The document summarizes the history of turnarounds at Sara Lee Corporation, including what went right with international acquisitions of food brands in the 1990s, what went wrong internally due to decentralized management and externally due to recession in the early 2000s, and the transformation plan implemented in the late 2000s to restructure the business around regional units and portfolio categories.

1. A Tale of Another Turnaround

4. WHAT WENT RIGHT?
• International acquisitions
– Douwe Egberts
– Cheff Pierre Pies
– Superior Tea and Cofee Company
– Gallo Salame
• Consolidating the food industry
• Strong Brands
– Sara Lee
– Kiwi
– Hillshire Farm
– Coach
– Playtex

5. WHAT WENT WRONG?
• Internal Issues
– Different businesses operating
independently
– Decentralized management led to
redundant costs
– Complex organisation structure did
not help retailers
– Lost touch of consumer preferences
– Poor Hedging Strategies

6. WHAT WENT WRONG?
• External Issues
– 2001 recession
– Decentralized management led to
redundant costs
– Complex organisation structure did
not help retailers
– Lost touch of consumer preferences

7. 1997 TURNAROUND
• $ 3 bn share repurchase by selling manufacturing facilities
• Deverticalization – From Manufacturing to Sales & Brand
Management
• Stock moved up by $6
• Crisis: Recalling Contaminated Hot Dogs and meat
• Impact:
– $ 5 million in lawsuits
– $ 200, 000 fine for misdemeanor
– $ 3 million for food-safety research
– $ 25 million for plant renovation

8. 2000 TURNAROUND
• Laying of 13,000 employees
• Elimination of non performing brands
• Taking over Coach, the leather goods company
– Away from core competency
– Sold it in 2001
• Didn’t implement Category buyer for retailer
• Aggregating orders and distributing iit to businesses
didn’t happen

9. TRANSFORMATION PLAN
• New Organisation Structure
– North American Retail
– North American Food Service
– Sara Lee International
• Additional Portfolio:
– Meats Europe - $ 1.1 bn business
– Direct Selling - $450 mn business
– US Retail coffee - $300 mn business

10. RECOMMENDATIONS
• New Products
– NPD for health conscious customers
• Aggregating businesses
– Aggregating brands according to category
– Adapting to Retailers
• Better financial management
– Through better cost management
– Better hedging strategies
– Saving through centralization of back end operations

11. THANK YOU
GROUP 10