Sara Lee Case

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Sara Lee case

Introduction

Sara Lee has positioned itself with strong food products which make the company successful in both the retail and foodservice industry. The company can utilize its strong growing meats in its food service business, saving costs within the company while building strong relationships with other businesses.

Problem Statement

Underperforming product lines, that Sara Lee is working to divest and slow progress of the Project, Accelerate cost reduction strategies that are threatening Sara Lee's ability to meet expected earnings per share by 2012.

Alternatives

Implementing Business process re-engineering

Sara Lee has successfully revamped its business strategy, focusing on innovative products and meeting customer demand. Its lineup of businesses allows it to grow in several markets, though some segments of its businesses may not prove to be as successful. The company has segments in unrelated industries, such as its household line in SLI. The rest of the company has focused on food items, diverting its attention from its strong points. After the company restructured itself, net income, revenue and assets declined significantly. The positive aspects financially of the restructuring was that sales per employee increased by $60,000, while inventory turned over 3 additional times. In order to grow its revenues and profits, Sara Lee will need to focus on its key performing businesses.

Over the years, Sara Lee was broadly known for their catchy slogan of “Everybody doesn't like something, but nobody doesn't like Sara Lee,” which mainly pertained to the companies bakery group; but Sara Lee Corporation was so much more. In 2006, the slogan was changed to “the joy of eating” to go along with a major transformation of the company into a smaller number of core businesses which focused more tightly on food, beverage, and household products. [Thompson, Peteraf, Gamble, and Strickland 2012].

After the divestiture of Sara Lee Corporation's nonstrategic businesses in 2006, management focused their attention on increasing the sales, market shares, and profitability of the remaining businesses. The company's goals were to increase sales to at least 14 billion, and increase profit margin to 12% by 2010.

In 2008, after showing little progress in increased profit margins, Sara Lee launched an initiative called Project Accelerate. Project Accelerate included business process outsourcing, restructuring of operating segments, and reductions in corporate overhead. By creating Project Accelerate, Sara Lee Corporation sought to strengthen the company's ability to achieve a 12 percent profit margin by 2010.

Although Sara Lee Corporation focused on cutting back business operations between 2005 and 2010, the company's has continued to utilize a broad differentiation strategy. Sara Lee does not aim to have the lowest price product or to only sell to a small niche of the market. They aim to differentiate themselves from other brands by showing the value of their brand name and their higher quality products.

International commercial food service markets

The rest of the company has focused on food items, diverting its attention from its strong points. After the company restructured itself, net income, revenue and assets declined significantly. The positive aspects financially ...