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Unbundling

Definition

Unbundling is a neologism to describe how the ubiquity of mobile devices, Internet connectivity, consumer web technologies, social media and information access in the 21st century is affecting older institutions by "break[ing] up the packages they once offered, providing particular parts of them at a scale and cost unmatchable by the old order." Unbundling has been called "the great disruptor".

What is 'Unbundling'

Unbundling is a process by which a large company with several different lines of business retains one or more core businesses and sells off the remaining assets, product/service lines, divisions or subsidiaries. Unbundling is done for a variety of reasons, but the goal is always to create a better performing company or companies (except in the case of government-forced unbundling).

Explaining 'Unbundling'

A company’s board of directors, its managers or regulators may call for unbundling. The board of directors may call for it if the company’s stock is performing poorly and/or the company needs to raise capital or wants to distribute cash to shareholders. Management might call for unbundling if it thinks the result would be a new company that would perform better on its own. Regulators may force unbundling when they perceive a company to have become anticompetitive. When the board or managers calls for unbundling, it often improves the company’s stock price; the opposite tends to happen when regulators call for it.


Further Reading


Unbundling the corporation
go.gale.com [PDF]
… will have to go through a similar process of unbundling, shedding unneeded … As interaction costs fall, companies will come under pressure to unbundle their core … Product Customer Infrastructure Innovation Relationship Management Management Economics Early market entry …

Unbundling institutionsUnbundling institutions
www.journals.uchicago.edu [PDF]
… will have to go through a similar process of unbundling, shedding unneeded … As interaction costs fall, companies will come under pressure to unbundle their core … Product Customer Infrastructure Innovation Relationship Management Management Economics Early market entry …

Unbundling the institution‐based view of international business strategyUnbundling the institution‐based view of international business strategy
www.oxfordhandbooks.com [PDF]
… will have to go through a similar process of unbundling, shedding unneeded … As interaction costs fall, companies will come under pressure to unbundle their core … Product Customer Infrastructure Innovation Relationship Management Management Economics Early market entry …

Unbundling, public infrastructure financing and access charge regulation in the German rail sectorUnbundling, public infrastructure financing and access charge regulation in the German rail sector
www.sciencedirect.com [PDF]
… will have to go through a similar process of unbundling, shedding unneeded … As interaction costs fall, companies will come under pressure to unbundle their core … Product Customer Infrastructure Innovation Relationship Management Management Economics Early market entry …

Higher education, unbundling, and the end of the university as we know itHigher education, unbundling, and the end of the university as we know it
www.tandfonline.com [PDF]
… will have to go through a similar process of unbundling, shedding unneeded … As interaction costs fall, companies will come under pressure to unbundle their core … Product Customer Infrastructure Innovation Relationship Management Management Economics Early market entry …

The unbundling of residential mortgage financeThe unbundling of residential mortgage finance
www.jstor.org [PDF]
… will have to go through a similar process of unbundling, shedding unneeded … As interaction costs fall, companies will come under pressure to unbundle their core … Product Customer Infrastructure Innovation Relationship Management Management Economics Early market entry …

Infrastructure financing with unbundled mechanismsInfrastructure financing with unbundled mechanisms
search.proquest.com [PDF]
… will have to go through a similar process of unbundling, shedding unneeded … As interaction costs fall, companies will come under pressure to unbundle their core … Product Customer Infrastructure Innovation Relationship Management Management Economics Early market entry …

Unbundling management accounting innovationsUnbundling management accounting innovations
www.sciencedirect.com [PDF]
… will have to go through a similar process of unbundling, shedding unneeded … As interaction costs fall, companies will come under pressure to unbundle their core … Product Customer Infrastructure Innovation Relationship Management Management Economics Early market entry …

The evolution and future of the BRICS: Unbundling politics from economicsThe evolution and future of the BRICS: Unbundling politics from economics
www.sciencedirect.com [PDF]
… will have to go through a similar process of unbundling, shedding unneeded … As interaction costs fall, companies will come under pressure to unbundle their core … Product Customer Infrastructure Innovation Relationship Management Management Economics Early market entry …



Q&A About Unbundling


How does calling for unbundling affect stock prices?

It often improves them. The opposite tends to happen when regulators call for it.

What are vertically integrated businesses?

Vertically integrated businesses are those that own all parts of a business, from production to retailing.

What is ownership unbundling?

Ownership unbundling is the process by which a company is divested of some of its assets via legislation. This is often done to break up monopolies.

Why might management call for unbundling?

Management may call for it if they think the result would be a new company that would perform better on its own.

What does ownership unbundling aim to do?

Ownership unbundling aims to achieve more competitive markets. The First Railway Directive and Third Energy Package in the EU both have this as their aims.

What does it mean when the board calls for unbundling?

The board of directors may call for it if the companys stock is performing poorly and/or the company needs to raise capital or wants to distribute cash to shareholders.

What is unbundling?

Unbundling is a process by which a large company with several different lines of business retains one or more core businesses and sells off the remaining assets, product-service lines, divisions or subsidiaries.

When might regulators force unbundling?

Regulators may force unbundling when they perceive a company to have become anticompetitive.

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