“The wheeling and Dealing by Smucker’s”

The J.M Smucker Company  was founded in 1879 when Jerome Monroe Smucker built a steam powered cider mill in Orville, Ohio. Smucker soon realized that his state-of-the-art mill has the ability to produce lot more apple cider than he could sell.

J.M Smucker used a family recipe for apple butter to expand its product line instead of discarding the excess cider. Luckily for Smucker, his apple butter became a hit within the local community, and by 1920 the company began building a complete line of Jams, Jellies, and preserves to capitalize on the success. Smucker’s began to distribute its products nationally in 1942 and it expanded its products line again to include ice cream toppings in 1948.

Paul Smucker also led the company to introduce fruit flavored breakfast syrups, low sugar preserves, and natural peanut butters during the 1970s and began acquiring other food companies to diversify beyond spreads, peanut butter, and condiments in the 1980s.

The company acquire Magic Shell (the maker of an ice cream topping that hardened as soon as it was cooked by the ice cream). In 1982, Knudsen & Sons  ( a leading producer of fruit and vegetable juices)

In 1984 when Paul Smucker retired from active management of the company, his two sons, Tim and Richard Smucker became responsible for the company’s day-to-day operations.

The 2002 acquisition of P&G brands Jif and Crisco transformed J.M Smucker. Jams, Jellies and preserves historically made up more than 50 percent of the company’s sales, following the transformation. approximately 25 percent of Smucker’s revenues came from the sale of fruit spreads, 25 percent from peanut butter sales, 25 percent from the sale of shortening and edible oils and the remaining 25 percent from the sale of natural beverages condiments, ice cream toppings, Snacks and Sandwiches.

In June 2004, Smucker acquired International Multifolds for $840 million which gave Smucker such products as Pillsbury baking mixes and ready to spread frostings.

Since 2002, The J.M Smucker company has been wheeling and dealing by numerous acquisitions. Several of the acquisitions were unsuccessful and as a result J.M Smucker had to change their strategy and divestify.

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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.