Sara Lee’s Postretrenchment Strategy

After the completion of Sara Lee Corporation’s disposition of nonstrategic business in September of 2006, Sara Lee’s upper management decided to divert its attention and resources in increasing sales, market share and profitability of its remaining businesses.

The company’s two main financial goals were to boost top line sales by 2-4 percent annually in order for them to reach their goal of $14 billion and also achieve a 12% operating profit margin. As a result Sara Lee’s developed three main strategies and they are as follows:

1. Competitive pricing 2. Innovative new products and 3. Brand building capabilities. In addition to the three strategies mentioned, Sara Lee deemed it necessary to win new accounts with supermarket and discount store customers.

Interestingly, while Sara Lee was making progress in focusing on consumer needs and category management, its efforts to improve operating efficiency and increase operating margins were showing little progress.

Overall, Sara Lee’s top management believed that the company’s restructured business lineup and corporate strategy initiatives -would deliver strong increases in shareholder value in two years.

The company intended for most of its growth to come from the further development and growth of its premium brands such as L’OR Espresso and Senseo as well as its market -leading brands like Ball Park, Hillshire farms, Jimmy Dean, and Sara Lee.