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Sara Lee Strategy

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| Analysis of Sara Lee Corp. | Retrenchment Strategy Review | | [Type the author name] | [Pick the date] |

Introduction

Sara Lee Corporation, then known as C.D. Kenny Company, was established in 1939 and had net sales of $24 million. By 1998-1999 the company had acquired over forty related and non-related businesses and had peaked at revenues of $20 billion. During the late 1990’s Sara Lee managers began to experience a difficult time in managing the company and increasing profits. This was due to the highly diversified and globally scattered operations that Sara Lee Corp. had developed into. (Gamble & Thomson, 2010) Over the next decade Sarah Lee would begin to transform the company into a streamlined, less globally and industrial diverse company; with a focus and commitment on superior products and customer service. The transformation would include divesting of businesses that contributed to approx. 37% of annual revenue and a spin-off of branded apparel into a new business, Hanesbrand, with the expectation that the retrenchment initiatives would generate $3 billion in net after-tax proceeds.
With the introduction of a new CEO in 2000, Steven McMillan launched a new strategic initiative to narrow Sara Lee’s focus by divesting of unrelated business assets and companies that were not key to the organizations focused industries. In 2005 Brenda Barnes was appointed as President and CEO of Sara Lee Corp and with her appointment the announcement that Sara Lee Corp. would be transformed into an even more strategically focused and streamlined business due to a retrenchment initiative that had been developed. The first part of the transformation included a retrenchment initiative that required the divesture of weak-performing business units and product categories that equated to $7.2 billion in sales; cutting annual revenues from $19.6 billion...

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