Enterprise cost reduction as part of a divestitureSeizing the opportunity to re-evaluate the organisation |
The divestiture or spin-off of a peripheral business often provides companies with an ideal opportunity to re-evaluate existing cost structures and enhance shareholder value. In particular, examining costs associated with the selling, general and administrative (SG&A) function, as well as the shared service (SS) function, is key to Enterprise Cost Reduction (ERC), as such costs may rise as a percentage of revenues while the company itself shrinks in size.
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ECR as part of a divestiture
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