Sara Lee

Sara Lee's corporate strategy? How has its retrenchment strategy changed the nature of its business lineup?

Sare Lee has been changing its overall strategy with passage of time. Initially when the company was formed, it acquired different business categories in order to expand globally and enter into different markets. The corporation first laid its foundation working as wholesale distributor of different products like tea, coffee and sugar. This business later gave fruits as a result company planned to further diversity its products investing in different business categories for instances acquisition of food processing and packaging was this created different ways for company and it all ended up as the company invested in retail food business. Moreover successes at different stages and markets lead to company to further acquire different business which were somewhat related and unrelated to their main portfolio. Hence further diversifying in terms of products and geography expansion of the company resulted in creating problems for mangers as they were unable to cope up with diversification issue so as a result retrenching strategy was put into practice by the company to make sure that every business division is profitable an close business divisions that are not highly lucrative.

This transformation of strategy has been done keeping the view that more focus will be given to front line business as those business have been giving good rewards and have been more profitable. Moreover, these business; food, beverages and household have good potential in terms of growth. Furthermore company is keen on saving money and for doing that they have introduced project Accelerate which includes cost saving technique as management believes that focusing on these promising business would save them money as they already well positioned in the market and would increase the overall return on investment.

1. What is your assessment of the long-term attractiveness of the...