Cadbury: Business and Business Environment Analysis

This comprehensive analysis delves into the business environment of Cadbury, a global confectionery giant. It explores the interrelationship between organizational functions and their impact on structure, examines the influence of macro-environmental factors through a PESTLE analysis, and conducts a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The study highlights how Cadbury's internal and external factors interact, providing insights into its strategic positioning and future prospects.

BUSINESS AND BUSINESS ENVIRONMENT - Cadbury

CONTENTS
INTRODUCTION...........................................................................................................................................2
LO1 PPT PRESENTATION..............................................................................................................................3
P1, P2 & M1.............................................................................................................................................3
LO2..............................................................................................................................................................4
P3 EXPLAIN THE RELATIONSHIP BETWEEN DIFFERENT ORGANISATIONAL FUNCTIONS AND HOW THEY
LINK TO ORGANIZATIONAL OBJECTIVES AND STRUCTURE......................................................................4
M2 ANALYZE THE ADVANTAGES AND DISADVANTAGES OF INTERRELATIONSHIP BETWEEN
ORGANISATIONAL FUNCTIONS AND THE IMPACT THAT CAN HAVE UPON ORGANIZATIONAL
STRUCTURE FOR CADBURY......................................................................................................................7
LO3..............................................................................................................................................................8
P4 IDENTIFYING THE POSITIVE AND NEGATIVE IMPACTS OF THE MACRO ENVIRONMENT HAS UPON
BUSINESS OPERATIONS FOR CADBURY....................................................................................................8
M3 APPLYING PESTLE MODEL FOR CADBURY........................................................................................11
LO4............................................................................................................................................................12
P5 CONDUCTING INTERNAL AND EXTERNAL ANALYSIS OF CADBURY FOR IDENTIFYING STRENGTHS
AND WEAKNESSES.................................................................................................................................12
P6 EXPLAINING THE WAY IN WHICH STRENGTHS AND WEAKNESS OF CADBURY INTERRELATE WITH
THE EXTERNAL MACRO FACTORS..........................................................................................................14
CONCLUSION.............................................................................................................................................16
REFERENCES..............................................................................................................................................17
1

INTRODUCTION
In the present competitive environment, it is essential for Organizations to give emphasis not
only to the external business environment but to the internal business environment. As a
Business Analyst of Cadbury Organization, the environmental factors that affect the business
environment of this organization will be effectively analyzed and explained. The assignment will
analyze different types of organizations based on their size and classification for understanding
the legal structure. In the later sections of the assignment interrelationship between different
types of organizations and how it is linked to the structure will be explained followed by
conducting the SWOT and Pestle Analysis of the chosen organization. At last some conclusion
and recommendations will be derived based on the overall discussion of the assignment.
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LO1 PPT PRESENTATION
P1, P2 & M1
3

LO2
P3 EXPLAIN THE RELATIONSHIP BETWEEN DIFFERENT ORGANISATIONAL
FUNCTIONS AND HOW THEY LINK TO ORGANIZATIONAL OBJECTIVES AND
STRUCTURE
There are many types of Organizational functions that need to be executed and worked
together in order to achieve the required aims and objectives of the organization. The
organizational departments of Cadbury that collaborate and work gather in order to perform
business functions are mentioned below (Nd’ungu, 2013).
 Sales and Marketing
The products manufactured by Cadbury need to be placed in front of the customers. Therefore
it is essential for the marketers of Cadbury to promote company’s products so that it can be
consumed by the customers. The more is the efficiency of the marketing team the more sales
company will achieve with the sales of its products (Nordberg, 2017).
 Human Resource
The main purpose of the Human resource department is to recruit fresh talent for handling the
key responsibilities of the organization's functions. Moreover, it is the duty of the HR
department to hire skilled employees who have the capability of handling the functions of a
particular department of the company.
 Finance
The financial department of Cadbury has duties to plan the financial budget of the company,
estimate the cost of resources, controlling the expenditures of the company. Some additional
functions include debt, patrolling, receipting and managing the investment (Nordberg, 2017).
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 Operations and Production
The duty of the production department is to utilize the resource and produce quality products
that meet the demand of the consumers. Cadbury manufactures chocolate milk products and
sells it to the customers all over the globe (Kolvenbach, 2013).
 Administration
The administrative department of Cadbury handles customer's queries, share information with
the customers, manage and distribute information within the office etc. The primary function is
to answer phone calls, take memos and greet the clients or customers in the business (Lam,
2011).
All the above department of Cadbury work together in collaboration as each department is
dependent on the other department and all department combines together to form a complete
organization. For example, the marketing department of the Cadbury conducts market research
through which they analyze the need and demand of the customers related to the products and
services (Lam, 2011). The marketing head then communicates it to the production department
as to what type of products needs to be products in order to meet the customer's demand. The
organizational objective of Cadbury is to strive for growth and increase the sales of the
company by meeting customer demands. It is only possible through the collaborative effort of
all the departments and if any of this department fails then it negatively affects the
performance of the company.
5

