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STRATEGIC PERSPECTIVES ON MARKETING
MKTG45165
CADBURY REPORT
12TH DECEMBER 2013
WORD COUNT – 3727
STUDENT ID NO. – N0533900
2
TABLE OF CONTENT
I. Executive summary ______________________________________4
II. External Environment
PESTEL Analysis _________________________________________5
Porter’s Five Forces _______________________________________8
III. Internal Environment
Resource Based Analysis
Tangible Resource _______________________________________12
Intangible Resource ______________________________________14
Tows Matrix ____________________________________________16
IV. Vision Statement _______________________________________18
V. Values of Cadbury ______________________________________19
VI. Corporate Social Responsibility
CSR Stances ___________________________________________21
VII. Cadbury in Nigeria
PESTEL Analysis ________________________________________25
3
CAGE Analysis _________________________________________ 26
VIII. Reason behind entering the market ________________________28
IX. Market Entry strategy ___________________________________ 28
X. References ____________________________________________29
4
EXECUTIVE SUMMARY
This report contains research analysis of Cadbury that includes external and
internal environment. Models like PESTEL, Porter’s Five Forces, Resource
based analysis, TOWS Matrix, CAGE Analysis, etc. have helped me to
analyze my research in a better way. They help us to understand the political,
economical, social, legal, environmental etc. factors about the company, also
the strengths, weaknesses, opportunities and threats of the company help you
better understand the problems and gives a solution on how to make it better.
It makes it clearer and specific to analyze the data and the facts using these
models. Also by using Porter’s five forces model, you figure out the
competitors, what is company’s buying power, supply power etc.
Cadbury’s Corporate Social Responsibility approach towards its workers,
employees, and their families and also towards the community, schools etc. is
being covered by the activities they are doing for the society.
This report also covers a research analysis on how the company can enlarge
their business overseas by using PESTEL of the chosen researched country
and CAGE Analysis by comparing the country’s situation to the current UK’s
situation. It also gives the information on how and why you should think of
entering the other market, the main marketing strategy on why to enter the
new market on the basis of CAGE analysis.
The references given at the end of the report are all according to the research
done. All the books, journals, websites etc. referred to gather all the correct
information and put it accordingly in the report. It also helps you to analyze it
better.
5
QUESTION 1
EXTERNAL ANALYSIS
A company’s strategic decisions can be subjective to many factors. To
analyze External environment, one should be aware of trends, changes and
other happenings like change in customer preference, competitors activities
etc. One should also keep knowledge about the technological developments
and political changes that can affect strategic plan. External analysis also
helps us to know better about the company through PESTEL and Porter’s
Five Forces. Company’s situation becomes clearer after putting and dividing
information in tables. Analyzing External environment helps to generate profits
and to cut down the costs. It also contributes in enlarging knowledge and
support learning.
External analysis is divided into two categories:
Micro Environment
Macro Environment
Micro Environment is Porters Five Forces and Macro Environment is
PESTEL.
PESTEL
POLITICAL Political decisions have an impact on the
company it can be either positive or
negative. For example: increase in taxes
reduces the buying frequency of the buyer
and vice versa.
6
As chocolates are not very healthy and it
leads to obesity, government is worried
about the heart problem that is costing a lot
for NHS.
ECONOMIC An interest have an adverse affect on buying
behavior as interest increases, people tend
to save more and spend less and as income
decreases consumer are most likely to pay
on their craving for chocolate.
If the minimum wage for employees were
brought down, it will decrease the cost for
the company as well as reduce the sales
from the consumers.
Keeping heed of the Advertising sector,
Cadbury must lower its fund in advertising.
SOCIAL Due to the increasing trend of eat and go in
people nowadays, vending machine culture
has become very popular.
Locals with small enterprises near Cadbury’s
World would benefit from the money that is
being spent by its customers.
The people read about the raw materials
used in the making of the product before
consuming it due to their health conscious
nature these days.
Dairy milk was to become fair trade certified
in UK. [Guardian, 2009]
Cadbury has innovated to make its product
suitable for health conscious people, as it
was also a growing concern for the
government.
7
TECHNOLOGY An increase in capital investments such as in
buying modern technology to keep
themselves at par with competitors would
means efficient production of goods but also
result in job losses.
Research and Development is the key to
innovation and keeping at bay with
competition.
Heat resistant chocolate
ENVIRONMENTAL Earlier Cadbury could dispose of its waste
into the river along which it was situated. But
due to the new legislation, that it not
possible. This has made its costs shoot up.
