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ANALYSIS OF
Submitted by:
A. Uma Ganesh
Section: A
Cadbury swot
CONTENTS
1. Company overview 3
2. Vision of Cadbury 8
3. Values of Cadbury 9
5. SWOT on R & D 13
6. Marketing Strategy 15
7. Marketing SWOT 17
8. Conclusion 19
9. References 19
♣ They make and sell three kinds of confectionery: chocolate, gum and candy.
♣ John Cadbury opened for business in 1824 - making us nearly 200 years young.
♣ Every day millions of people around the world enjoy their brands.
Their Business
♣ With over 45,000 employees working across their business in over 60 countries, Cadbury
is a large and complex organization.
♣ From 2003 to 2008 the confectionery business was led through a strong regional model to
ensure their top-down strategy was consistently implemented around the world. In 2006,
they introduced a strong category-led commercial organization which has progressively
been developing its role and impact since.
♣ At the beginning of 2009, they eliminated the regional structure to operate as seven
business units and leverage the strengthened category leadership across their markets. In
this section, you can find a description of their business units and functions.
While each unit’s management focuses on commercial operations in their geographical area, the
unit also maintains teams from each of the functions below.
Functions
In conjunction with the seven business units described above, they have seven global functions.
Category-led functions:
♣ Commercial
♣ Supply Chain
Corporate functions:
♣ Human Resources and Corporate Affairs
♣ Strategy
This structure enables the business units to focus on delivering the Group’s commercial agenda
and top-line growth, and allows the functions and categories to develop and drive global
Their Marketplace
Cadbury operates in the global confectionery market. The market is large, growing and has
attractive dynamics. The global confectionery market is the world’s four largest packaged food
markets. It represents 9% of that market, and has a value at retail of US$141 billion. Chocolate
is the largest category, accounting for over half of the global confectionery market by
value. Gum is the fastest growing confectionery category.
Globally, confectionery is growing at around 5% p.a., faster than many other packaged food
markets. Developed markets, which account for around 67% of the global market, grew 3% p.a.
between 2001 and 2006.
Focus Brands
They are investing in their most advantaged brands. Together, they generate
approximately half their total revenue and have significantly higher profitability than their
confectionery portfolio as a whole. They are Cadbury Dairy Milk, Trident, Halls, Green &
Black’s, The Natural Confectionery Co., Creme Egg, Eclairs, Flake, Dentyne, Clorets,
Hollywood, Stimorol and Bubbaloo.
By being globally strong across all three confectionery categories, they are building
competitive advantage – creating the right range, to be available everywhere, and for everyone.
They have a natural growth path based on making the most of their total confectionery business
and specific strategies for each category. In many markets they are already leaders in one or two
categories and can expand into a second or third by making the most of their global capabilities.
So in the UK their strength in chocolate and candy has enabled us to launch successfully into
gum. Similarly in India, they’ve expanded into the bubblegum business. And in the USA, they’ve
added chocolate to their gum and candy business.
Categories
Overall, the confectionery market is relatively fragmented. Even after the merger of
Mars and Wrigley, the top five players account for only 42% of the market.
Chocolate: Represents the biggest segment in the category with a 55% share in value and has
been growing at a rate of 6% in the last four years. Chocolate is mainly a regional business
where consumers seek a particular taste in each market. This brings about fragmentation in the
market as well as complexities in production. The top five producers account for 50% of the
global market, and there is scope for rationalization.
Gum: With a 14% share in confectionery sales, is the fastest growing segment at 7%, led by
innovation and marketing. This is the most consolidated segment with the top two players,
Wrigley and Cadbury, accounting for over 60% of the market. Gum ‘travels well’ and well-run
global businesses can generate good economies of scale. Innovation and formulation are also
important barriers to entry to new competition.
Candy: Is the most fragmented confectionery segment with a proliferation of local brands and
growth around 4%. The top five players represent only a quarter of global confectionery sales.
Functional candy such as cough drops, indulgent candy such as premium toffees and natural
products without artificial colours or sweeteners, has been drivers of market growth.
VISION OF CADBURY
Efficiency: Their efficiency priority recognizes that it is not enough to grow; they
must also be more profitable. They maintain a relentless focus on cost and
efficiency by reducing central functions and costs; consolidating their businesses
and reconfiguring their manufacturing and distribution. Their vision in to action
will help increase their margins to mid-teens by 2011 with the aim of delivering
mid-term margins by 2011.
Capability: Their capability priority ensures they continue to invest in the right
organization and skills to win. They have simplified and strengthened their
organization to a pure-play confectionery business. They manage their commercial
strategies on a global basis through their three categories of chocolate, gum and
candy and strong functional leadership.
Values of Cadbury
They are performance driven, values led. Throughout changing times, their constant
values have inspired us to be pioneers in business and in corporate responsibility. They help
ensure they are proud of their company and are critical to their core purpose of creating brands
people love.
Managerial Economics Page 8
Cadbury swot
♣ Performance: They are passionate about winning. They compete in a tough but fair
way. They are ambitious, hardworking and make the most of their abilities. They are
prepared to take risks and act with speed.
♣ Quality: They put quality and safety at the heart of all of their activities – their
products, their people, their partnerships and their performance.
