Diversification is a risk that companies have to take in order to stay competitive in it’s changing market. Some companies have been successful diversifying their business, and in opposition there are other companies that in the process of expanding their business have not succeeded.
For the purpose of this report, I will use the “Sara Lee Corporation” as a successful company throughout its diversification strategies. On the other hand, I would use Ebay as an example of a company that did not succeed in a diversification attempt (Skype acquisition).
In 1935 Charles Lubin and his brother-in-law started up a string of bakeries called “Community Bake Shop”, years later the company’s name was changed to “The Kitchen of Sara Lee” which was named after Lubin’s 8 year old daughter. In 1956 Nathan Cummings the owner of Consolidated Foods bought the company and changed its name to “Sara Lee Corporation”.
This company has been very successful, and today Sara Lee owns several brands in the food and beverage industry as, well as products in home and body care. Diversification has lead Sara Lee’s business for many years and it has helped the company to expand, in terms of international marketing. Sara Lee sells products in 180 countries worldwide and also operates in 58 countries. Its business strategies are based on trying to diversify the company investing in the same line of business or products that are close related. Throughout this strategy Sara Lee can
streamline its operations, reduce cost operation, and managers can have better access to the company’s operations.
The strong brand portfolio is another reason that has helped Sara Lee’s business succeed, its business includes Fresh Bakery, North American Retail, Food Service, International Beverage, and International Bakery.
Sara Lee in it’s effort to reaming competitive and providing excellent quality food and services to it’s costumers, have been...
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