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Management PracticesSubmitted to Sir Ayaz Reshi

5/17/2011

Asim Javed & Amir QasimFA09-BBA-016 & FA09-BBA-050

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Table of ContentsTable of Contents .....................................................................................................................2Introduction ..............................................................................................................................3History: .....................................................................................................................................3.................................................................................................................................................. 5MISSION OF CADBURY ......................................................................................................5VISION OF CADBURY .........................................................................................................5Values of Cadbury ...................................................................................................................5.................................................................................................................................................. 6

Internal Audit ...........................................................................................................................6Culture in Cadbury ...............................................................................................................6Diversity and Opportunity ...................................................................................................6Resources: ............................................................................................................................7Marketing ............................................................................................................................7Research and Development .................................................................................................9Management .......................................................................................................................10Production or Operations ...................................................................................................11Finance ...............................................................................................................................11

External Audit ........................................................................................................................12Pest Analysis ......................................................................................................................12

Political: .................................................................................................................................12References .............................................................................................................................15

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Introduction

Cadbury plc is a British confectionery company, the industry's second-largest globally

after the combined Mars-Wrigley. Headquartered in Cadbury House in the Uxbridge

Business Park in Uxbridge, London Borough of Hillingdon, England and formerly listed

on the London Stock Exchange, Cadbury was controversially acquired by Kraft Foods in

February 2010. After integration the combined Cadbury and Kraft companies became the

largest confectionery company in the world

The company was a constant constituent of the FTSE 100 from the index's 1984 inception

until its 2010 takeover.

The firm was known as "Cadbury Schweppes plc" from 1969 until a May 2008 demerger,

in which its global confectionery business was separated from its U.S. beverage unit,

which has been renamed Dr Pepper Snapple Group.

History:

Cadbury, the global leader in the chocolate confectionery market, began in 1824 when a

young Quaker named John Cadbury opened up a shop in Birmingham. John sold coffee,

tea, drinking chocolate and cocoa at his shop. Believing that alcohol was a main cause of

poverty, John hoped his products might serve as an alternative. He also sold hops and

mustard. Like many Quakers John had high quality standards for all of his products.

By 1842 John was selling 11 kinds of cocoa and 16 kinds of drinking chocolate. Soon

Johns brother Benjamin joined the company to form Cadbury Brothers of Birmingham.

The Cadbury brothers opened an office in London and received a Royal Warrant (one of

many) as manufacturers of chocolate and cocoa to Queen Victoria in 1854. Six years later

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the brothers dissolved their partnership because of Johns failing health and the death of his

wife. They left the business to John's sons George and Richard. John devoted the rest of his

life to social work and died in 1889.

George and Richard continued to expand the product line, and by 1864, they were pulling a

profit. Cadburys Cocoa Essence, which was advertised as "absolutely pure and therefore

best," was an all-natural product made with pure cocoa butter and no starchy ingredients.

Cocoa Essence was the beginning of chocolate as we know it today. The brothers soon

moved their manufacturing operations to a larger facility four miles south of Birmingham.

The factory and area became known as Bournville.

With Cadburys continued success in chocolate, George and Richard stopped selling tea in

1873. Master confectioner Frederic Kinchelman was appointed to share his recipe and

production secrets with Cadbury workers. This resulted in Cadbury producing chocolate

covered nougats, bonbons delices, pistache, caramels, avelines and more. Cadbury

manufactured its first milk chocolate in 1897. Two years later the Bournville factory

employed 2,600 people and Cadbury was incorporated as a limited company.

In 1969 Cadbury merged with Schweppes to form Cadbury Schweppes. Schweppes was a

well-known British brand that manufactured carbonated mineral water and soft drinks. Themerged companies would go on to acquire Sunkist, Canada Dry, Typhoo Tea and more.

Schweppes Beverages was created, and the manufacture of Cadbury confectionery brands

was licensed to Hershey.

In March of 2007, Cadbury Scheweppes announced that it intends to separate its

confectionery and beverage businesses. With almost 200 years in the business, Cadbury

Schweppes will continue to prosper in the coming decades. In 2010 it is take over by the

Kraft foods.

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MISSION OF CADBURY

Our core purpose "creating brands people love" captures the spirit of what

we are trying to achieve as a business.

We collaborate and work as teams to convert products into brands. Simply

put, we spread happiness!

VISION OF CADBURY

Be the worlds BIGGEST and BEST confectionery company.

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.

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Internal Audit

Culture in Cadbury

We are a performance driven values led business

We have a clear vision, performance scorecard,priorities and sustainability commitments.

As a culture we value performance, quality, respect, integrity and responsibility.

