How should a corporation decide whether to buy, sell, or keep a business unit? In the late 1980s, McKinsey developed its market-activated corporate strategy (MACS) framework, which answered that question in a surprising way. The obvious considerations—the attractiveness of the industry in which the unit competes and its competitiveness within that industry—are both relevant, but the acid test is which company can extract the greatest value from the business. If the present owner should be that company, it probably ought to keep even a mediocre or poorly performing unit.
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