Reasons for Retrenchment

• Retrenchment is the cutting back of an organisations scale of operations
• Poor financial performance is a reason for retrenchment
• Difficult economic conditions are a reason for retrenchment
• Strong competition, resulting in declining market share is also a reason for retrenchment
• Diseconomies of scale caused by growth are also a reason for retrenchment
• Diversifying too far, needing to refocus and allow for specialisation again is a reason for retrenchment