Should Sara Lee continue to pursue the strategy of divesting their portfolio of subsidiary businesses to pursue a more focused strategy?
Sara Lee has taken on a retrenchment strategy by divesting many business segments to focus on a branded food portfolio and the most profitable divisions. I believed that Sara Lee should continue to pursue the strategy of divesting their portfolio of subsidiary business as the household and body care business segment is not profitable to the business. This I believe and I also agreed with the executives that the retrenchment would allow revenue to growth while they focus on the most powerful brands that would increase shares in the company. My recommendation is for Sara Lee to seek diversifying into new beverages and snacks business. To increase Sara Lee's competitive advantage, a concentric diversification for these types of products would expand their branded product portfolio and market share. I believe this would be a good strategic fit based on the current branded portfolio of Sara Lee. Sara Lee would be more attractive and known for their global brands.
Is this the appropriate long term strategy for the firm?
Yes, I believed the above strategy will be an appropriate long term one for the firm. Because the household and body care business is not favorable to the firm and the food service industry is a considerable growth opportunity. I recommend that Sara Lee pursue a more focused strategies such as acquisition of an existing business, a joint venture, and concentric diversification of related businesses.
Acquiring an existing business will expand their current brand portfolio and market share. It will also increase Sara Lee's market share, sales, competitive advantage, and profitability. Acquisitions will allow Sara Lee to be a diversified company with various brands that are well-known to consumers.