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Sara Lee Corporation in 2011

In: Business and Management

Submitted By JamieBriscoe
Words 2034
Pages 9
MEMORANDUM
DATE: 11/12/12

TO: Mrs. Sabine Turnley

FROM: Team 5 (Jamie Briscoe, Bradley Veenendaal, Jessica Kolb, Rebecca Christie, Kody Lynn)

SUBJ: Sara Lee Corporation in 2011: Has Its Retrenchment Strategy Been Successful?

EXECUTIVE SUMMARY:

In 2005, Sara Lee placed a strategic plan in action to transform the business into a more tightly focused food, beverage and household products company. This involved the divestiture of weak-performing business and product categories, which included eight business units. Although the divestiture would decrease Sara Lee’s revenues, it was believed that concentrating their financial and managerial resources on a smaller number of business units would be beneficial. Sara Lee struggled at the beginning of the retrenchment strategy but has been progressing upward in the last couple of years.

ANALYSIS:

Strategy Analysis

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...

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