Strategic management ..case analysis Essay Example | Topics and Well Written Essays - 1750 words

Strategic management ..case analysis - Essay Example account the stability in the firm’s profits – the years 1998-1999 was a period with no increase in the firm’s profits despite the facts that the investment on the firm’s units remained high. The plan of Brenda Barnes was based on the ‘divestiture of weak-performing business units and product categories accounting for $8.2 billion in sales’ (case study). The specific strategic decision could be characterized at a first level as risky – the business units involved in the plan represent the 40% of the firm’s revenues. In this context, the firm’s profitability would be reduced; however, Barnes believed that the specific initiative would lead shortly to the increase of the firm’s profitability. In accordance with the above, the retrenchment strategy suggested by Barnes has changed the firm’s existing line up. Up to the introduction of Barne’s strategic plan the firm was based on the simultaneous promotion o f various products/ services but also the continuous expansion of the firm’s operational activities through the acquisition of competitors; Barne’s strategic plan has led to the limitation of expansion of the firm’s activities but also to the increase of its strength regarding specific products/ services – those with strong brand names. The effectiveness of the specific strategy will be analyzed further on taking into consideration the market conditions and the position/ power of competitors. The products offered by Sara Lee represent a wide range of industries. At its beginning (1939) the firm was related with the distribution of specific products (sugar, coffee, tea). Gradually, the firm’s activities were expanded to many different industries (selling of meat, canned products, vacuum cleaners, personal care products, household products, athletic wear, grocery, bakery products, coffee brands and so on). The long – term attractiveness of these brands cannot be guaranteed; because all these products need to be equally promoted, the