • how do you pull the plug

I agree with Rita that this is an area that deserves more attention. Mastering exit will be our next goal!


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