Sara Lee Corp Analysis Essay Example for Free

Sara lee Corp Analysis turn up1. What is Sara downwinds corporate strategy? How has its suppression strategy changed the nature of its crease stage businessup? Sara lee(prenominal) corporate strategy was to implement acquisition strategies which would enlarge their geographical coverage in order to hit the roof into new business classes. When the confederation started it was a small wholesale distributor of several items coffee, tea and scar and over time Sarah lee side acquired fodder processing, packaging, distribution and the retail food business. Over 40 years, the Sarah Lee Company acquired cerebrate and non-related business. Sarah Lee sold 8 businesses that were looked upon as non-strategic. This initiative was expected to generate feature net after tax proceeds in excess of $3B. The leaders of Sarah struggled over time to fill in broadly diversified and geographically operations. So it was decided in order for the company to preserve focusing it would c entralize on the grocery portion and the upcoming trend of the single serve coffee machines. Therefore, Sarah would as healthful as focus on the single serve coffee line business, which they believed would be profitable for the company and copeholders.The curtailment strategy changed the nature of its business lineup from a small wholesale distributor to acquiring retail food business. The retrenchment strategy would allow Sarah Lee to focus even more closely on the food, drinkable, and household products. Management believed in order to save cost and to be more profitable they would concentrate its financial and managerial resources on a smaller number of business segments in which market prospects were smart and by Sara Lees trade names being well known and well positi id would help them to stay in alignment with the strategy. Sarah Lee also executed an outsourcing strategy known as Project Accelerate. Its a company-wide cost saving and productivity project that focused on o utsourcing, supply grasp efficiencies, and overhead reduction.2. What is your estimation of the long-term attractiveness of the industries represented in Sara Lee Corp.s business portfolio? In 2008 100M revenue,with 10-12 core products was put down as establishing an increment in market office in 2010. However, in in the midst of 2008-2010, divisional gross revenue had grown faster than any otherwise food processing company Sarah Lees market share had increased from 9.2% in 2009 to 12.3 in 2010. Keeping in mind, the state of the economy along with the size of the households, it usually cheaper for people to eat their meals at home and bring their lunches to work. By consumers buy lunch centre of attentions and other foods products of the well know brand Sarah Lee products would mostly remain high. Therefore the retail, foodservice, and other related industries represent the most attractive long-term business portfolio growth for the Sarah Lee Corporation.3. What is your a ssessment of the hawkish strength of Sara Lee Corp.s different business units? By Sarah Lee staying focus in the food industry and having little or in some cases no focus on non-fitting industries allowed for value chain match-ups in the form of employment technology, shipping logistics and customers. This direction offers opportunities for skills to be transferred, cost and brand sharing including the production of bakery, retail and foodservice goods because many of these are products are similar or the same products. By having product parity the Sarah Lee Company puke manufacturer a large batch of the same product, costing less than having to set up and run a separate product line. North American Retail market-leading brands30% market share in smoked sausage23% market share in vehement dogs14% market share in lunch meat58% market share in breakfast sausage22% in frozen desserts55% in single-serve coffeeNorth American Fresh BakerySales increased from $91 million in 2003 to $ 2.1 meg in 2009 best-selling(predicate) brand of packaged bread with 8.3% market shareNumber one ranking in resilient dog and hamburger bunsIncreased shelf space= 1.5 feet to 4.0 feetResulted in tripled average weekly salesNorth American FoodserviceEven though recession, caused division years $2.2 billion in sales to $1.9 billion in 2010 Held a 65% market share in liquid coffee and tea52% market share in pies19% market share in cakes20% market share in refrigerated doughInternational Beverage40% market share in atomic number 63 in single-serving coffee machines In 2009, expanded line to include LOR Espresso capsules which were compatible with the second-best-selling brand of single-serve coffeemaker with a 27% market share International BakeryBimbo fresh bread sold in spain accounted for 63% of division sales Bimbo frozen bread sold in Australia accounted for 12% of division sales Bimbo refrigerated bread sold in France accounted for 25% of division sales Bimbo was market leader with 37% market shareInternational Household Body CareKiwi brand was the number one shoe make do brand worldwide with distribution in 200 countries and global market share of 30% Sanax was the number one brand of bath and shower products in Denmark, Spain and France, and Ambi Pur was the best selling line of descent freshener in the Netherlands and Spain. 