Sara Lee: Case Study

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Sara Lee: Case Study Vernon McCoy MBA 671 Sara Lee’s overall strategy has changed throughout time. When the company was initially formed, they acquired different business categories in order to expand globally and enter into different markets. The foundation was laid as a wholesale distributer of different products like tea, coffee and sugar. This later opened the door to fruits and the food packaging industry. Success in these categories allowed Sara Lee to invest and acquire other non-related and related organization to further diversify their portfolio. Because of the diversifying, in terms of products and geography expansion, the company created creating problems for mangers as they were unable to deal with the diversification issue. As a result, a retrenching strategy was put into practice by the company to ensure that every business division was profitable and would close business divisions that were not highly lucrative. After retrenchment, Sara Lee was able to focus on its food and beverage and foodservice industry. The company has successfully used its retail meat unit by selling similar meats to its foodservice customers. The retail meat has seen increases in sales and operating income. Sara Lee is the market leader in retail breads in the U.S., trailing Kraft within the meat sector. Fresh bread sales jumped more than $600 million within 3 years due to the leverage Sara Lee had with grocery stores to increase shelf space for its product line. The foodservice industry provides Sara Lee the ability to use its meats in restaurants and fast-food restaurants. Sara Lee has a strong market share in this sector. Because the retail and food industry has a lot of potential, the long-term attractiveness is very high. There industries are not luxury items but are necessary components in people’s lives, which is why they have a high propensity for long
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