Management Decision Making

FORE SCHOOL OF MANAGEMENT |

Sara Lee Corporation in 2011: Has Retrenchment Strategy been successful? |

GE 9 Cell Matrix |

|

Taranjit Singh Bhasin FMG 21C 211150 |

|

|

Industry Attractiveness

No. of competitors:

Sara Lee had a large number of competitors for each of its strategic business units. This can be deduced from the fact that there were a lot of investors and rival companies who readily bought out various divisions of Sara Lee. Sara Lee retained its strategic business units in the food & beverage industry because it faced lesser competition in these divisions and hence they have been assigned a higher rating.

Bargaining power of suppliers / buyers:

Depending on the nature of industry, the various business units in Sara Lee had varying degrees of bargaining power with its suppliers. For example, in the food industry the customers (Super stores) were the owners of scarce shelf space, so players like Sara Lee had less bargaining power then these buyers. Having said that, Sara Lee had relatively more bargaining power with the buyers compared to its competitors.

Economic Conditions:

The economic conditions in a country are a big factor which influences the profitability of a company and the success of its operations. For example, recession in US economy in 2007 changed the preferences of consumers and owing to this all the major players in the market had to fight hard to sustain their market share.

Industry size & growth:

The growth in an industry tells a company how well it is fairing compared to the industry standards. Sara Lee divested many of its units because of low or negative growth rate in the particular industry the SBUs were operating...