3rd best-selling air freshener brand in the U.K., Italy, and France.4. What does a 9-cell industry attractiveness/business strength matrix displaying Sara Lees business units look like?5. Does Sara Lees portfolio demo good strategic fit? What value-chain match-ups do you see? What opportunities for skills transfer, cost sharing, or brand sharing do you see? Yes, Sara Lees portfolio does exhibit a good strategic fit for the following reasons intersection line and product relations support one a nonher like bakery, beverage and meat items can be sold together which can save cost, time and increase profits. By Sara Lee retail and w hole selling is an advantage for all the products, all products will most likely be consumed. The hazard of skill transferringenhances cost saving by allowing a bakery worker to work in the beverage and meat sector or vice versa. Brand sharing the products can be handled by mixed techniques, saving time, cost sharing, promotions/ads and generate revenue. 6.What is your assessment of Sara Lees financial and direct performance in fiscal years 2008-2010, the period following the divestitures that were the core of Sara Lees retrenchment strategy? Sara Lee deciding to close 8 business units, (Direct selling, U.S. retail coffee, European apparel, European nuts snacks, European rice, U.S. meat snacks, European meats and Sara Lee branded apparel) after adapting the retrenchment strategy which was not an easy decision. With this incentive the company expected to increase its operating profits margins by 12%, but the company could not fall upon its targets.From 2008-2010 to help with cost savings the project named Project Accelerate was implemented which was estimated to save the company between $350M $400M by 2012, accumulative the project saved the company $180M. 7.What is your overall evaluation of Sara Lees retrenchment plan? What evidence and/or reasons support a conclusion that Sara Lees shareholders have or have not benefitted from the companys retrenchment strategy? The retrenchment plan created a pretend for the leadership teams expectation and it did not create a huge impact for providing surplus revenue for the Sarah Lee Company. Per Sara Lees financials and not due to the retrenchment strategy the company did show growth in some sectors and barely over previous years. The leadership team felt the retrenchment strategy would increase improvement on its return on deckments, increase revenue to $14B by 2010 and operating profit margin in 2010 by 12% against operating profit margin in 2004.Sara Lee did manage to improve its operating margin to only 8.5% where as $10.8B of revenue was generated in the 2010. Sara Lee stakeholders did not really benefit as much as the company hoped they would from the retrenchment strategy. The book value of the usual nervous strain decreased from $3.61 to $2.25 The market value of the common stock decreased from $17.4 to $13.9 Dividends Declared decreased from $0.50 to $0.448.What actions do you recommend that Sara Lee management take to improve the companys performance and boost shareholder value? Your recommended actions must be supported with convincing, analysis-based arguments. Research andendorsing current products (ex. teas and coffee) in new markets such as in the Asian and European markets to help with increasing brand awareness, revenue and profitability. There is a hold in margin on the dessert products. By selling off its dessert brands, Sara Lee can invest the profits of the sale into other innovations business units. Sara Lee International should expand its household and body care br ands into the United States. Its air freshener brands hold significant market share in Europe, which could be utilized in North America.The market for cleaning products and air fresheners is strong in the United States. Sara Lees innovations would be very successful in the growing market across the Atlantic. With Sara Lee having the product lines that are related products can take a declining shift at the same time, therefore an innovative product line needs to be added/ expanded/developed. Sara Lee should utilize some of its cash and perform another stock buyback program. Sara Lees leadership team needs to be analysis to see who should stay and who should go. Once that process is completed then the leadership team needs to manage what is working well and Project Accelerate should stay in place to continue to increase cost savings and increase profits. All of the recommendations are needed in order for the consumer base to continue be to grow at the necessary rate also for the compa ny to continue to grow per goals and to keep the shareholder happy.