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en m Arthur A. Thompson John E. Gamble The Universty of Alabama University of South Alabama $1O.8b1lonn fiSCAI 2010, ind the company's Corpomtion's...

5. Does Sara Lee's portfolio exhibit good strategic fit? What value chain match-ups do you see? What opportunities for skills transfer, cost sharing, or brand sharing do you see?
Arthur A. Thompson The Universty of Alabama In February 2005, Brenda ßan~ Sara Lee Corpomtion's newly appointed prCiídeßt and CEO, annouiii:d a bold and ambíLíoU5 multí- ")'~u strategic plan to transform Sar.i Lee iiio a more tightly Jocuscd food,ben~r4g and house- hold products comp-.iny. The centerpiec of Barnes's tmllfonnation plaii was the divestíture of weak-performing hUl;lnesuníts and product categones 3coounting for S7.2 bíllon in sales (37 percent of Sam Lee's annu31 :rcvcnues).Whíle ¡he diYC5titurci would cut Sara Le'sreirenuC5 fmm $19.6 hílíon to about $123 bíJJOß, Barnes be1íe¥ed that S3ra Lee\'(ould be pettC"T off con- centmlÍ0E its financial and iwdnagerul resource on a smaJJer number of busÍJJ~ segments in whch market prospt'cs were prommog and Sam Le's brands were well positíoned.! Once i1ie retrendunent ínítiali\'cs wcrccompleted, the plan was to dn\'e the company's gnm1h '¥ia ínítÍltiH."S to boost the sales, markei $mire and profitabil- íty of ahe key rcm.iining bmnds: S3m Le breads and bakery producl$ßall Park me-.ns, Douv.e Egbem colfee Híllslúre Farm mea Jimmy De-.m sausge, and Sens ~jngle-5er¥c coffee products Company exectí~'e$ beIie\"ed that the retrem:hment'trould alliny ren:iiue. to incrC'dsc to $14 bílíon by fisca12OJO and that the company's opemtÍßg profit magiß Í1i 2010 would incfeaee to at leat 12 percu (versus an S.l p¡m::cnl operat- ing profit margin in fiscal 2(04).1 By fi.alYC"Ar-end 2010, ít remmnedunclear to what extent iberetrendiinent smitegy had benefited sliare1iolder~ The company liad mÍ5ed both rewcnue and operating profít margín projec- tions for 20HJ.Rcyenues had iiicrelSed to onl)' n i: en m John E. Gamble University of South Alabama $1O.8bí1líonín fiSCAI 2010, ¡ind the company's opemling profit margi dming the yc-.ir had improved to onb' 8.5 percnt. Dunng 2010, Sarale had engaged ui further retrenC"imenl with the di\"cstiturc of íts International House- hold and Body Care busines whicb produce and marketed Kiwí shoe care products, Sanex persomil care products AmhiPur aíT freshcIJ- ers, and v-.irious insiicides and cleaning prod- ucis sold outside North America. Tbe comp-Any was also well under way with J'rojeci Acclemte, a company-wide cost ~n':ígs and producti~'Íty inítíaiirc launched in 200S that focused on out- sourcing, supply ihain effcíencies and o¥erhe-Ad reduction. Project Acclemie had produce say- ings of S180 milion by 2010 and \V-dS expeed to produce eumulatí.c sm.-jngs of :$350 mi11on 10 $400 miJJon by the end of fiscal 2012. Manaee- ment also laum:berl a smire bu)'back plan in 2010 that would repurchase $25 bilon 10 53 bi11on of share oyer a thre-ye-. .r period. Also during 2010, Brenda Barnes had bee forc to step down as CEO in Augus1 after suffenng a stroke in :M~iy. The company's chief financial offcer, Marcel Smits, had been named inienm CEO \vhile the board searched for a permnent replacement. Smíis's st. .itegics Jor 201 i focus on increasing share in the company's most powerful by.suds pursing growth in attmctí\"e geogrAphic markets and fully eaptunng the anticijYdted benefits of Projec AccelerAte. COPJnt.,2fJ1(b¡ Attll Á. Tip-'Wian.lohii L Gai:Al ri~ reed
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Sara Lee's portfolio exhibit good strategic fit after the restructuring and the match ups between
skill transfer cost sharing and brand sharing is very evident from the corporate strategy...

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