We work as one team across geographic and functional boundaries to be the best. Wework hard and have fun along the way.

We listen to our consumers, customers, suppliers, shareowners, colleagues and

communities. Our success is sustained by understanding and responding to their needs.

We have always believed that doing good is good for business. This belief inspired our

founders, and is still at the heart of the way we work today. We see it as key to our future

success.

Diversity and Opportunity

We value diversity and value employees from varied backgrounds as they enrich our

culture and support our commercial success.

Our diversity practice helps us to attract the best people to Cadbury and allows us to reflect

the diversity of the world around us better - our consumer base and the communities in

which we operate. We aim to reflect diversity in both our workforce and in our leadershipteams. Through a culture of inclusiveness, we also aim to inspire the best in our people,

earn their trust, increase their engagement and promote pride in our company.

Our group-wide Equal Employment Opportunities & Diversity Policy emphasises that we

recruit and promote employees on the basis of their suitability for the job without

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discriminating on grounds of gender, race, ethnic or national origin, colour, religion,

marital status, age, sexual orientation, disability, social class and political association.

Resources:

Cadbury Schweppes is the largest confectionery company in the world, employing

more than 71,657 employees.

35,000 direct and indirect Suppliers

Direct operation over 60 Countries

In 2008 the company had over $9,988.3 million in overall sales.

In 2008 operating income of Cadbury is $627.51 million.

Cadbury have their manufacture plants in more than 23 countries .like United

Kingdom, United States, New Zealand, Ausralia, India etc.

Marketing

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Strengths

.

Cadbury would realize several possible advantages in going abroad. By penetrating

a foreign market the company could. Strong distribution system the Dr Pepper Snapple Group has inherited the largest

independent distribution network in the US and a reduced reliance on Coca-Cola

Enterprises and Pepsi Bottling Group for securing access to the market for its

brands

Cadbury is totally focusing on chocolate, candy, chewing gum, unique

understanding of consumer in these segments

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

Cadbury Plc (Cadbury) is one the leading global confectionery company with a

portfolio of chocolate, gum and candy brands. The company has global operations

spread across Europe, Americas, Asia Pacific and Africa

Key US soft drinks player the Dr Pepper Snapple Group has inherited a position

as a leading soft drinks player in the US, boasting high-profile brands such as those

which comprise its name and the likes of 7-Up and Schweppes.

Independent drinks business following the demerger from Cadbury Schweppes,

the sole focus of the new Dr Pepper Snapple Group is soft drinks, a status that

should allow it to better target growth in the sector.

Weaknesses

Generally, as Cadbury has a weak position in the US market, thus, need to change

its target to a different location. Besides its lack of distribution network, it also has

a small total of market share altogether. Therefore in order to market the product in

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France 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:

Consumption of chocolate products, which has been growing until 1991, remained

fairly static in 1992, reflecting a fall in demand due to the gloomy economic

situation.

Overexposed to US carbonates despite its emphasis on expanding its non-

carbonates presence, the Dr Pepper Snapple Group remains over-reliant on the

floundering US carbonates market. As such, it is exposed to fluctuations in this

marketplace.

Limited product portfolio the Dr Pepper Snapple Group has a smaller product

portfolio than its competitors, in particular The Coca-Cola Company and PepsiCo,

which provides a smaller base from which to rapidly expand and diversify its

product offer.

Geographic constraints owing to the multiple franchisee ownership of core

brands such as Schweppes, Dr Pepper and 7-Up, the Dr Pepper Snapple Group is

restricted in terms of international expansion, which given its reliance on the US, is

a definite weakness.

Cadbury role shrinks in its new guise, Cadbury Plc became a smaller-scale,

regional soft drinks player and hence, cannot rely on the same level of financial

backing and brand exposure to generate revenues as was available before.

Research and Development

Strengths

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Strong manufacturing competence, established brand name and leader in

innovation.

Advantage that it is totally focused on chocolate, candy, chewing gum, unique

understanding of consumer in these segments.

Overall, Cadbury has been successful through the new products (development) it

has to offer.

Weakness

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.

Cadbury has a reputation for new product development and creativity. However,

they remain vulnerable to the possibility that their innovation may falter over time.

Management

Strengths

The organization has strong ethical values and an ethical mission statement.

The concept of team work is very high in the firm.

Acting in a fair and equitable manner with employees and potential employees and,

as a result, earning a good reputation internally and in the communities in which we

do business

Weakness

Due to diversity in the organization there is lack of coordination among the

manager which effects the overall production of the company.

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Production or Operations

Strengths

Strong manufacturing competence as compare to its competitors.

