Case Study: Sara Lee
1. What is Sara Lee’s corporate strategy? How has its retrenchment strategy changed the nature of its business lineup? - new CEO wanted to transform Sara Lee into a more profitable company - a part of new strategy is the elimination of eight branded apparel business because of poor economic performance and decreasing sales this leads to concentration of its financial and managerial resources into smaller and better positioned business segments. goal: reaching of economies of scale by what it was internally known as Project Accelerate, a cost saving plan all across the company and productivity initiative focused on outsourcing, increase the supply chain efficiency and reduce overhead costs - After completion of its retrenchment strategy the company focused on increasing sales, market share and profitability of its key remaining brands -The organizational structure post-divestures became a six division organization built around product similarities, customer types, and geographic regions. - The core of the strategy: Original corporate strategy headed for the acquisition of new businesses and adding them to the portfolio Change to non-core lower producing businesses, like mentioned before, and create a more focused company regarding their consumer goods lines like food, beverages and household products The new strategy would lead us to the conclusion that Sara Lee is following now a Best-Cost Provider Hybrid Approach: 1. The differentiate their products and 2. Focus also on lower prices than rivals
- In addition the nature of their business line-up changed by concentrating now on a few product lines, specifically foods and beverages.
2. What is your assessment of the competitive strength of Sara Lee Corp.’s different business units? - To sum it up: The Project “Accelerate” is not fully represented by numbers in the financial report - the results that were reached by the end of the fiscal year 2010 are unclear it does...
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