Exploring the Relationship between Business Strategy and Economic Performance

The provided content consists of various academic articles and online resources related to business strategy and its implications on firm performance. The papers examine the relationships between knowledge management processes, infrastructure capabilities, green supply chain management, organizational culture and HR systems, strategic management accounting, innovation-oriented business strategies, and social responsibility. Additionally, the online resources include a company's growth strategies, SMART objectives, and Porter Five Forces Model. Ansoff Matrix is also illustrated to provide an understanding of Cadbury UK Limited's growth strategies.

Business Strategy

TABLE OF CONTENTS
Introduction .....................................................................................................................................4
TASK 1 ...........................................................................................................................................4
1.1................................................................................................................................................4
1.2................................................................................................................................................5
1.3................................................................................................................................................6
TASK 2............................................................................................................................................8
2.1................................................................................................................................................8
2.2................................................................................................................................................9
2.3................................................................................................................................................9
2.4..............................................................................................................................................10
TASK 3..........................................................................................................................................10
3.1..............................................................................................................................................10
3.2..............................................................................................................................................11
TASK 4..........................................................................................................................................11
4.1..............................................................................................................................................11
4.2..............................................................................................................................................12
4.3..............................................................................................................................................13
Conclusion ....................................................................................................................................15
REFERENCE.................................................................................................................................16
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Illustration Index
Illustration 1: Ansoff Matrix of Cadbury UK Limited....................................................................7
Illustration 2: Porter Five Forces Model........................................................................................11
Illustration 3: SMART Objective...................................................................................................15
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INTRODUCTION
Cadbury UK Limited is a food product organization who is involved in chocolate
products. In this industry, Company has owned 70% of the total market share. This confectionery
corporation was founded in Birmingham, United Kingdom in 1824. Cadbury UK works as a
subsidiary of Mondelez International, Inc. Business strategy is the integral part of this
organization which has been successful in flourishing its business since last 191 years. The
significance lies in keeping a broader view of Cadbury in viewing chocolate as a category.
Company has developed by using its strengths and opportunities. Deployment of new
technologies by this brand has made Cadbury Confectionery, as the largest efficient business in
the world. Another step which was taken by Cadbury was its merger with Schweppes, which was
a part of its bigger strategy and a move to an international market (Cadbury UK Limited, 2015).
With the help of this report, the efforts are made to analyze the external environment that
affect the operations of the Cadbury's business. This organization has worked on continuous
basis since years to provide its customers with the new products. For this, Cadbury always tried
to reinvent themselves with the use of business strategies. This term 'Strategy' is defined as a
planning and execution of decisions which are made to achieve the organizational goals. The
report covers the analysis of successful implementation of business future strategies. Along with
this, roles and responsibilities of staff members of Cadbury have been discussed. Furthermore,
tactics which are used by this Company for allocation of its resources have been covered. The
last section of the report will throw light on contribution of SMART objectives which are used
by Cadbury for the implementation of strategic planning.
TASK 1
1.1
Cadbury's mission
The mission is to provide quality to customer in its products. 'A Cadbury in every one's
pocket' is their major mission. They built their goodwill with quality. They are committed to
bring continuous improvement in delivering the promise made by them.
Vision
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The vision of Cadbury is to work together in creation of brands that is admired by people.
The main purpose lies in capturing the spirit of people to achieve their business. They
corroborate and work as a team to modify their products into brand.
Goals and objectives
The goals and objectives of the Cadbury have been discussed as follows:
 To develop specialized product in smart range.
 To achieve profitability development in beverages and confectionery.
 To work on productivity, quality and development by taking technology as the main
advantage.
 To earn competitive advantage by working as a global supply chain.
 To utilizes motivated Global Science and Technology to deliver high quality of results.
Core competencies
The core competences of Cadbury UK Limited is to make use of advance technology in
creating its unique image globally. Providing the customers with consistent taste since last many
years is the biggest core competency. It has occupied a significant position in standing as a
differentiated product from its competitors such as Kitkat, Crunch, Amul Chocolate etc.
1.2
Factors taken for formulating a strategic plan at Cadbury
Cadbury is identified as a successful organization known for its effective development of
strategic decision making process. However, there is need to consider certain factors that affect
its strategic planning. These have been stated as follows:
Engagement
Participation of all the staffs working at Cadbury is taken as vital in decision making
process. In UK, there are 71,657 number of employees who are working at Cadbury. There are
unions at different management level of the organization. Any strategy planned by top leaders
are discussed with leaders of those unions. The objective is to bring more innovative ideas from
their end before implementing the plan.
