One of the most frequently asked questions in our Business Acumen training sessions is about large companies selling off business units or brands. It inevitably happens after a discussion on frameworks of strategy where we share that the most successful companies on the planet choose a strategic value proposition to their customers, execute it flawlessly, and most of all, stick with it over time.

After the introduction of the framework, the typical question sounds like this, “Hey Rob, so if I understand this correctly, the best companies look at their entire portfolio and have the same value proposition for each business unit or brand? Do they have to? You see, here at XYZ Corporation, we have one business unit that is the Product Leader and has the most innovative products, another that is all about great customer service, and a third that competes as a value brand on price. Oh, but sometimes that is switched around based on region.”

What could possibly go wrong with a business strategy like that, I say.

Which brings me to today’s news that Kraft Heinz is exploring the sale of its Oscar Mayer business. Oscar Mayer is world renowned for meat and its biggest seller of the good old Oscar Mayer wiener. The reason? Kraft Heinz is reconfiguring its portfolio to target a more health-conscious, nutritious consumer and unfortunately, hot dogs and other processed meats don’t fit that goal.

Some analysts thought a fast-food slowdown would never happen, but it is here and a lot of economists and business leaders are trying to make sense of it.

KFC, McDonald's, Starbucks, Pizza Hut, and many other similar fast-food retailers are reporting significant sales slowdowns and it should be very concerning to all business leaders.

Starbucks, in particular, experienced a notable drop in same-store sales for the latest quarter, sending its shares plummeting by 17% on Wednesday. Joining the fray, Pizza Hut and KFC also reported shrinking same-store sales figures. Even industry stalwart McDonald's acknowledged the challenging landscape, adopting what it terms a "street-fighting mentality" to retain value-minded consumers.

The news that Walmart is shutting down its healthcare clinic business is shocking on many levels but also goes to demonstrate the power of strategic discipline from a business acumen perspective.

Just a few months ago, Walmart was talking about expanding and growing to meet the emerging needs of patients and vertically integrating services into products through its network of pharmacies and stores that sell over-the-counter products.

So, what changed, and what business acumen lessons can be learned?

The Press Release

Walmart’s press release contained some interesting insights:

“BENTONVILLE, Ark., April 30, 2024 — Back in 2019, we launched Walmart Health Centers. During our five-year journey, we made meaningful impacts with patients while continuing to learn, pivot, and evolve. While our mission to help people save money and live better remains, today we are sharing the difficult decision to close Walmart Health and Walmart Health Virtual Care. Through our experience managing Walmart Health Centers and Walmart Health Virtual Care, we determined there is not a sustainable business model for us to continue.”

If you are listening carefully to the business news, you will have heard the experts talking about the impacts of a “soft landing” and how that will affect business performance from now until the end of the year. 

Just a few days after I shared a blog post on the incredible leadership lessons I have observed from hotel General Manager @tomboyer which include his team going above and beyond the call of duty because it was the right thing to do, I had one of the worst hotel experiences in my life.