Company Overview

Cadbury is a leading global confectionery company with its product range in chocolate, gum and candy brands. Their brands include Cadbury, Trident and Halls. It started way back in 1824 when John Cadbury opened a shop in Birmingham selling cocoa and chocolate. Since then they expanded their business globally. On 7 May 2008, the separation of their confectionery and Americas Beverages businesses was completed creating Cadbury plc with a vision to be the world's BIGGEST and BEST confectionery company.

Facts and figures

i Products range in three kinds of confectionery: chocolate, gum and candy. i Operations in over 60 countries. i Its nearly 200 years old company. i 35,000 direct and indirect suppliers. i Work force of around 50,000 people. i Every day millions of people around the world enjoy their brands.

Their Business
i With workforce of 45,000 employees and their business in over 60 countries, Cadbury is a large and complex organization. i 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.

Business units
Its operations are split into seven business units, that are: i Britain and Ireland, i Middle East and Africa (MEA), i North America, i South America, i Europe, i Asia, and i Pacific

Functions In conjunction with the seven business units, they have seven global functions. Category-led functions: i Commercial i Science & Technology i Supply Chain Corporate functions: i Human Resources and Corporate Affairs i Finance and Information Technology i Legal and Secretariat i Strategy

Marketplace of Cadbury

Cadbury operates in the global confectionery market which is large, growing and has attractive dynamics. The global confectionery market is the worlds four largest packaged food markets. It represents 9% of that market, and has a value at retail of US$141 billion. In that Chocolate is the largest category and accounts for over half of the global confectionery market by value. Also Gum is the fastest growing confectionery category.

Focus Brands
They are investing in their most advantaged brands like Cadbury Dairy Milk, Trident, Halls, Green & Blacks, The Natural Confectionery Co., Creme Egg, Eclairs, Flake, Dentyne, Clorets, Hollywood, Stimorol and Bubbaloo. Their competitive advantage lies in being globally strong across all three confectionery categories. Being market leaders in one or two categories, they 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 them to launch successfully into gum. Similarly in India, theyve expanded into the bubblegum business. And in the USA, theyve added chocolate to their gum and candy business.

Categories
Confectionery has three categories: Chocolate, Candy and Gum. It have a total confectionery model with strong positions in all three categories.

Category dynamics vary

The confectionery market is a relatively fragmented market. Even after the merger of Mars and Wrigley, the top five players account for only 42% of the market. Chocolate: It 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. It 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.

SWOT Analysis of R&D in Cadbury:

Strengths:
i

Weaknesses: Dependence on the confectionery and beverage market, whereas other competitors e.g. Nestle have a more diverse product portfolio. i Competitors have greater international experience while Cadbury been strong in Europe only. New to the US, possible lack of understanding of the new emerging markets compared to competitors.
i

Cadbury is the largest global confectionery supplier, with 9.9% of global market share. i High financial strength. i Strong manufacturing competence, with good brand name and leader in innovation. i It is totally focused on chocolate, candy, chewing gum, unique understanding of consumer in these segments.

Opportunities:
i

Threats:
i

Significant opportunities to expand into the emerging markets of China, Russia, India, with growing populations and increasing consumers wealth. i 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. i Increasing efficiency to survival within the FMCG market by reducing costs. It can be achieved by: 1. Moving production to low cost countries, where raw materials and labor is cheaper.2. Reduce internal costs - supply chain efficiency, global sourcing and procurement, and wise investment in R&D. i Invest in R n D for Innovation. To respond to changes in consumer tastes and preferences - healthier snacks with lower calories need to be developed.

Worldwide - there is an increasingly demanding cost environment, particularly for energy, transport, packaging and sugar. Global supply chain in low cost locations. i Competitive pressures from other branded suppliers (national and global). Aggressive price wars and promotion activity by competitors. i Social changes - Rising obesity and consumers obsession with calories counting. Demand for more Nutrition and healthier lifestyles affecting demand for core Cadbury products.

BCG MATRIX Cadbury Indias position in BCG Matrix

Chocolate & Confectionery Segment

Cadbury India Pvt Ltd

Gems

5Star Eclairs

Halls Dairy Milk Bubbalo chewing gum

Celebrations

Perk

Cadbury with Dairy Milk, Perk, Gems, 5 Star, Celebrations, Bytes, Dairy Milk Eclairs, Eclairs Crunch, Mr. Pops and Halls brands is a key player in the chocolate, eclairs, lollipops, and mints segments. With High growth and High market share, it is the leader in chocolate and confectionary market.

Beverages & Snacks Segment

Bournvita

Bytes

Cadbury is a key player in the segment with Cadbury Bournvita and Cadbury Bournvita 5 Star Magic. However Cadbury bytes has low market share still. Growth is feasible but hence efforts can be made to increase its market share.