Covidien (NYSE: COV), a leading global provider of healthcare products, today announced definitive agreements to sell its
Question:
Covidien (NYSE: COV), a leading global provider of healthcare products, today announced definitive agreements to sell its Sleep Diagnostics and Oxygen Therapy product lines and a proposal to sell its Sleep Therapy product line.
The decision to divest these three product lines was made following a thorough review and evaluation of a number of strategic alternatives. The decision is consistent with Covidien’s strategy to streamline its portfolio and reallocate resources to its faster growing, higher-margin businesses, where the company has or can develop a global competitive advantage.
Covidien and Embla have entered into a definitive agreement under which Embla will acquire Covidien’s Sleep Diagnostics products, including design/development, sales administration, technical service and shipping facilities in Ottawa, Canada, as well as global sales and service functions. This includes several products sold under the Sandman™ brand.
Financial terms of the transaction were not disclosed.
Questions
1 How did management accounting help with strategic decisions in this case?
2 How is a consideration of competition evident in the strategic decisions taken?
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