Businessman Nathan Cummings bought the C. D. Kenny Co. , a Baltimore coffee, tea, and sugar wholesaler, in 1939. Cummings soon purchased several grocery firms and later changed the company’s name to Consolidated Grocers-1945. The operation went public in 1946 and was renamed Consolidated Foods Corporation in 1954.
Two years later CFC bought the Kitchens of Sara Lee, a Chicago bakery founded by Charles Lubin 1951. Introduced in 1949 and named after Lubin’s daughter, Sara Lee cheesecake had become his most popular product. Soon after, CFC began building its international markets with its first European acquisition in 1962. Subsequent to that purchase, it expanded its global presence with the purchases of Dou we Egbert’s (coffee, tea, and tobacco; the Netherlands; 1978), Nicholas Kiwi (shoe care and pharmaceuticals, Australia, 1984), and Dim (hosiery and underwear, France, 1989).
Using one of its most respected brand names to enhance the public’s awareness of the company, CFC changed its name to Sara Lee in 1985. 1 While cheesecake might have brought the company fame, it’s the underwear and hot dogs that bring in more than half of Sara Lee’s sales.
The company operates five separate business units in the U. S. and abroad, these include: Sara Lee Foods — a major U. S. packaged-meat processor with brands such as Ball Park and Jimmy Dean, Sara Lee Bakery Group — the number two bakery company in the U. S.
(behind Interstate Bakeries) and responsible for fresh bread as well as frozen cheesecakes, The Branded Apparel group-which tops in U. S. intimate apparel and hosiery (Hanes L’eggs, Playtex, and Wonderbra), its Coffee & Tea Worldwide group-that creates beverage sales worldwide, while the Household & Body Care group sells End ust furniture cleaner, Kiwi shoe polish, and body care products in non-U. S.
1. What is Sara Lee’s corporate strategy? How has its retrenchment strategy changed the nature of its business lineup? Sara Lee corporate strategy was to implement acquisition strategies which would enlarge their geographical coverage in order to expand into new business classes. When the company started it was a small wholesale distributor of several items: coffee, tea and sugar and over time ...
markets. Chicago-based Sara Lee Corporation is a global manufacturer and marketer of high-quality, brand-name products for consumers throughout the world. They have three lines of businesses: Food and Beverage, Branded Apparel, and Household Products. Sara Lee has operations in 58 countries, with products in nearly 200 nations and has 150, 400 employees worldwide. Some may wonder how one company, with thousands of employees in numerous locations, makes sure everyone is basing his or her decisions on the corporation’s values. These are questions Sara Lee executives and employees debated in the process of creating a program called Global Business Practices.
Introduced in 1997, the program seeks to communicate and reinforce the company’s basic values. The Global Business Practices program emphasizes not only compliance with laws, but also values. The program gives employees a framework within which to make decisions. Sara Lee’s Global Business Practices is summarized in a document called Global Business Standards written in plain language.
This document is distributed to every employee, and has been translated into more than 11 languages. Sara Lee has a global infrastructure of over 100 Business Practices Officers overseeing the ethics and compliance program in each of the operating divisions and units. They are responsible for making sure every employee receives regular training, a key component of the program. Employees learn from actual case studies about questionable behavior and use the business practices program to agree on a proper course of action.
Also, there are more than 50 Business Practices Committees that meet regularly to assess their organization’s efforts and review and investigate inquiries, complaints and any allegations of wrongdoing. Sara Lee’s commitment to conducting business with integrity does not end with employees. The Global Standards for Suppliers define Sara Lee’s minimum requirements of its suppliers. Sara Lee believes in doing business with those suppliers who embrace and demonstrate high standards of ethical business behavior. Sara Lee expects all suppliers to comply with the law, do the right thing, and communicate concerns about inappropriate business practices promptly to the company. Living up to theses responsibilities is what Sara Lee feels will create continued success for Sara Lee and its valued business partners.
1. What is Sara Lee’s corporate strategy? How has its retrenchment strategy changed the nature of its business lineup? The original corporate strategy was acquiring businesses and adding to the corporate bottom line. The corporate strategy changed from acquiring businesses to divesting from non-core lower producing businesses and creating a more focused company along its product lines of food, ...
