In an attempt to stop declining profitability, Chimos Inc., a chemical company, removed petrochemical products from its production and concentrated on specialty chemicals, a less capital-intensive, less cyclical business. What type of a grand strategy was Chimos Inc. using?
A)Retrenchment
B)Stability
C)Growth
D)Maturity
E)Acquisition

Question

Quizplus · Accepted Answer

Chimos Inc. is using a retrenchment strategy, which involves cutting back or completely removing certain products, services, or markets from their operations to improve profitability. In this case, they removed petrochemical products and focused on specialty chemicals, which is less capital-intensive and less cyclical. This indicates a strategic shift towards a narrower focus and a more streamlined business model in order to regain profitability.

In an Attempt to Stop Declining Profitability, Chimos Inc