Strategic Analysis of Sara Lee Corp: Retrenchment Strategy Case Study

This case study analyzes Sara Lee Corp's strategic approach, particularly its retrenchment strategy and its impact on the business portfolio and shareholder value. The analysis examines the company's use of mergers and acquisitions as a strategic technique and compares it with other companies such as Louis Vuitton and Microsoft. It explores outsourcing strategies, value chain relationships, and diversification within the Ingersoll Rand group. The study assesses Sara Lee's financial performance and recommends actions to improve company performance and boost shareholder value. The analysis covers industry attractiveness, competitive strength, strategic fit, and potential for skills and brand sharing. It provides a comprehensive overview of Sara Lee's strategic decisions and their consequences.

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Strategic Analysis
Sara Lee Corp Strategic Analysis: Case study
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Strategic Analysis
Question 1
There are several companies that employee mergers and acquisition as a strategic technique
to control their corporation, jus the way Sara Lee Corp has done so far. These companies are
big names in their respective industries and have made sure that they can control major
portions of the industry in a way which gives them complete leverage. While not always can
they come up with winning products or strategies, hence, the acquisition is a way in which
they can have complete control (McKiney , 2017).
Following are the companies which employee acquisition as a strategic management
technique:
 Louis Vuitton: the fashion brand is known to be one of the strong players of the
luxury market segment. Loui Vuitton has ensured that it can control the market share
as much as possible. For this, it acquired Moët Hennessey, Dior, Sephora, Fendi
which are some of the important players of the high fashion luxury market.
 Microsoft: Microsoft has also ensured that it keeps up with the game in the IT and
computer industry by acquiring its competitors. For example, Microsoft acquired
companies such as Yahoo, LinkedIn, Nokia etc. to simply stay ahead of Google, its
major competitor in the tech world (Microsoft, 2016)
Question 2
Outsourcing is the act in which a company previously used to produce a good or service,
hires these products or services from a third party or an external company due to either
discontinuation of the product or other reasons. These companies hire services to enhance the
quality of their finished goods or save on cost (Lopez, 2017).
For example, Ford Motor Company. Like all car manufacturers, Ford also outsources certain
equipment for its cars as it does not make everything in the house. They outsource tyres from
JK Tyres, in-car infotainment and GPS Navigation from Samsung.
Another such example can be Microsoft. Microsoft hires companies such as IBM to create its
chips for processing in computers.

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Strategic Analysis
The company has chosen to our source the manufacturing only. The threat of competition is
relatively low to the competitors as they are all pretty established. These companies have
chosen to strategically comply with the processes.
Question 3
To identify the value chain relationships that are present in the brands, we have to assess if
these companies are related in some way or the other.
Technology
Transfer
Combining
Value Chain
activities for
economic
growth
Using Brand
Name for
growth and
product
differentiation
Bloomin
Brands
Bloomin Brand has
so far shown no
signs of technology
transfer
Yes, Bloomin is
known to combine
value chain activities
to increase its
economic growth
While this has been
an option, it has
been seldom used
L’Oréal Yes, L’Oréal has
used its patent
technology of hair
protein to make
new and authentic
products which have
helped the customer
(L'Oréal, 2019)
Yes, L’Oréal is
known to combine
value chain activities
to increase its
economic growth
L’Oréal banks a lot
on its past
reputation
Johnson and
Johnson
J&J is into medical
supplies, hence the
level of tech transfer
and tech
differentiation both
is very high
Yes, J&J is known to
combine value chain
activities to increase
its economic growth
J&J cannot bank on
its reputation owing
to its various
scandals (Arthur,
2019)
Question 4
For Ingersoll Rand group the diversification which can be observed from the listed group of
their products is related. Related diversification refers to the diversification which a company
undertakes when the “different” products they make are somehow related to their core

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Strategic Analysis
manufacturing (Mittal, 2018). For example, we can see that the Ingersoll Rand group, they
have product offerings such as golf cars (zero-emission vehicle), thermo king (transportation
temperature control systems for truck, trailer, transit, marine, and rail applications), Trane
(heating and cooling ventilating systems), American Standard (home heating system) etc. We
can see that all these products are related to one another or come under the same class of
mechanical products. This diversification is related as these products can be manufactured
together, or can use some common parts as well.
References
Arthur, F. (2019). Johnson & Johnson Scandals . Retrieved from
https://www.drugwatch.com/manufacturers/johnson-and-johnson/
Lopez, J. (2017). What is outsourcing? What does it mean for companies? Retrieved from
https://medium.com/coderslink/what-is-outsourcing-what-does-it-mean-for-
companies-eff73fe60372
L'Oréal. (2019). L'ORÉAL AND BEAUTYTECH. Retrieved from
https://www.loreal.com/group/loreal-and-beautytech
Microsoft. (2016). Microsoft to acquire LinkedIn. Retrieved from
https://news.microsoft.com/2016/06/13/microsoft-to-acquire-linkedin/
Mittal, A. (2018). More on Related Diversification. Retrieved from http://www.more-for-
small-business.com/related-diversification.html
McKiney . (2017). The six types of successful acquisitions. Retrieved from
https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-
insights/the-six-types-of-successful-acquisitions