Business And Marketing Strategy Cadbury

Introduction

Cadbury merged with Schweppes in 1969. Currently, this successful company is employing approximately about 43,000 people worldwide. Today, Cadbury Schweppes is the world's fourth biggest supplier of chocolate and sugar confectionery.

One of its products, Dairy Milk was introduced in 1905, and has become the most successful molded chocolate in UK history and the basic ingredient for many other Cadbury products. 95 years later, Dairy Milk is one of the world's most famous brand names and the company's leading chocolate bar by revenue.

Sales from Cadbury's Dairy Milk alone are estimated at over Ј135 million for 1995. Cadbury considers its success is based on three factors: quality, value for money and good advertising.

I am going to apply an analysis to Cadbury's current situation and its position to enter a foreign market

It is important to investigate on the internal and external environmental forces for the Dairy Milk in a foreign market. Relevant organisational and industrial information is required for the development of a SWOT analysis PEST analysis and PORTER'S 5 factors. The analysis of the environment and the consideration of the situational factors when designing marketing planning are critical as it would allow Dairy Milk to capitalise on organisational strengths, minimize any weaknesses, exploit market opportunities and avoid any threats.

SWOT ANALYSIS

Strengths

Cadbury's could get these advantages in going abroad. By entering a foreign market the company could:

* Maintain a stable growth of a company by maximising the use of its production capacity and which increases economies of scale.

* With its brand name, Cadbury could counterattack the competitors it faces in the domestic market by attacking their domestic market.

* Keep up with the financial strength by increasing its sales and profit.

* Acquisition rules in UK reduce its dependence on the UK market and therefore diversify its market specific risks.

* Overall, Cadbury has been successful through the new products.

Another strategy that has been successful for Cadbury involves striking strategic partnerships with other large companies.

Weaknesses

generally, as Cadbury has a weak position in the US market, thus, need to change its target to a different location. it also has a small total of market share altogether. Therefore in order to market the product in a new foreign market successfully, Cadbury would have to find out on how it can improve in order to have great performance. It is also good to find out what are the situations that they could avoid in order to be successful. In order to market products the following issues should be considered:

* Total production of chocolate bars and confectionary within the new market entererd.

* Consumption of chocolate products, which has been growing until 1991, remained fairly static in 1992, reflecting a fall in demand.

* Sales of milk chocolate bars has been slowly decreasing.

Opportunities

Through organic growth and acquisition cadbury's could make more opportunities on a worldwide scale. The Timeout Candy Bar market is growing worldwide. This company is also at the same time distributing its products via the internet. Besides developing the "Low Calorie" line of chocolates and sweets, they also offer the "Sugar Free" sweets line. Therefore in order to get the product into a new foreign market Cadbury would have good opportunities in store for them.

* To release new products into a new market which could increase market share

* To enter into a new market would be easier for them as they are one of the largest confectionary brands in the world

Threats

Due to its confectionary products, it is very important for Cadbury to be aware of any present or upcoming threats. The company should take note of the changes in the consumer's buying trend. It is perceived that consumers might shift from chocolates to "Healthy" snacks. If this were to happen, there might be a poor product development which would tarnish the Cadbury's name. Needless to say price wars would occur between its competitors like Mars, Hershey and Nestle. However if Cadbury is to market its products, the company has to be aware of the risks it could encounter. It might:

* Not understand foreign customer preferences and fail to offer a competitively attractive product;

* Not understand the foreign country's business culture or know how to deal effectively with foreign nationals;

* Underestimate foreign regulations and incur unexpected costs.

* Threat of entry due to the competition growing through acquisition or mergers.

Obviously any foreign entry decision must take the abovementioned elements into account.

* The Ansoff matrix

* Product

* Present New

* Market

Penetration

* Product

Development

* Market

Development

Diversification

Because Cadbury is introducing its brand name to a new region, in relate to the Ansoff matrix above, it can be argued that it is under market development. Although the company has come up with a few current products, it is targeting to a new market. Despite the competition against the rest (Hershey's, M&M Mars and Nestle), Cadbury has to have the bargaining power of the buyers in order to be competitive in the market. Although the company need to know that substitutes are not a major concern. Finally, to conclude that Cadbury is in the Market Development, they would have to have the bargaining power of suppliers as they are not in power position due to commodities market. And also to be aware of the cost of packaging materials as it has increased over time.

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