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Segment Elimination / ROI

Dear Vineet Swarup,

Please provide answers (solutions) to the following questions.

1. Give an example (company, product lines, segments, etc.... ) of a situation where a Segment should NOT be eliminated solely because the segment's margin is not positive.

2. Let's say you were recently hired into a manager's position that you anticipated would be short term in nature. You also have incentives tied to your segment's ROI. So, you obviously want to increase ROI as quickly as possible. What activities might you undertake or authorize to accomplish this, even though these activities would hurt the company as a whole?

Thank you

Solution Summary

The solution explains why a segment should not be eliminated even if the segment margin is negative and also how ROI can be increased in the short run.