Make sure that moral and sustainable
acquisition of raw materials and other inputs
Lessening of carbon and water use and
packaging.
In 2007, Cadbury created an innovative
approach to their production due to
environmental concerns. They created a
new design called ‘Purple goes Green’ in
collaboration with experts such as Forum for
the Future and the Carbon Trust.
Their new Eco Easter Egg chocolates
consume 75% less plastic and 65% less
cardboard. In total they saved 202 tones of
plastic over their 2008 UK Easter
chocolates.
LEGAL More laws need to be in place to ensure that
the work environment is safe and the
8
employee is safe and secure.
Due to observing the laws perfectly, the
production cost imported on Cadburys was
exorbitant.
Fair-trade
Co. is associating itself with activities such
as recycling, harvesting etc.
Cadbury’s Dairy milk got the patent over its
famous purple color after a high court ruling.
[Thinking made easy, 2010, The Student Room and Keynote, 2013]
PORTERS FIVE FORCES
Supplier Power Though Cadbury has many
contracted suppliers that can
sustain their on-going
business, there is threat from
existing competition.
However, the raw materials
used by Cadbury such as
nuts or special ingredients
ensure that they have their
leading edge.
A very cordial relationship
between company and its
supplier gives competitive
advantage over their rivals or
Low
9
competitors.
Barriers to entry Since the company is widely
well - known all over the
world and well known among
the masses, Cadbury has
many countries that believe
and have faith in Cadbury.
The only obstacle that might
come in the way for Cadbury
is finding suitable location
They need to ensure that
they oblige with the laws of
every nation and keep in
mind the foreign policies for
smooth functioning.
Low
Power of Buyer The demand is decreasing
owing to the concerns of the
new health conscious
masses. Prices of the
products do not matter to
customers as competitors
who provide the similar
products at much cheaper
price. This influences
customers to shift to the other
brand.
High
Competitive Rivalries Number of businesses is
vying for the throne of
supremacy over Cadbury and
since many years. Taste and
High
10
choices of the people are the
main reason behind decision-
making. And in the previous
times, Cadbury has been
continuously focusing on
innovation, making it difficult
for its competitors to survive.
Threats of
Substitutes
The threat that comes from
the other competitors is very
minimal. The reason behind
this is the brand strategy
already created by the
company. Through their high
level of equity, the brand
name is transformed into
three different categories that
make it more effective in the
market. It allows the
corporate brand name to be
combined in supporting the
product identification.
Moderate
[Thinking made easy, 2010]
RECOMMENDATIONS –
Cadbury should focus on the chocolates having fewer calories, as people
nowadays want healthy food. Also should take care of producing chocolates
to other developing countries as competitors are emerging their products in a
very fast rate. Cadbury is doing a lot of things for the environment also by
recycling waste, saving plastic etc. Cadbury chocolates when had launched
11
had some problems of finding worms in the chocolate that had become a big
hype and turned into bad marketing for them. It was a loss because the
number of people eating chocolates had reduced. They should be considerate
about such things as Cadbury being a renowned and a very trusted company.
12
QUESTION 2
INTERNAL ANALYSIS
Internal study helps us discover strengths and weaknesses and gain
competitive benefit. Essential abilities have been incorporated in the
competitive advantage owing to which the organization can receive moderate
revenues.
To achieve competitive advantage the resources should be acquired, bundled
and leveraged.
Internal analysis includes resources, capabilities and competencies.
The framework of internal analysis -
1). Global economy - it can be achieved by overtaking current strategy by new
international strategies and by making the resources available globally.
2). Global mind - set to analyze the internal environment by taking into
consideration the broad market.
3). Analysis outcome - a proper analysis of which resources and capabilities
should be leveraged and when.
RESOURCES
Internal analysis starts with resources, which are assets of an organization.
Resources cover a concept of stakeholders. There are 2 types of resources -
1) Tangible resources
2) Intangible resources
TANGIBLE RESOURCES -
They have been divided into 4 parts:
FINANCIAL Cadbury enjoys the because of their
13
RESOURCES wide range of products, they have
capitalized premium as well as low
cost market.
Cadbury invested a huge amount of
9.8 million in community projects.
[Cadbury Schweppes corporate and
social responsibility 2006]
ORGANIZATIONAL
RESOURCES
Cadbury follows a matrix of
global function and no of
business units. Management
structure is been divided into 3
executive directors and 5 non-
executive directors who plan
strategy and take decision for
the company on long-term
basis. The concerns are mostly
from the shareholders. The key
fact that Cadbury emphasizes is
growth, efficiency and
capabilities.
