Experiential learning at Babson College

Abstract

that the client sell its own appliance business. The client’s core manufacturing and service business was solid, producing high returns year after year. Its appliance business, on the other hand, was an under-earning asset with a low return on capital, with an undifferentiated product line in a cyclical, commoditized market. It pro-duced anemic returns in good years and broke even or lost money in others. For our client, consumer appliances were essentially a distraction. And so we recommended that they exit that business, and not pursue growth through acquisition.