Communication
Cadbury is known for strong marketing of its products. It is because of effective use of
communication methods that are used as a part of internal and external work processes. For
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example, Cadbury Milk Chocolate used certain methods of communication. With the growing
use of internet, it has well-established its website as a part of its strategic promotion methods.
Cadbury's website is best of all its other advertisements. People are attracted by new adverts and
games.
Research and Development
Cadbury has always worked since years in bringing newness to its chocolate products.
Therefore, this corporation manage and implement strategies such as digitization, innovations to
improve products etc (Montgomery, 2011). In a streamline, innovation is reflected from its tie-up
with Reliance Web World where from passing message through Reliance mobiles, moment of
delight was displayed through Daily Milk as one of the Cadbury's product.
1.3
Effectiveness of two techniques used when developing strategic business plans
Strategic business planning is achieved through the use of techniques which leverage the
effectiveness of organization. In case of Cadbury, effectiveness has been evaluated by using
following two techniques as follows:
Ansoff’s Matrix
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With the help of Ansoff Matrix tool, various strategies that support in effective decision
making of Cadbury is developed. There are four major sections on the basis of which marketing
strategy formulation of Cadbury is made.
 Through market penetration, Cadbury maintains the position of its existing products in
the current market. Launching of Cadbury's advert campaign of 'Gorilla under a glass
with half full of cream milk' thereby forming a bar is an example of advertisement that
highlights its strategy for market penetration.
 Product development is another part where Cadbury improves its product's sell in the
market (Suttle, 2015). For example, development of Cadbury's chocolate with almonds
and raisins is one innovation.
 Market development is to launch new product in the market. It accomplishes through
packaging, distributing etc (Chang and Chuang, 2011). Entering of this UK product in
Indian market in 1960 to gain market share is one example.
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I
llustration 1: Ansoff Matrix of Cadbury UK Limited
(Source: Ackermann and Audretsch, 2013)

 Diversification is a strategy to launch new products in the market. Merging of Cadbury
with the Schweppes in 1969 is an example of diversification.
BCG Matrix
There are four parts of Cadbury which are stated as follows:
 Star: Dairy Milk is the star product of the Cadbury UK Limited. It has gained good
market share in UK and in other parts of the world as well. It covers 30% of total
Cadbury's share.
 Cash Cows: This quadrant includes the products which are not effective in the market
place. For example, candy and perks (Lee, Lee and Wu, 2010).
 Dogs: This is inclusive of slow growing market products which have low market share.
For example, Cadbury has Eclairs, 5star in this category (The story, 2015).
 Question Mark: This is fast growing market products but have relatively low market
share. This includes Bournville as example.
TASK 2
2.1
Current strategic positioning by an organizational audit (using SWOT)
In order to determine strategic position of the Cadbury, SWOT analysis if one of the best
tool which has been analyzed as follows:
Strengths
 It has good global occupancy and diversity of products offering into new markets.
 It has strong recognition of brand.
 Effective manufacturing process through innovation and technology. Comprehensive digital and social media marketing
Weaknesses
 Limited portfolio of its products in comparison to competitors.
 Less recognition of market outside European nations. It has been viewed as a premium brand
Opportunities
 Availability of new markets.
 Advantageous in developing R&D resources (Cooke and Saini, 2010).
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 Opportunity to develop with partner with other brands.
Threats
 Increasing cost of supply chain
 Demand and pressure of environment factors
 Leading to social aspects such as health issues such as obesity.
2.2
Environmental audit using PESTLE
Political Changes in regulation of the UK Government affairs have direct
impact on Company's working.
For example, rise in VAT to 20% has great impact on Cadbury's
product.
Taxation has major impact.
Economical International slow down of economy have heavy impact on the
activities of Cadbury UK.
Regulations in interest rates.
Social UK population is more inclined towards chips and snacks rather
chocolates.
Drastic change in the sales figure of Cadbury.
Ban of Cadbury's ingredients affected its sales (Teece, 2010).
Technological It has good technological development.
Cost of machinery and technology incurs huge cost to them.
Legal Legal acquisition to Kraft Food creates impact on Cadbury.
Health care of customers are taken care by them.
Legal notice given to Cadbury for long employee working hours
Environmental Manufacturing units of Cadbury has environment as a major threat.
