Strategy Case Study - Sugar on the Way Out?

The business strategy being followed by Tate & Lyle is well worth some attention by A2 students. There is a good piece in the Observer today which outlines the potential decision by Tate & Lyle to exit the sugar refining industry - a business with which the brand is synonymous.

The article highlights some of the significant competitive issues faced by Tate & Lyle in that market - excellent examples of how the external environment can reduce the attractiveness of an industry to existing players. We’ll see later this week whether Tate & Lyle decide to exit sugar refining to focus on their other businesses.

A nice paragraph at the foot of the article summarises other well-known brands and businesses that have taken the decision to “exit” markets in which they were previously significant players.

“If Tate & Lyle disposes of its sugar operation, it will not be the first company to ditch the business it is best known for. Whitbread sold its brewery division to Interbrew in 2001 to concentrate on hotels, restaurants and Costa Coffee. IBM got rid of its personal computer business to China’s Lenovo in 2005 and is now an IT services group. ExxonMobil announced in 2008 that it was selling its thousands of petrol stations, which trade under the Esso and Mobil names.”

Students can discover more about Tate & Lyle’s sugar refining activities here