Sara Lee Case Study

[Date of Submission]

Introduction

Thesis Statement: The lacking in the strategic management are clear from the Sara Lee's performance.

Purpose

The restructuring plan and the divestures of Sara Lee will be considered in this paper. There has been enormous amount of losses bared by the company's investors as of the company's poor strategic management decisions. Although, there have been billions of dollars accumulated through the divestures of the company but still it has not helped to improve the company's performance at all.

Overview

The analysts that have analysed Sara Lee's performance have clearly speculated that the company is one of the poorly managed companies all around the world. Over the past few years the company has been involved in a number of divestures and acquisitions but this has not helped in any way to improve the company's performance. These types of perspectives as for the company have not helped to improve the worsening market value of the company.

Question # 1

Sara lee is a company with one of the most worst financial and strategic records in the global corporate scenario. It has been since the late 19th century that the company has been struggling to handle its continuously declining performance but has not been able to do so. The shareholders of the company have been continuously receiving poor news from the end of the company as of its declining performance.

Therefore, it has become impossible for any of Sara Lee's shareholders to even think about a successful restructuring of the company. Apparently the stock price of the company has been on a continuous decline, even the restructuring and divestures have not allowed then increase in the performance of the company and therefore, the company's stock price continuously decreases as much as the company participates in any of the divestures.

This in turn greatly affects the amount of dividend that is allocated to be given to the shareholders of the company each time. It is also clear that the company is facing some high level of inefficient strategic management problems. Except for this the company has also laid off millions of employees in order to reduce the cost of operations and in order to maximize its share value, even this has not resulted into the expected results from the company, it is so because of the company's ineffective marketing strategies and decisions. Even through the restructuring Sara Lee has continued to face extensive competition (Gilson, 2010).

Question # 2

A positive aspect of Sara Lee could be the Hanes Spin Off which took place as of the massive restructuring at the company. As a result of which the market value of the Hanes shares increased and the shareholders of Sara Lee, were offered to switch their shares by trading an equivalent value of Hanes shares in return for Sara Lee's shares, this was a positive approach as keeping the better performance of Hanes shares as of the spin off. Despite the offer, Hanes market value cannot match up to the below face value of the Sara Lee's shares (Reed, ...