[Cadbury Schweppes corporate
and social responsibility 2006]
PHYSICAL
RESOURCES
Cadbury has stores in almost
60 nations. Cadburys head
production unit is located at
Bourneville in Birmingham.
Cadbury has its visitor’s Centre.
Cadbury asset are worth 3.2
billion. 70% of its market share
is in India.
14
TECHNOLOGICAL
RESOURCES
Cadbury received a copyright
as a legal producer of cocoa.
Some of the key attributes of
the company are slogan such
as “glass and a half” and tagline
such as absolute pure, posters
and advertisements of iconic
heroes, gorilla drum, eyebrows.
Cadbury focused on fair-trade
cocoa that has been termed as
trade secrets.
They also used technology
such as MOSS web builder
system.
INTANGIBLE RESOURCES –
HUMAN RESOURCES Cadbury has a varied range of
employees. Decision-making is
highly decentralized. Several
facilities are given to
employees such as summer
hours scheme, cafeteria and
transportation facilities, and
flexibility of time. The dilemma
of employees was accepted
and changes were made
according to the dilemma. The
employees are rewarded for
their extra effort. Some specific
15
employees are also allowed for
international assignments.
[Cadbury corporate
responsibility and sustainability
report, 2007/2008]
INNOVATION
RESOURCES
Due to health consciousness
among people, Cadbury came
up with products with no sugar
added in it, natural colors and
with low calorie. Various
portion sizes of the entire
product were also been
developed.
[Cadbury corporate
responsibility and sustainability
report, 2007/2008]
REPUTATIONAL
RESOURCES
The quality and loyalty of
Cadbury had made it a
common man’s brand. It has
become a brand. It has found
to have no adulteration.
Cadbury concentrates on
social responsibility towards
various communities. They
give a lot of preference to
stakeholders, focusing on their
employees, suppliers and
buyers well being.
Cadbury also concentrates on
environment by reducing waste
in form of plastics.
16
[Cadbury corporate
responsibility and sustainability
report, 2007/2008]
TOWS Matrix –
Strengths
Cadbury is the
biggest
confectionery
market.
Strong Research
and development
and innovation.
A trusted and
premium quality
brand.
Strong parent
brand of Kraft
food.
A wide variety of
products on offer.
Weaknesses
A few instances
of products recall
hampering brand
image.
A few
controversies
regarding
advertising,
worms etc. made
international
news.
High competition
and threats of
substitute.
17
Opportunities
Diversification of
product range.
Increase reach in
rural markets
Expanding into
developing
markets like
China, Russia
and India which
has growing
population,
increasing
wealthy
consumers and
accordingly
increasing
demand for
confectionery
products.
SO
Coming up with
new and
innovative
products.
Explore products
in rural market
and other
countries.
WO
Expand more
products than
your competitors
keeping in mind
about the brand
image.
Threats
Health
consciousness
among people
Other
competitors
coming up with
more products at
a lower cost.
ST
Developing wide
range of products
keeping in mind
consumers
demands and
wants.
They should
continue working
on low-calorie
WT
Variety of
products with
good brand
image.
Keeping in mind
the price factor.
18
chocolates for
health conscious
people.
RECCOMMENDATIONS –
Cadbury should continue helping their employees and workers and other staff
members by giving good facilities. Cadbury should definitely expand their
other products in rural areas and populated countries like India, China, and
Russia etc. where the demand is more for confectionery products and supply
is less comparatively. Cadbury in those countries is a very big market but has
less product distribution.
There are other competitors who have come up with more products in
reasonable rates that should make Cadbury worry and also should think on
producing chocolates keeping in mind the price factor. They are also doing a
very good job by producing low-calorie chocolates for people who are
concerned about their health. Nowadays people have become very health
conscious and have stopped eating confectionery products and other things
which is fattening or has calories.
19
QUESTION 3
Values –
Inspire trust
Act like owners
Be open and inclusive
Discuss. Decide. Deliver.
Vision –
Our vision is to be the biggest and the best confectionary company in the
world.
They have worked on the vision by their VIA sets out development as a main
importance which is embodied by the mantra – ‘Fewer, Faster, Bigger, Better’.