An example of how Sara Lee has effectively implemented this strategy is their launch of one of the first cross-border comprehensive e-Procurement Initiatives in Europe in May, 2001. This is when Sara Lee officially selected ICG Commerce, a leading procurement service provider, to help the company drive cost reduction and improve productivity. ICG Commerce was used to help each Sara Lee Division purchase indirect goods and services better. As a part of the agreement, ICG Commerce was used by Sara Lee’s divisions to electronically pool and purchase with other companies across Europe and together, taps common suppliers across multiple countries to secure optimal pricing on indirect and direct goods and services.
This initially took place in: the U. K. , Netherlands, Belgium, France, Germany and Spain. “Sara Lee is one of the first to deploy such a pan-European exchange and secure cumulative pricing.
We view this as a significant step for Sara Lee and the European e-commerce market,” said Frank van den Heuvel, Purchasing and Outsourcing Director for Sara Lee Europe. This action allowed Sara Lee European division rapid access to better priced indirect goods to drive immediate, maximum savings, while maintaining supplier relationships in other countries. It also allowed freedom for the divisions to focus on more strategic purchasing and activities by allowing ICG Commerce to manage all their indirect purchasing. This business move was critical to Sara Lee’s continued success and essential to achieving a significant amount of savings. 4 Several acquisitions and investments were also made that strengthened Sara Lee’s global position in its Food and Beverage, and Intimates and Underwear segments. These include: Uniao’s coffee business, which is the largest coffee company in Brazil; Sol y Oro, the number one branded intimate apparel and men’s underwear company in Argentina.
... 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 ... very competitive with the other active wear brands. 8. What actions do you recommend that Sara Lee management take to improve the company’s ...
This packaged apparel business, combined with Uniao coffee, provided an important platform for further expansion in Latin America. These moves helped build leadership brands in markets around the world and underscored its focus on products and businesses that are: global, have leading brand positions, reach consumers through multiple distribution channels, benefit from innovative product development efforts, and can achieve “breakthrough economics,” which is not easily matched by the competition. 5″This reshaping will increase Sara Lee’s opportunities to leverage our global presence, marketing expertise, manufacturing scale and proprietary production processes to yield significant competitive advantages, high returns and superior growth,” said C. Steve McMillan, president and chief operating officer. 5 Though the company has experienced success in the past, they are currently struggling to keep up. Because of their decentralized approach to management, Sara Lee continues to play catch up in a retail world dominated by powerful giants, such as Wal-Mart.
However, there have been attempts to bring Sara Lee up to speed, yet analysts continue to question whether the company would be better off broken up into more focused businesses rather than trying to compete as a conglomerate. In this struggle to rise back to the top, the Sara Lee Corporation has to assess there focus problems. One problem is that Sara Lee has few big brands, which is considered to be detrimental in consolidating in the retail world. The company’s one billion-dollar name is its Hanes lines of underwear and socks. In their food and beverages, which account for over half of Sara Lee’s sales, it has none. Unlike Kraft Foods, which has seven billion-dollar food brands, ranging from its Kraft packaged foods and Nabisco snacks to Oscar Mayer meats.
6 Analysts believe that larger brands give manufactures more clout with retailers and better cost advantages in production and marketing. Since only half of Sara Lee’s revenues are made up of brands with high growth opportunities, this reflects the lack of focus in the past. Morgan Stanley’s analyst David Adelman blames Sara Lee’s decentralized structure, for this problem. Although COO McMillan has worked to change this, by centralizing 10 separate meat companies into one, they still have remnants of these decentralized firms. This is why the corporation is currently depending on their newest addition to the firm, Brenda Barnes.
Issue How to increase sales of the company! |s line of men! |s toiletries. Discussion Gary Mayer, president of MEM Company Inc. and other MEM executives believed that periodic new product introduction s were essential in the men! |s toiletries market to maintain consumer and trade interest and to sustain sales growth. It had been over two years since Racquet Club had been introduced in 1978. A new ...
Sara Lee is banking on Barnes to bring her operational and branding skills to her new position. Barnes’ resume is filled with successes at well-known consumer product companies, which include Pepsi-Cola North American division. Although Barnes will be starting from behind when she takes over Sara Lee’s day-to-day operations and segmentation strategy, the corporation remains optimistic in her attempt to get Sara Lee cooking. 6 Sara Lee’s mission is to feed, clothe and care for consumers and their families the world over.
Keeping this in perspective is what Sara Lee will need to remain focused, and reclaim their throne as one of the most successful retailers in the industry. Though this accomplishment may not come easy, with hard work and strategic planning, Sara Lee has the ability to become number one in its class.