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…
The Term Paper on Business Intelligence Strategy at Canadian Tire
The Retail group has just sent me another quick win request, stated Michael Eubanks, director of marketing information technology (IT), as he walked into his meeting with Andy Wnek, chief information officer (CIO) of Canadian Tire Corporation (CTC). That’s the second one this week, and I have heard whispers about more. Dealing with these quick wins is going to make it difficult to redevelop the ...
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 looking at their financials it seems as if they aren’t earning more revenues or if so it is barely an improvement than before. Some areas are even recording a loss whereas before Sara Lee was earning a profit. In the case it stated that by enacting this plan they could increases shareholder dividends by .20 cents, but it never actually said if they were able to do this.
I also think it was not smart for Sara Lee to make their spin off company Hanesbrand Inc. pay the $2.4 billion to them as “dividend” payment because that automatically puts them in debt. The case states that they had to borrow $2.6 billion to be able to even start up and pay Sara Lee which in turn made investors wary of why their credit rating wasn’t very competitive with the other active wear brands. 8. What actions do you recommend that Sara Lee management take to improve the company’s performance and boost shareholder value? Your recommended actions must be supported with convincing, analysis-based arguments. I believe Sara Lee should rethink what was sold and maybe bring back the most profitable companies. I think them cutting 3-4 companies would have been plenty because even though Sara
3. What actions do you recommend that Sara Lee management take to improve the company’s performance and boost shareholder value? Your recommended actions must be supported with convincing, analysis-based arguments.