2.3
Significance of stakeholders’ analysis when formulating a new strategy
Cadbury has been successful because of its stakeholders which are integral part of its
organization. While formulating new strategies for the Company, there is need to evaluate
stakeholders (Dong-Hun, 2010). Stakeholders analysis is defined as a method to assess and
recognize the key individuals who can participate in the success of the organization. Points that
reflects the significance of stakeholders analysis when formulating strategy have been detailed as
follows:
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 To recognize people and organizations who can influence the working of Cadbury
positively or adversely (Cinquini and Tenucci, 2010).
 To formulate strategies for supporting company and any barrier that arise due to regular
operations while taking action plan.
 To see the kind of influence which have direct impact on the working of the company.
The stakeholders analysis is helpful in shaping the organization. Along with this, it is
helpful for ensuring that Cadbury is effectively able to influence its resources as well. This is the
best way to ascertain the people's reaction towards Cadbury.
2.4
New strategy based on organizational audit and stakeholders’ analysis
The another strategy which can be presented to analyze the organization is the suggested
to be Porter Five Force Model. It has been explained as follows:
Porters five forces
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Illustration 2: Porter Five Forces Model
(Source: Porter Model, 2015)

 Threat of new entrants (or barriers to entry) : It shows that profitable markets results into
high returns in order to influence new firms. It develops many competitors and thereby
decreases profitability for all enterprises in the industry.
 Threat of substitute products or services : Prevalence of goods of other company
enhances the propensity of customers to switch to options.
 Rivalry: For industries, the intensity of competitive rivalry is the major factor of the
competitiveness.
 Bargaining power of buyers : The bargaining power of customers refers to the market of
end product. It shows the ability of consumers to put the firm under pressure with respect
to price changes.
 Bargaining power of suppliers : The bargaining power of suppliers is refers to the market
of inputs. It is characterized by aspects such as as few substitutes, suppliers of raw
materials, components, labor, and services etc.
TASK 3
3.1
Analyzing the appropriateness of alternative strategies
Expansion of Cadbury is not a newer concept. Therefore, use of various strategies have
been used to implement possible methods (Chen and et.al., 2012). These have been detailed as
follows:
 Market entry Strategy: The strategy is the planned way of delivering goods and services
to a new target market. The core of this strategy is to focus on developing new market
products to fulfill customer demands of the Cadbury.
 Substantive growth strategy: Merger and acquisition are two ways for implementing this
growth. Merger of Cadbury with Schweppes is one such growth step.
 Joint venture as limited growth: This is a strategy where two or more organization came
together to share the ownership. This is to gain the competitive advantage.
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 Retrenchment: This is another action where actions are taken in delivering the efficiency
and strong competition. This process is attained with the help of three aspects which are
cost reduction strategy, revenue creation and asset reduction strategy.
3.2
Selection of new strategy
Cadbury is a growing business and therefore, it is recommended to make use of
interactive strategies in its business activities. This is a method which helps the corporation to
lead towards future market (Oltra and Luisa Flor, 2010). In a streamline, Cadbury utilizes the
same to implement cooperative strategy, strategies in hyper-competition, game theory etc.
The selection of using interactive approach theory as a part of new market theory of
Cadbury, the objective lies in gaining competitive advantage and larger market share.
Collaboration is hence, considered as one of the most vital approach which has been required to
undertaken various market strategies as a part of its achievement of its market objective
(Holbeche, 2009). The use of cooperative strategies will act as a support to meet all the
challenges that came through the way of achieving success. Therefore, it is recommendable for
Cadbury to make use of interactive approaches.
TASK 4
4.1
Roles and responsibilities of personnel in charge of implementing the strategy
The objective of CEO of Cadbury plays very significant role in the working. All the
decision are taken by the settled network of strategic influence. There are various employees
who plays different role in the corporation. These functions and operations are carried out by
linking the working of middle manager with the other levels of management. As different
position holders performs the work at different level at his part but all the individuals of SMC
inclusive of Board of Director (BOD), chief executive officer, strategic planning staff,
entrepreneur etc play a role of strategist and their roles at Cadbury are as follow:
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 Role of BOD: Despite the allocation of achieving the duty of governance, their important
role are inclusive of setting strategic directions and measuring organizational
performance of Cadbury (Zack, 2009). Along with this,defining business plans and
strategies are main strategies of corporation. It is significant to make people aware about
the Cadbury's to capabilities. Role of executives and corporate planning staff: The role of SBU working at Cadbury is
major in its strategic management. They eloquent the vision and act as a mortal. It is at
their role to review and monitor all the strategic activities It undertakes the job role of
meeting out the evaluation strategies too. The responsibilities of employees is to act as a
supporting function in strategic planning. Role of consultants: They are generally external agents appointed by the Cadbury. With
their consultancy, aspects such as cost effectiveness, opinions and services are met at
Cadbury (Astrachan, 2010).