Maintain a stable growth of a company by maximizing the use of its production

capacity and thus increase economies of scale and scope.

By using JIT product line, the inventory cost of Cadbury reduced from $670,000 to

$200,000

Weakness

Total French production of chocolate bars and confectionary, which

has increased by 24.5 per cent between 1988 and 1991, has slowed

down in more recent years, partly due to the economic slump.

Finance

Strengths

The company recorded revenues of 5,384 million (approximately $9,988.3

million) duringthe financial year ended December 2008 (FY2008), an increase of

14.6% over FY2007. Theoperating profit of the company was 388 million

(approximately $719.8 million) during FY2008, increase of 39.6% over FY2007.

The net profit was 364 million (approximately $675.3 million) inFY2008,

Keep up with the financial strength by increasing its sales and profit, indeed the

foreign market could present higher profit opportunities than the domestic products.

Weakness

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Weaker financial position following the demerger, the Dr Pepper Snapple Group

Overexposed to US carbonates despite its emphasis on expanding its non-

carbonates presence, the Dr Pepper Snapple Group remains over-reliant on thefloundering US carbonates market. As such, it is exposed to fluctuations in this

marketplace.

Finds itself operating without financial backing of what was the much larger

Cadbury Schweppes group, which could also rely on confectionery revenues.

Sales of milk chocolate bars, which account for 24 per cent by volume of total sales

of chocolate bars, decreased by 3.7 per cent.

External Audit

Pest Analysis

Political:

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Any change in laws or regulations, especially concerning international trade and food

labeling could greatly affect Cadbury

Cadbury needs to make sure none of its companies are breaking laws in the production,

and for example employing children or paying under minimum wage. Otherwise,

scandals and lawsuits would greatly hurt Cadburys reputation

Political decisions can affect Cadburys, these can be either advantages or

disadvantages, if taxes increase, therefore consumers decrease and sales of stock

decrease. However if taxes decrease the likelihood is consumers will buy more.

Laws can also change Cadburys income because if a law was brought out, that you

could only work from 9am till 5pm, factory hours would be cut short resulting in less

chocolates being produced.

Economical:

World economy relatively good at the moment, would support the launch of a new

chocolate bar

High consumer spending and low interest rates also encourage a new product

Confectionary market is growing, very high sales and still many uncovered segments

The interest rates can have an affect on Cadburys. If the interest rates were high then

Cadbury would not want to borrow as much money for expansion. Also if consumers

themselves were under pressure due to their loans they would again have less

disposable income to buy luxury items.

If the minimum wage was brought down, this would mean more money for Cadburys

but would also result in low sales from the consumers.

Social:

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Many people trying to eat healthy and cut down on confectionary goods and soft drinks

due to the current skinny is beautiful trend

Public opinion of Cadburys is high, no major concerns to stop consumers from buying

their products

Trend in snacking increase in people eating on the go (Vending machines)

Local residents with small businesses near Cadburys World would benefit from the

money that is being brought in by visitors.

More people are health conscious will read ingredient content

Technological:

Production is high due to high technology machines and factories enabling high quality

mass production

Medias such as the internet, television and the radio enable large amount of cheap

advertisement

Opportunities

Innovative uncaptured chocolate market in world ( such as sugar free chocolate

sector)

Increasing acceptance of Globalisation and better relationship with foreign

companies.

Internet is a good place to sell goods, even confectionary ones. Provides a new

consumer group with access to Cadbury and allows even larger sales due to a larger

overall consumer group

New markets. Significant opportunities exist to expand into the emerging markets

of China, and Russia, where populations are growing, consumer wealth is

increasing and demand for confectionery products is increasing.

Key to survival within the FMCG market is increasing efficiency and reducing

costs. Cadbury Fuel for Growth and cost efficiency programmers seek to bring cost

savings by:

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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.

Innovation is key driver. To respond to changes in consumer tastes and preferences

- healthier snacks with lower calories need to be developed. R&D and product

launches have led to sugar-free & center filled chewing gum varieties and Cadbury

premium indulgence treat. Low-fat, organic and natural confectionery demand

appears strong.

Threats

Worldwide - there is an increasingly demanding cost environment, particularly for

energy, transport, packaging and sugar. Global supply chain in low cost locations.

Competitive pressures from other branded suppliers (national and global).

Aggressive price and promotion activity by competitors - possible price wars in

developed markets.

Social changes - Rising obesity and consumers obsession with calories counting.

Nutrition and healthier lifestyles affecting demand for core Cadbury products.

Preference and availability of other substitutes ( sweets and deserts)

Increased international taxes on goods, especially beverages and confectionary

goods

References http://en.wikipedia.org/wiki/Cadbury

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