Sara Lee Case study
1. What is Sara Lee’s corporate strategy? How has its retrenchment strategy changed the nature of its business lineup?
Sara lee’s corporate strategy was implementing acquisition strategies. The retrenchment strategy changed the nature of its business lineup from a small wholesale distributor to acquiring retail food business. The business also acquired related and unrelated business. Sara lee corporations was able to transform it into a more tightly focused food, beverage and household products company. Sara Lee is returning to its roots of food service where name recognition is the strongest.
Sara Lee’s corporate strategy was to transform the company into a more tightly focused company by focusing on their food, beverage, and household products. In order to accomplish this, Sara Lee planned to divest their weak performing business units and product categories which accounted for $7.2 billion in sales. Although the divestitures would decrease Sara Lee’s revenues from $19.3 billion to $12.3 billion, they believed it would be better to concentrate on its financial and managerial resources on a smaller number of business segments. These smaller number business segments had prospective markets and were well positioned. After the completion of the retrenchment strategy Sara Lee focused solely on increasing the sales, market shares, and profitability of its remaining businesses. In order to complete this, they implemented three competitive capabilities in all of its remaining businesses. The first strategy included competitive pricing, innovative new products, and brand building capabilities. The second was category management and leverage through size and operating excellence...
2. What is your overall evaluation of Sara Lee’s retrenchment plan? What evidence and/or reasons support a conclusion that Sara Lee’s shareholders have or have not benefitted from the company’s retrenchment strategy?
I do not think their retrenchment plan has worked out very well. By
Sara lee’s corporate strategy was implementing acquisition strategies. The retrenchment strategy changed the nature of its business lineup from a small wholesale distributor to acquiring retail food business. The business also acquired related and unrelated business. Sara lee corporations was able to transform it into a more tightly focused food, beverage and household products company. Sara Lee is returning to its roots of food service where name recognition is the strongest.
Sara Lee’s corporate strategy was to transform the company into a more tightly focused company by focusing on their food, beverage, and household products. In order to accomplish this, Sara Lee planned to divest their weak performing business units and product categories which accounted for $7.2 billion in sales. Although the divestitures would decrease Sara Lee’s revenues from $19.3 billion to $12.3 billion, they believed it would be better to concentrate on its financial and managerial resources on a smaller number of business segments. These smaller number business segments had prospective markets and were well positioned. After the completion of the retrenchment strategy Sara Lee focused solely on increasing the sales, market shares, and profitability of its remaining businesses. In order to complete this, they implemented three competitive capabilities in all of its remaining businesses. The first strategy included competitive pricing, innovative new products, and brand building capabilities. The second was category management and leverage through size and operating excellence...
2. What is your overall evaluation of Sara Lee’s retrenchment plan? What evidence and/or reasons support a conclusion that Sara Lee’s shareholders have or have not benefitted from the company’s retrenchment strategy?
I do not think their retrenchment plan has worked out very well. By