This priority channels are their efforts towards initiatives such as focusing on a
fewer number of advantaged global and regional brands, (spending in getting
a our new product innovation into a faster market, by utilizing joined up
marketing and commercial programs to get a huger impact and underpinning
the whole plan by executing our initiatives better.
Corporate Social Responsibility
One of Cadbury’s specialties is corporate responsibility. For nearly 200 years
they have appreciated that “doing good is good for business”. They have
made a huge progress over the years in their approach by working and
moving from the point of view of ‘’responsibility’ to ‘sustainable business
practices. A sustainable commitment is a responsibility, which is combined in
the business planning and implemented with disciplined, and ability. Cadbury
has applied their commercial mantra of ‘fewer, faster, bigger, better’ to their
Corporate Social Responsibility practices, working on the leading-edge
20
programs like ‘Purple Foes Green’, ‘Be Treatwise’ and ‘Cadbury Cocoa
Partnership’ responsible consumption enterprise.
[Mondelez International, 2013]
Being amongst the largest food company, Cadbury is promoting healthy
lifestyle. The main purpose behind this is to point out certain problems such
as, working with consumers, companies, governments etc. With the help of
Mondelez Foundation Cadbury is finishing $ 180 million promise by attaining
products and raw material by local agriculture, increasing physical activity and
also providing healthy nutrient education to poor families and children.
As being such a huge food company with an increasing reputation, provides
Cadbury an upper hand to deal with issues such as obesity and hunger all
around the world.
Their investment towards the community includes the following-
- Investment in making programs for communities, which help kids playing,
aware about food choices and recipes for growing healthy food and snacks.
- Motivation of employee contribution in money, Skills and time.
- By providing donation in cash and kind, Cadbury helps disaster struck areas.
Cadbury also works with growing non-government organizations to make a
positive impact. Some of them include children partnership in Brazil known as
INMED, Charity Federations in Russia and Germany and Save the children
partnership in Asia.
A Corporate Social Responsibility website known as “DearCadbury.com” was
launched so as to provide knowledge to customers regarding responsible
consumption, moral sourcing and positive environmental impact. It has
increased its reach to target customers and schools and employees.
[Mondelez International, 2013 and BrandRepublic, 2008]
According to Cadbury’s PLC: Annual Financial Report, 2013 -
83% believe that Cadbury is the best place to work for Colleagues as
per driving the green agenda 5. Nurture and reward
21
It has been stable till now to attain 75% of Employee Climate Survey
results with 2008 colleague commitment score of 3.35 and commitment
score of 3.08 out of 4
Majority management staff is female population who has invested in
2.3% of pre-tax income capitalized in public.
Communities’ causes –
Volunteering has become a worldwide engagement.
They are engaged in schemes like the Millennium Development Goals
including: Sarvam, Trident Smiles, Africa Aid, and the HIV/AIDS
program “Purple goes Green”.
There 12 Point Action Plan regarding consumer health fear. Keeping in
mind consumer’s interests’ means that customers can make products
and give information to fulfill their needs. This includes:
Number of increased product choices, organic, pure and low-calorie
Improved nutritional labeling including Guideline Daily
Amounts (GDAs)
Inspiring accountable consumption via their ‘Be treatwise’ initiative
30+ is related with rules and reports.
22
CSR STANCES -
laissez-faire
( “Let’s Do” )
Enlightened
Self-interest
Forum of
Stakeholder
Interaction
Shaper of
Society
Rationale Legal compliance: Make
profit , pay taxes and provide
job
Sound business sense Sustainability or triple bottom
line.
Social and market change.
Leadership Peripheral Supportive Champion Visionary
Management Middle management
responsibility
System to ensure good
practices
Board level issues.
Organizational wide-
Monitoring
Individual responsibility throughout the
organization
Mode Defensive to outside
pressures
Reactive to outside
pressure
Proactive Defining
Stakeholder
relationships
Unilateral Interactive Partnership Multi-organizational Alliances.
23
RECCOMMENDATIONS:
Forum of stakeholder interaction –
Stakeholders of the company are given an equal right to participate and give
feedback on the loss or profit of the company. Their feedback is considered
equally important and they do take an action accordingly.
Sustainability or triple bottom line –
Cadbury moved on from a mindset of ‘responsibility’ to ‘sustainable business
practices’. Sustainability commitments have joined the vision into Action
business Plan.
Supportive –
Cadbury has always been very supportive and co-operative to the consumers,
schools, its own employees, workers, etc. They have always come up with
different action plans, strategies to help the community.