♣ Respect: They genuinely care for their business and their colleagues. They listen,
understand and respond. They are open, friendly and they coming. They embrace new
ideas and diverse customs and cultures.
♣ Integrity: They always strive to do the right thing. Honesty, openness and being
straightforward characterize the way they do business. They have clear principles and do
what they say they will do.
♣ Responsibility: They take accountability for their social, economic and environmental
impact. In this way they aim to make their business, their partners and their communities
better for the future.
Their Business Principles are their code of conduct and also take account of global and local
cultural and legal standards. They confirm their commitment to the highest standards of ethics
and business conduct.
Their leadership imperatives are the behaviors that they need to be performance driven
and values led.
Aggressive: Working at pace. Competing to win and be first in the marketplace.Passionate about
being the best.
Growing their people: Making the most of both your own capabilities and those of others
around you.
Accountable: Delivering on your role and responsibilities. Making and honoring decisions.
Living their values: Actively looking to promote and advance their values.
Adaptable: Being innovative and resilient. Taking on change and new ideas.
Forward thinking: Making sound decisions with speed and the longer term in mind.
Customer insights,
Trends, and
Foresights.
♣ They’ve made a science out of knowing what people want now – and in the future. It
might be as simple as just responding to gum chewers who want the flavour to last
longer. Or as sophisticated as putting consumer insights together to spot trends and
generate foresights – projecting forward to anticipate and meet the changing needs of
tomorrow’s consumers.
Putting It All Together: They Stride brand with its ‘ridiculously long lasting flavour is an
example of innovation right across the spectrum: great insight creating a new brand in a new
format, using new recipe technology, and new packing, all communicated in a new way. Our
innovative communication campaigns include an annual Summer Solstice party and sponsorship
of the online sensation Dancing Matt.
Strengths:
. Weaknesses:
♣ The company is dependent on the confectionery and beverage market, whereas other
competitors e.g. Nestle have a more diverse product portfolio, where profits can be used
to invest in other areas of the business and R&D.
♣ Other competitors have greater international experience - Cadbury has traditionally been
strong in Europe. New to the US, possible lack of understanding of the new emerging
markets compared to competitors.
Opportunities:
♣ New markets. Significant opportunities exist to expand into the emerging markets of
China, Russia, India, where populations are growing, consumer wealth is increasing and
demand for confectionery products is increasing.
♣ The confectionery market is characterized by a high degree of merger and acquisition
activity in recent years. Opportunities exist to increase share through targeted
acquisitions.
♣ Key to survival within the FMCG market is increasing efficiency and reducing costs.
Cadbury Fuel for Growth and cost efficiency programmes seek to bring cost savings by:
1. Moving production to low cost countries, where raw materials and labour is cheaper.
2. Reduce internal costs - supply chain efficiency, global sourcing and procurement, and
wise investment in R&D.
Threats:
A strong foundation
They have been in India for 60 years and have a strong heritage and leadership position
with a 30% confectionery market share. We’re the No 1 chocolate brand with a chocolate market
share of over 70%. In fact, we’re so closely associated with chocolate that cocoa trees are often
called Cadbury trees. Even so, only around a third of the population currently buys chocolate.
That’s 700 million people still to introduce to the delights of Cadbury.
Functional advantage:
Cadbury Bournvita was launched here in 1948 and throughout its history has always
sought to provide nutrition that aids growth and all-round development today, the natural
goodness of malt, chocolate and milk is fortified with vitamins A, B1, B3, B6, B12 and C, plus
iron, protein, calcium, zinc, manganese and folic acid. No wonder it’s ‘a cup of confidence’.
Affordable indulgence:
They have increased their presence in the candy category through Halls and Cadbury
Dairy Milk clairs. As in other emerging markets with hot climates, Eclairs are proving popular
as an indulgent affordable treat. With delicious Cadbury chocolate in the middle, they melt in the
mouth, not in the heat. A new Eclairs Crunch format, with a crispy caramel shell, is just as
affordable and even more at home in hot weather.
Importing success
True to their total confectionery plan, they are also entering new categories, applying their know-
how from their success in other markets. They have already gained over 9% of the Indian
bubblegum market with the launch of Bubbaloo – a Latin American import that’s off to a great
start.
Strengths:
Weaknesses:
Threats:
♣ Key market maturity – the Dr Pepper Snapple Group’s key US carbonates market is set to
contract in the short term, as consumers continue to switch to healthier soft drinks. This
malaise will put pressure on margins at the company.
♣ High level of industry consolidation – the global soft drinks market is characterised by a
high level of consolidation, with the top rankings held by the major companies The Coca-
Cola Company, PepsiCo and Danone. As these companies are stretching their operations
globally, this will pose challenges for the Dr Pepper Snapple Group in terms of entering
new markets and building out its core sector presence.
♣ Rising raw material costs – the price of raw materials such as packaging, fruit and fuels
are expected to continue to rise in the short term, a development which is certain to place
greater downward pressure on the company’s profit margins and threaten development
plans.
Conclusion:
REFERENCES:
1. www.cadbury.com
2. www.cadbury.co.uk
3. Wikipedia
4. www.businessteacher.org.uk