 Person related factor: Taking decision in the strategic planning of the Cadbury is very
crucial. Factors that are considered are such as intelligence, cognitive factor. Value
system etc. is also very crucial while strategist.
4.2
Resource requirements to implement the new strategy
Resource planning is defined as the process of internal analysis of a company. With
respect to Cadbury, it is all about allocation of resources effectively and efficiently (Reinhardt
and Stavins, 2010). Some main aspects in the similar regards are planned in to formulate its
resources implementation strategy are stated as follows: Finance Resources: Cadbury is a company that is blessed with large reserve. It relay on
its abilities and capabilities to build an extensive international infrastructure. This is
required to meet the diversity as a crucial aspect. It is considered as strategic competitive
advantage that support entrants of new aspect in the market. Organizational Resources: With excellent growth and success, Cadbury adopted strategic
business units (SBU) form of organizational structure (Loeppke and et.al., 2009). It takes
into account three levels as corporate headquarter, SBU and SBU divisions.
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 Physical Resources: Despite an extensive business network at domestic as well as
international level, Cadbury is investing heavily in infrastructure to compete well with
the growing need and demand. Human Management Resources: Cadbury applies training facilities for its manpower's
growth. Developing them with superior knowledge and skills are their major areas.
 Technological resources: Cadbury is pioneer in many areas that is its competitive
advantage (Werbach, 2011). Also, they are highly updated in providing technologically
better products than its competitors. Their innovation practices and high quality products
are their major reasons of sales and revenue.
4.3
Contribution of SMART targets to the achievement of the strategy implementation
SMART objectives enable one to think about and acknowledge elements of evaluation
plans and measurement. These are indicators and performance measures techniques. Cadbury
uses them to measure evidence of changes made or growth achieved. With this objective, type of
data required can be evaluated and SMART objectives measure it.
Illustration 3: SMART Objective
(Source: Stephens, 2011)
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 Specific: The objectives where there is identification of changes are there in order to
implement the action plan is stated. In order to exercise the same,effective support and
coordination of partners and the objective specified clearly are objectives simple. In case
of the Cadbury Company where technology updating is very core in its all its chocolate
products, there is need for the company to adapt with the changes (Augier and Teece,
2009). It is at top level management part to laid specifically objectives so that the change
becomes ease for others for adaptation. Measurable: An ability of determine the change in numbers or rate of the concerned work
done or outcome of obtained result (Sim and Teoh, 2011). It refer to the tool for
collecting data is to be identified and that collection of data is adaptable for your partners.
It is about accuracy by which work as performed. Activities of Cadbury are stable with
relation products manufactured or sold, rise or fall in price, market ratio etc. For example,
by one year as 20% increase in profit margins or it should double its number of
chocolates manufacturing. Attainable: The work structure is planned in proposed time is very crucial. It is because
it helps the company to accomplish work with control and coordination. The objectives
that are laid down by Cadbury should be feasible with the available resources. Cadbury
creates the amount of tool that evaluates the percentage change in desired and actual
work done. Relevant: It refers to the relationship between overall objectives of the company laid
down and goals standard (Chow and Liu, 2009). It is very important for Cadbury
Company to stay technologically updated for the manufacturing of its Chocolate and
other food products.
 Time line: It is crucial to decide time line for work to be done and for the same a specific
and reasonable time frame is incorporated. In order to reap more advantages of SMART
objectives, Cadbury make use of specific time frames in terms of division of activities in
weeks, months and years.
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CONCLUSION
In a nutshell, it can be concluded that Cadbury do formulation and implementation of its
strategies so well that it has been able to attract consumers through its taste and experience.
Cadbury as one of the organizations who work in its defined framework have been successful in
defined objectives. They plan its strategy to make others believe about its work and a unique
market position. Strategies act as a base provider for every organization. With the help of these
strategies, the organization can focus on its operations in a broader manner. This is to occupy a
position of successful reputation and goodwill over its other competitors in global market.
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Online
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<https://www.cadbury.co.uk/>. [Accessed on 18 December 2015].
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[Accessed on 18 December 2015].
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