Management Case Study on Sara Lee Corp Example | Topics and Well Written Essays - 1000 words

Management on Sara Lee Corp - Case Study Example What is your assessment of the long-term attractiveness of the industries represented by Sara Lee Corp’s business portfolio? Sara Lee Corp is represented in four industries: packaged meat products, retail coffee and tea, bakery products and household and body care products. In two of this industries, packaged meat products and retail coffee and tea, Sara Lee had huge market shares that is could leverage to sustain its profitability and thus retain their attractiveness. In the packaged meat industry Sara Lee held huge market shares in several categories within North America: 30% smoked sausage, 23% hotdogs, 14% lunch meat and 58% breakfast sausage (Thompson & Gamble, 2010). Given the aging of the US population and general mean rise in per capita incomes, we expect the demand for convenience food to remain high. In retail coffee and tea, Sara Lee held huge market shares in the US, a few European countries and Brazil. Furthermore, it also sold the most single-serving coffeemake rs in Europe. With the global retail coffee market expected to grow from $51billion in 2009 to $62 billion in 2013 we can presume the industry will remain very attractive to Sara Lee. The bakery products success was limited to Spain and the US. With Spain’s economy doing poorly and huge costs incurred in the US while to secure shelf space in US supermarkets we find the long-term attractiveness of this industry to be low. In the household and body care industry Sara Lee’s Kiwi harbors the greatest potential to long-term attractiveness given that it was the number one shoe care brand worldwide with a global market share of 30%. We believe that the firm could use the income it obtains from Kiwi to sustain the brand’s competitive advantage. What does a 9-cell industry attractiveness/business strength matrix displaying Sara Lee’s business units look like? What is your assessment of the competitive strength of Sara Lee Corp’s different business units? Sa ra Lee’s North American Retail division, North American Foodservice division and International Beverage divisions all have very high competitive strength largely because they have strong portfolio of market leading brands within industries that have been projected to grow in future. The global retail coffee market is expected to grow from $51-62 billion by 2013, and with ageing populations in US and Europe, we expect the demand for convenience food to also rise. We also see the company innovating in the meat business (e.g. in meat slicing) and offering complimentary products in its coffee business (single-serve coffee machines). Sara Lee could leverage its market share as bargaining power over its suppliers and customers or enter into alliances to strengthen it further. On the other hand, the North American Fresh Bakery division, International Bakery and the International Household and Body Care divisions are not as convincingly as strong as the other three divisions. North A merican Fresh Bakery has well performing brands and strong market share however; we are informed that its revenue arose when the company negotiated for increased shelf space at supermarkets and other selling stores. Assuming that â€Å"negotiating† for more shelf space implies extra costs we would expect less profits accruing to the company in this arrangement. The fact that Sara Lee has to negotiate for extra shelf space to improve its revenues lowers this division’