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In a strategy designed to try and boost the company’s profit margin by an approximated amount of 12% by the year 2010, Sara Lee Corporation developed a strategy that saw it retrench eight of its business units in the year 2006. …
The strategy was also developed so as to allow the company to primarily focus its vital resources on the currently more profitable household products, beverages and foods industries with the aim of strengthening the company’s financial position. By the year 2007, Sara Lee’s Operating Excellence was seen not to be progressing as expected and hence the management introduced a new policy to help optimize the company’s overall productivity by initiating Project Accelerate (Thompson, et al., 243-256). Issues and Problems The seven units that Sara Lee divested generally included European nuts and snacks, direct sales, European and U.S. meats, U.S. retail coffee, European apparel, European Rice and Sara Lee branded apparel. By exiting from the operations of these eight businesses that the company perceived as being mainly nonstrategic, the company essentially followed a strategy that allowed it to increase its share of the corporate profits, due to the fact that most of the business units that the company retrenched were deemed as being unprofitable. By the year 2006, about five of these business units were seen to have negative net profit margins as well as negative operating margins. ...
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