Course Title: Strategic Management

Course Code: MGT-412

Submitted to

Date of submission:

17th

April, 2012

Submitted by

Dewan Imran Uddin 091-12-0186 Rinku Biswas 091-12-0179 Sayed Hossien Tuhin 091-12-0340 Kedar Nath Roy 091-12-0203 Md. Nazrul Islam

091-12-0068

Submitted to

Sawkat Ara Khanam Course Instructor

ASA University Bangladesh

17th

April, 2012

Showkat Ara Khanam

Course Instructor

Faculty of Business

ASA University Bangladesh

Subject: Letter of transmittal for the Case Study on “Costco Sara Lee Corporation”.

Dear Madam,

We are glad to submit this Case Study on “Sara Lee Corporation”. Since this case study is

necessary as a partial fulfillment of our BBA studies course. We tried our best to work on it

carefully and sincerely to make it perfect.

We are very thankful to you for your sincere co-operation throughout the duration of the course.

If you need further clarification on any issues, please summon us any time at your convenience.

We would like to request you to accept our assignment and oblige thereby.

Sincerely,

Dewan Imran Uddin

091-12-0186

Rinku Biswas

091-12-0179

Sayed Hossien Tuhin

091-12-0340

Kedar Nath Roy

091-12-0203

Md. Nazrul Islam

091-12-0068

Acknowledgement

We gratefully acknowledge the kindness of all people concerned this assignment. Our thanks

also go to our friends who helped us many ways; we highly acknowledge their help &

contribution. We owe special thanks to our honorable course teacher- Showkat Ara Khanam.

.

Many of us who are close to us provide valuable comments & suggestions. We are indebted to

that people:

Table of content

Serial No. Titles Page No.

1 Title page 2

2 Letter of transmittal 3

3 Acknowledgement

4

4 Company profile at a glance 6

5 Sara Lee Corporation profile 7-9

Vision and Mission Statements

1.0 Introduction

Sara Lee Corporation (At a glance)

Sara Lee Corporation is a global consumer-goods company based in Downers Grove, Illinois,

USA. It has operations in more than 40 countries and sells its products in over 180 nations

worldwide. Its international operations are headquartered in Utrecht, the Netherlands.

Sara Lee Corporation is a leading global manufacturer and marketer of brand-name consumer

packaged goods within three major business areas: food and beverage (52 percent of fiscal 2002

revenues), intimates and underwear (37 percent), and household products (11 percent). Within

food and beverage, Sara Lee focuses on three principal areas: packaged meats, bakery products,

and coffee and tea beverages. The company claims to be the world's leading producer of

packaged meats through such brands as Hillshire Farm, Ball Park, and Jimmy Dean. In bakery

products, the firm produces fresh and frozen desserts, breads, and doughs, including the famous

Sara Lee cheesecake and Earthgrains bread. Through such brands as Douwe Egberts, Maison du

Café, Hills Bros., Chock Full o' Nuts, and Pickwick, Sara Lee's beverage business holds one of

the top two positions in coffee and/or tea in several European nations, is the leading coffee

marketer in Brazil, and maintains the number three position in the U.S. retail coffee market. Sara

Lee's apparel operations focus on intimates, underwear, and legwear; the company holds leading

share positions in these market sectors in North America, Europe, and several Latin American

countries. The firm's well-known apparel brands include Bali, Champion, Dim, Hanes, Hanes

Her Way, Just My Size, L'Eggs, Playtex, and Wonderbra. The household products operation is

Sara Lee's most global business and has leading positions in four categories: shoe care, body

care, air care, and insecticides. Brands include Kiwi shoe care products, Ambi Pur air care

products, and Sanex body care products. Although seemingly disparate, most Sara Lee products

would be considered staples, helping insulate the company from the effects of economic cycles.

2.0 Company Profile

Sara Lee Corporation: Retrenching to a Narrower Range of Business

2.1 Company Name: Sara Lee Corporation

2.2 Address: Corporate Headquarter

3500 Lacey Road

Downers Grove, IL 60515, United States

Telephone 630-598-6000 Fax: 630-598-8482

2.3 Key Person: Marcel Smits (Acting CEO, 2010- )

James Crown (Chairman, 2010- )

Stephen J. Cerrone Executive vice President of Human Resources

Mark Garvey Chief Financial Officer

Paulette Dodson interim General Counsel and Corporate Secretary

Christopher J. (CJ) Fraleigh Executive vice President

B. Thomas Hansson Senior vice President

Frank van Oers Chief Executive Officer

Marcel Smits Executive vice President and Chief Executive Officer

2.4 Product line:

2.5 Branches: 1. America

2. Europe

3. Australia/New Zealand

4. Asia

2.6 Established Year: 1939

2.7 Key Competitors: Tyson Foods Incorporation

Kraft Foods Incorporation

• Food

Beverage

Household

Baby Care

Cosmetics etc.

Product Category

• Coffee

Butter-Nut Cappuccino

Packaged Meat

Skin care product etc.

Product Line

2.8 Vision and Mission Statements

Vision Statement: To be the first choice of consumers and customers around the world by

bringing together innovative ideas, continuous improvement and people who make things

happen.

Mission Statement: To Simply Delight you….Everyday.

2.9 Objectives:

Financial Objectives

Sara lee planed to achieve a 12% Operating profit margins.

