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Sara Lee’s Corporate Strategy

Decent Essays

Sara Lee’s original corporate strategy prior to retrenchment was to acquire mostly unrelated businesses to increase overall company profits, which proved to be difficult to manage properly with such a broad focus. In 2005 when Sara Lee hired a new CEO they announced a plan to become a more tightly focused food and beverage, and house hold products company. They began by divesting the weakest preforming businesses and product lines also by exiting businesses that they find to be nonstrategic.
Since then Sara Lee has completely changed the way the business operates and looks. They’ve gone from a giant and diverse group of businesses to a tightly focus core group of businesses and product groups.
Sara Lee’s competitive strengths will come from the more focused approach on food products and related businesses as well as significantly reducing their operations in other business units in alternate industries. With a narrower focus of food products Sara Lee can continue to reduce cost and increase margins along the primary and secondary activities of the value chain.
Every industry that Sara Lee elected to keep within their portfolio of products is a top producer with many brands being number one in their category, as well as businesses that have significantly increasing revenues so the long term attractiveness is greater with the remaining businesses.
Sara Lee’s retrenchment strategy has allowed the business to return to its core expertise which is the food industry. This

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