Sara Lee Corporation in 2011: Offers Its Retrenchment Strategy Succeeded?
Executive Brief summary
Sara Lee Corporation started in 1939 and, as of 2001, acquired acquired much more than forty companies. Sales reached $10 billion in 1988, $15 billion in 1994, and $20 billion in 1998. However , revenues peaked in 1998, since Sara Shelter struggled to handle the company's broadly diversified and geographically scattered operations. In February 2006, Brenda Barnes, Sara Lee's newly designated president and CEO, has announced a strategic want to transform Sara Lee right into a more snugly focused foodstuff, beverage, and household products company. The centerpiece of Barnes's change plan was the divestiture of weak-performing business units and merchandise categories accounting for $8. 2 billion dollars in revenue - 40% of Sara Lee's twelve-monthly revenue. Barnes believed that Sara Lee could benefit from concentrating the financial and managerial assets on a smaller sized number of business segments in which market prospects were appealing and Sara Lee's brands were well positioned. Since the initially phase of Barnes's modification plan, Sara Lee was to exit 8-10 businesses: Direct selling, U. S. retail coffee, Western european apparel, European nuts and snacks, Euro rice, U. S. meat snacks, Western european meats, and Sara Lee branded clothes. The latter was spun off as persistent company, Hanesbrands Inc. Following the disposition of those nonstrategic businesses in 2006, Sara Lee aimed at increasing the sales, industry shares, and profitability of its remaining businesses including North American Price tag, North American Refreshing Bakery, North American Foodservice, Foreign Beverage, Foreign Bakery, and International Household & Body-care. Sara Lee's management approximated that by focusing even more on the more powerful brands with good development potential, its revenues would grow to $14 billion in financial 2010 and that the company's operating income margin would enhance to by...