Firm Value Effects of Global, Regional, and Local Brand Divestments in Core and Non‐Core Businesses

Foreign divestments from Russia: An exploration of the mediating factors

“…Divestment has been analyzed from different perspectives, such as the determinants, motives, and drivers of divestment (Praet, ), how divestment affects firms’ performance and the impacts of divestment on firm value and divestment decision (Depecik, Everdingen, & Bruggen, ; Haynes, Thompson, & Wright, ), however, there is no holistic framework explaining the divestment strategy of a company.…”

"Out with the Old, In with the New?: The Impact of Divestitures on Firm Performance"

“…Markides (1995) finds that the performance of firms improves after divestiture, but only for firms that have a proactive divestiture strategy and engage in sales of resources before others in the industry. Other studies have found that subsequent performance improves when the divested resource has a dissimilar human resource profile (Chang, 1996); when the divestiture allows the firm to refocus on the core by divesting unrelated businesses (Bergh, 1998) or non-core brands (Depecik, van Everdingen, & van Bruggen, 2014), resolves corporate conflict (Ioannou, 2013), or helps refocus after being overdiversified (Dittmar & Shivdasani, 2003;Markides, 1995).…”

Brand deletion: How the decision-making approach affects deletion success

“…Secondly, market globalization facilitated significant cost reductions derived from outsourcing and relocating operations in emerging countries, but it also triggered substantially increased market competition. The reaction of many corporations has been to focus their efforts on fewer but stronger brands with a global presence, divesting from local or regional brands (Depecik et al, 2014; Özsomer et al, 2012). Thirdly, the rising market share of private label brands has further prompted manufacturers to compete with a smaller set of strong brands rather than with a larger set of weak ones, thus deleting underperforming and secondary national brands (Sloot and Verhoef, 2008).…”

“…Shah (2017a) identifies the outcomes which could serve to define a BD as successful and suggests a set of decision and implementation factors which could have an impact on these outcomes. Empirical papers are also scant and tend to focus on the outcomes of BD, either considering consumer evaluations as a performance measure (Mao et al, 2009; Mishra, 2017) or analyzing the impact on the firm's value by looking at stock market reactions after the announcement of a brand disposal (Depecik et al, 2014; Wiles et al, 2012). These studies reveal factors which affect customer and investors reactions to a BD (e.g., type of BD, brand weakness, scope, relatedness to other brands in the portfolio), yet treat BD as an exogenous event.…”

“…More specifically, we delve more deeply into the BD decisionmaking process and analyze main and interactive effects of rational, intuitive and political approaches, which, alone or in combination, affect BD success. Furthermore, unlike prior quantitative research, which gathers experimental data from consumers concerning their reactions to fictitious BDs (Mao et al, 2009; Sloot and Verhoef, 2008; Wiebach and Hildebrandt, 2012) or which relies on secondary data and press reports (Depecik et al, 2014; Wiles et al, 2012), we have gathered information from managers about 155 real cases of recent BDs by companies in a range of different industries. Albeit in retrospect, this method did enable us to ascertain managers’ perceptions about the particular internal and external circumstances of each case of BD in our sample when the decision was made and implemented together with their evaluation of how appropriate each decision proved to be.…”