Sales revenue expected to increase $14 million during the year 2010.

Expected to Increase shareholders value in fiscal year 2007 by delivering $370 million divident payout.

Planed to increase annual dividend.

Expected to increase annual cost savings of between $575 and $800 million.

Planed to down company's total debt to between $1.5 and 2 billion by fiscal 2010.

Strategic Objectives

Turned its full attention to growing the sales, market shares and profitability.

Company had a very lean manufacturing cost structure over rivals.

The potential of high sales volume.

Better product selection than rivals.

Provide quality product and better customer service than the rivals.

Strenghening the company's brand name appeal.

2.10 Strategies:

Corporate Level Develop a strong focus on consumer and customer needs

and on operating excellence.

Business Level

Offer competitive pricing, innovative new products and

brand building capabilities.

Establish new accounts with supermarket and discount store

customers.

Functional Level

Lean manufacturing cost.

Centralized purchasing to achieve economies of scope.

Implementation of a common corporate-wide information

system platform.

Operating Level Organize effective training program for the employees.

Promote special overtime schedule for their employees.

Five Forces & SWOT Analysis of sara lee food & Beverage division:

Sara lee’s food & beverage division included Ball park franks, Jimmy dean sauages, Hillashire

Farm deli meats, Sara Lee deli meats, sara lee bakery product, sara lee frozen product , and

Senseo single serving coffeemakers and coffee pods.

SWOT Analysis

Strengths

Sara Lee have product variety and diversification

Sara Lee has strong supply chain system.

Sara Lee has an strong innovation in production and distribution network.

They have competitive pricing model.

Achieved Loyal customer

Market share leadership, product are marketed in about 180 countries.

Weaknesses

Management team is changed in a very short interval.

Their promotional activity not that much attractive.

Their Operating level activities are not specified.

Opportunities

They use various innovations in their product and marketing system.

They provide a variety of Product and services expansion.

Their market emerging day by day.

Threats

Have to compete with strong competition.

With different competitors’ they have to maintain the price wars.

Have to continue their business with exchange rate fluctuation.

In their product line various product substitution is exist.

Have to survive with external changes (government, politics, taxes, etc).

Five forces generic strategy

Threat of competitors:

The biggest threat in the US food & Beverage industry is competition. In particular, the main

players are sara lee, kraft, Smithfield food, hormel and conagra . karaft is the main competitor,

with share 21 market share during 2006. Sara lee, as the 2nd

largest industry leader, with 19

percent market share, has adopted a cost leadership generic strategy.

Threat of New Entrants:

The food &beverage industry’s threat of new entrants is very low. New firms would be faced

with the task of beating the prices of economically giants immediate upon entry.

Given the economies of scale, brand recognition, service, and variety of product offerings that

sara lee, kraft, Smithfield food, hormel , conagra, and others continue to improve on each day,

this seems very unlikely. In addition, existing firms could afford to temporarily drop prices even

lower in order to force a new competitor out of the market.

Suppliers’ Power:

The suppliers to sara lee and other company have too much power. Sara lee collects most of all

raw materials from supplier. if supplier their delay delivery or increase prices then sare lee

should be affected.

Buyers’ Power:

Buyers’ actually hold a good deal of power in the US food & Beverage industry. Generally the

US food & Beverage market is perfect competition market. In the market there have lots of

competitors and buyer always prefers good quality product with low price. If sara lee fail then it

can also loss their market share.

Availability of Substitutes - What is the likelihood that someone will switch to a competitive

product or service? If the cost of switching is low, then this poses a serious threat. Here are a few

factors that can affect the threat of substitutes:

The main issue is the similarity of substitutes. For example, if the price of

coffee rises substantially, a coffee drinker may switch over to a beverage

like tea.

If substitutes are similar, it can be viewed in the same light as a new entrant.

Conclusion & Recommendation

Sara Lee has several positions that it can take that can strategically grow its profitability.

The company currently has limited margins on its bakery line, especially from its dessert items.

Since Sara Lee has significant market share with its packaged bread in North America, the

company should eliminate its dessert sales and the sale of single-serving coffeemakers. Growth

in this segment is very slow, and is not growing within the foodservice industry either. By

selling off its dessert brands, Sara Lee can invest the profits of the sale into other innovations in

its other business units.

Sara Lee International should expand its household and body care brands into the United

States. Its air freshener brands hold significant market share in Europe, which could be utilized

in North America. The market for cleaning products and air fresheners is strong in the United

States. Sara Lee’s innovations would be very successful in the growing market across the

Atlantic. The company can also sell more of its insecticides in developing nations, where few

treatments are available to prevent bacteria. Nations in Africa are still growing, and could utilize

the insecticides to improve farming practices within the continent.

Beverage products sold by Sara Lee International produce almost 50% of all profits.

These beverages could be sold to local retail business, similar to what is done with Sara Lee

Foodservice. The company has already begun selling beverages in retail operations, and with the

current contacts and knowledge of the foodservice industry, profits could easily be managed.

This strategy allows Sara Lee to develop larger profits by selling its teas and coffees within local

businesses throughout Europe. If Sara Lee follows these strategies, the company will be able to

amass profits similar to what it had before its divestures.

They should more consurner about their marketing sector.

They should concentrate on their labor management.

They should implement a strong management team for long term benefit.

Sara Lee should innovate new marketing promotions.

They should be more specific in their operating level activities.