TCH realises the importance of having a built-in exit strategy for the company’s Tropical Health Drink. This is because of the fact that uncertain business environments may either hinder future commercialisation of the product or make it gain immense market share to a point of wanting to sell the product line to more established businesses (Clarke n.d.).
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An explicit exit strategy is also important not only to plan for the future but also to enhance the confidence of potential funders. TCH adopts two exit strategies to cater for the two probable eventualities described above. If the Tropical Health product line starts to make losses due to prevailing market conditions, TCH will consider a friendly buy-out with the view to transferring more ownership to shareholders and employees to keep the product afloat during the turbulent times (Clarke n.d.).
This is a viable exit strategy as TCH will cease substantial ownership of Tropical Health while pumping in more resources from shareholders to maintain the product in the market. TCH will consider selling the product to an established health drinks manufacturer for a fortune if it continues being competitive in the market for a period of 20 years (Yeanoplos 2001).
Clarke, A. n.d., Exit strategies for small business owners. Web.
Yeanoplos, K. R. 2001, ‘Exit strategy critical for entrepreneurs’, Las Vegas Business Press, vol. 18 no. 35, pp. 9-10.