Case breakdown: Movie The Man with the Golden Gun:
The scene that you just saw is from a Bond movie called ‘The man with the Golden Gun”. If you watch this scene carefully, you will understand that when Bond is confronted by a weak opponent, he’s feeling smug. As soon as he faces an opponent who is much more skilled at Karate than he is. Bond starts planning his exit strategy.
In the video at time 01:10, you can literally see Bond grabbing his opponent’s neck but planning his exit strategy while looking out a window. Though one cannot see the window in the movie frame yet. In another 15 seconds, he jumps out the window.
This blog, Learning Perspectives will explore the meaning of exit strategy in business.
What is an Exit Strategy?
An exit strategy could also be called an emergency plan. This could be implemented by an investor, trader, venture capitalist, or owner of a business. Similar to this is an exit strategy that Bond uses to escape the fight. When businesses do not perform or are not able to sustain themselves in the market, they need to think of an exit strategy. Angel Investors also sometimes take the route of exiting the company through an IPO.
Sometimes market forces businesses to look for an exit strategy such as COVID. Many businesses had to think on their feet or innovate or find an exit strategy during the COVID times. For example, Many dating sites had to shut down their services during this time as they were not earning any revenue during the lockdown situation.
Some business strategies include initial public offerings (IPOs), acquisitions, buy-outs, or declaring bankruptcy as well. Business owner forms a strategy and sometimes it can be as simple as looking for a window (similar to James Bond) of opportunity. While other times it may be a challenging situation. An entrepreneur can limit his losses if he/she chooses to exit the business.
Many business owners carve out a detailed exit strategy. These owners are aware of their cash flows and have a forecast to know what will happen when the cash flow falls below a certain limit. What steps would they take, when no more capital infusion is possible?