System to ensure good practices –
Cadbury this year has come up with new Christmas surprise for kids. On
December 25th they have planned to call Santa Claus to come and give gifts
and chocolates to all the kids. Similarly, there are many such things and
initiatives Cadbury come up with every year for the community.
Proactive –
Cadbury has done good development having good performance and growth in
the upcoming markets. Cadbury has also gained good market share by
having an increased sales by 10% growth over the last year’s performance.
24
Interactive –
According to me Cadbury is interactive in the last column because all the
workers, stakeholders, employees etc. is given a chance to give a feedback
and all the feedbacks are taken into consideration and worked upon.
Everybody has equal rights.
25
QUESTION 4
I have chosen Nigeria as a country. There is a lot of poverty and the economic
situation is very poor in the country by corrupted governments. But there are
still chances of improving the current situation by taking a turn in democracy
and open market situation economy. It has a lot of scope.
POLITICAL The political situation of the country is very
corrupted.
It affects the competitive advantage
ECONOMIC Economy is very low. It is dependent on the
international market.
SOCIAL 57% of the Nigerian population lives in poverty
Education is also not as per the mark as there is
a lack of highly educated professors
TECHNOLOGY The national Economy is dependent on the
international technologies and equipment.
LEGAL Nigeria’s foreign direct investment is rising very
rapidly. It recorded USD11 billion in 2009.
UNCTAD ranked Nigeria nineteenth FDI recipient
in the world Therefore, Nigeria has made it into
top 20 global destinations for FDI.
ENVIRONMENTAL Water impoundment and irrigation schemes have
negative impact on Nigeria According to
Naturvernforbundet, 2010.
26
Nigeria is lagging behind in two major prospects
such as law enforcement and protected system
infrastructure.
According to Ebong. R. (pg. 1,2002) “Recently
environmental degradation and unsanitary
conditions affected cities in Nigeria”.
CAGE –
CULTURAL DISTANCE
Both have the same language.
English as there common
language though there are 521
different languages spoken in
Nigeria.
There is a lot of cultural
difference between Nigeria
and UK. In UK, majority people
are British and in Nigeria,
majority is Muslim and
ADMINISTRATIVE AND POLITICAL
DISTANCE
UK is much better politically
than Nigeria, as Nigerian
Government is very corrupted.
The crime rate is also more as
compared to UK.
27
Christians. [Official website of
Kwintessential]
GEOGRAPHIC DISTANCE
Size of Nigeria is smaller than
UK
UK climate is moderate
whereas Nigerian Climate
varies with terrain.
Both UK and Nigeria are on
the Western region. UK is
Western Europe and Nigeria is
West of Africa.
[Official website of
Kwintessential].
ECONOMIC DISTANCE
Lead zinc, tin, limestone, rice,
gold, marble, salt, ply wood,
palm oil, rubber, ignite, oil and
gas, cocoa, iron ore, coal and
cement are the natural
resources you find in Nigeria.
[Report on Naija blog, 2012]
The economy of UK is higher
than Nigeria. Nigerian
economy is comparatively low.
[Official Website of
Kwintessential]
But, Nigeria has the largest
economy and second largest
democratic state.
[SWOT Analysis of Nigerian
Business Environment,
Abiodun, B. Rashidat, T. 2013]
[Leadership Development in a Global World: The role of companies and
business schools, 2012]
28
Reason for entering the market -
Nigeria has a diverse culture and there are all different kinds of people.
Some are civilized and racist. Also there are many languages spoken
in the country. There are many strong reasons that can make sure of a
successful business. It has the future for development and constancy.
Nigeria can also take a huge advantage of expanding worldwide
through its powerful oil and gas segment that can help it earn a lot of
foreign exchange in the field of exports.
There are a lot of opportunities available that can improve and expand
the market. Huge number of population increases demand for
production services, if environmental conditions are bad, supply will
reduce. There is a growth of improvement in economic, political and
social conditions, which can attract many other businesses.
Raising export, diversification in economy, trading in goods, services
and labors can help the country to develop the relationships. Nigeria
should obtain one of the most important opportunity of outsourcing as it
has huge and hardworking workforce. Globalization will help Nigerian
companies to enjoy doing business with overseas companies, which
indirectly help them earn more profit.
MARKET STRATEGY –
Nigeria has a great scope of starting a new business.
People can export technology and workforce in Nigeria through FDI. It is also
easier to do a Joint Venture with a local Nigerian so to make it easier to set up
a business.
29
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