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Divestments were also crucial to Walgreens’ turnaround dur-
ing the 1970s recession in the United States. During the 1960s
and early 1970s, Walgreens had acquired and launched three
restaurant chains, a department store chain, and a chain of opti-
cal shops. None of these acquisitions fitted within Walgreens’
core drugstore business. In 1977, the new CEO, Charles R.
Walgreen III, made the decision to divest all the company’s
noncore divisions. Over the course of 11 years, Walgreens
divested seven substantial divisions. The divestment helped to
free limited resources, allowing the company to strengthen its
drug retailing business and return to profitability.
During the same period, Kimberly-Clark used the capital
raised from the divestment of its underperforming coated-
paper business to invest in R&D for its consumer products.
This investment resulted in the development of its successful
Huggies diaper brand and provided the necessary capital to
aggressively advertise and market this new brand.
Throughout much of Japan’s Lost Decade, Takeda, the mar-
ket-leading pharmaceutical company, maintained its highly
diversified conglomerate structure—a strategy typical of many
Japanese companies. While pharmaceuticals were its core busi-
ness, Takeda maintained joint ventures in veterinary drugs, vita-
mins, food products, agricultural products, chemicals, and resins.
With its relentless focus on reducing costs, Takeda managed
to improve its position relative to its competitors. But in 2002,
Takeda’s leadership decided to take more drastic action. CEO
Kunio Takeda, recognizing that Takeda’s pharmaceutical busi-
ness accounted for 80 percent of revenues and achieved the
highest profits, decided to divest its other businesses. This was
no easy move because the company controlled between 34 and
49 percent of each of the joint ventures across its six product cat-

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