market exit

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market exit

the exit from a MARKET of an established supplier. Market exit constitutes a major BUSINESS STRATEGY decision, reflecting a strategic initiative on the part of a firm to reshape its product/market positioning. Such exit occurs largely in response to a sustained LOSS-making situation or poor PROFIT rate or low perceived growth potential. Successful exit requires the firm to overcome any BARRIERS TO EXIT. See DIVESTMENT.

market exit



the withdrawal from a MARKET of a firm or firms. In the THEORY OF MARKETS, a firm will leave a market if it is unable to earn a NORMAL PROFIT in the long run. Firm exit plays an important role in removing EXCESS CAPACITY and reducing total market supply.

Because of various BARRIERS TO EXIT, however, firms may be slow to leave a market even when faced by persistently adversetrading conditions. See alsoLOSS, AVERAGE COST ( SHORT RUN), CONTRIBUTION.

References in periodicals archive ?
In order to analyse the abovementioned issues, we develop an empirical model of firm market exit based on a neoclassical theory of the firm [40] and contributions of the existing body of literature in this field.
With regard to the problem of market exit, much has already been achieved in the euro area in the context of the banking union.
If not-for-profit agencies place more value on serving the community than profits, they may not engage in selective market exits under HHC.
34 billion, due to the effects of previously announced market exits and a 2.
34 billion, reflecting the impact of previously announced market exits as well as a 2.
While market entry has benefited from the adoption of new legislation, there are still obstacles in market exit.
Practitioners have blamed this on a scarcity of potential Islamic target portfolio companies and a lack of public market exit options, with most capital markets in Islamic banking centers seen as not being deep and liquid enough.
I toyed for a time with combining VIX (the volatility index) with beta to try to determine market exit points, but the trouble with VIX is that it can be a good signal or bad.
Some of the more noticeable effects have been consolidations, mergers, industry shrinkage and market exit.
While considerable public attention was given to the vast number of agency closures that occurred (GAO 1999, OIG 2000), relatively little research has sought to understand why some agencies closed and others did not, or potential associations between agency-level characteristics and the supply-side changes made by surviving agencies that may have potentially allowed some agencies to avoid market exit.
Erker explains their dramatic decrease after 1960 and final market exit in several phases.