A retrenchment strategy followed by an organization when it feels that the decision made earlier is wrong and needs to be undone before it damages the profitability of the company.

 This strategy includes the downsizing of the scope of the business. The firm is said to have followed this strategy, when it sells or liquidates a portion of a business or one or more of its strategic business units or a major division, with the objective to revive its financial position.

The most unpleasant strategy adopted by the organization that includes selling off its assets and the final closure or winding up of the business operations.