Figure 1: Organization Structure of Cadbury
Source: [Marsh and McLoughlin, 2010]
The organization structure is very important for all organizations as it helps in achieving the
aims and objectives of the organization in an effective and efficient manner. The
interrelationship of the different department can be clearly depicted in the organization chart
depicted above. There are many types of organizational structures like the divisional structure,
matrix structure and the functional structure. The divisional structure depicted above explains
that General Manager is at the top of the Hierarchy in the organization and all the managers of
the respective department report to the general manager via a link through a secretary.
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M2 ANALYZE THE ADVANTAGES AND DISADVANTAGES OF
INTERRELATIONSHIP BETWEEN ORGANISATIONAL FUNCTIONS AND THE
IMPACT THAT CAN HAVE UPON ORGANIZATIONAL STRUCTURE FOR CADBURY
ADVANTAGES OF INTERRELATIONSHIP
Interrelationship in the organization is highly advantageous as it helps in achieving the business
objectives. Organizations are grouped in different departments as one department is depended
on another. When department works in collaboration then the efficiency of work gets increased
by communication (Müller, et al. 2013). It also helps in providing better customer service to the
customers as one department supports the other department.
DISADVANTAGES OF INTERRELATIONSHIP
The company can suffer the loss of revenue if departments do not collaborate and work in
conjunction in order to achieve the organizational objectives. For example, if the sales
department loses business because of the manufacturing department as it was unaware of the
increase in product demands due to lack of communication between the departments then
company suffers a loss of revenue (Bryson, 2018). Hence it departments have effective
interrelationship then they meet the sales targets and sales projections.
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LO3
P4 IDENTIFYING THE POSITIVE AND NEGATIVE IMPACTS OF THE MACRO
ENVIRONMENT HAS UPON BUSINESS OPERATIONS FOR CADBURY
Cadbury is known for its quality products in the international market and there are millions of
customers that consume products manufactured by Cadbury and company is continuously
expanding its business in unchartered territories for growth (Harrison, 2013). The
macroeconomic factors are known as the external factors that affect the firm's performance is
not dealt with carefully as explained below.
PESTLE ANALYSIS OF CADBURY
POLITICAL
The Cadbury operations are likely to get affected due to the change of government from the
labour party to the liberal party in the context of the UK (Harrison, 2013). Other factors include
taxation and regulations that can affect the investments decisions of Cadbury company, for
example, the Value added tax has risen to approximately 2.5% that has raised the price of
Cadbury products in local and foreign markets. Similarly rise in inflation and the impact of Brexit
is also likely to affect the profit margins of Cadbury to a larger extent.
ECONOMIC
The global economic downturn is likely to affect all companies including Cadbury and it is going
to affect its business expansion plans in the near future. The decline in the disposable income of
the consumers will compel Cadbury to lower the price of its chocolate products thereby
affecting the profit margins of the company (Newton, 2014).
SOCIAL
Cases of obesity among children are likely to affect the company and it is important for Cadbury
to make products that are less sugary and can be consumed by children on a large scale. Many
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nutritionists have given suggestions to people as to not consume the dairy products
manufactured by Cadbury because of high fatty ingredients that cause obesity among children.
This is becoming a serious issue for Cadbury as people are becoming more health conscious and
it is essential for the company to come with different products that are less sugary and are
healthy (Newton, 2014).
TECHNOLOGICAL
With the help of technological advancements, Cadbury has improved its production and
operational capabilities over the years. It is seen that packaging of its dairy products have
improved and the introduction of new brew machines for blending coffee has also improved its
production and packing process (Pitt and Koufopoulos, 2012).
LEGAL
The legal issues that affect Cadbury are mostly the government regulation and changes in the
health policies. It is essential for Cadbury to develop quality products that are healthy and meet
the demand of the consumers. The company also fails to provide the exact details of the
product ingredients to the customers and other legal issues include sugar tax and food scandals
in the past.
ENVIRONMENTAL
The amount of packaging that Cadbury uses is a major concern as polythene is harmful to the
environment. But Cadbury has taken some positive measures for minimizing the use of
polythene as a step towards environment safety (Pitt and Koufopoulos, 2012). Moreover, the
company has reduced the amount of Easter eggs and the production of its organic black and
green chocolate.
POSITIVE IMPACTS
There are many positive impacts because of the microenvironment in Cadbury such as
improvement in the infrastructure facilities and use of technological advancements for
manufacturing quality products for the customers (Kew and Stredwick, 2017). With the help of
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Pestle, Analysis Company is able to strategically plan its business requirements for achieving
growth and productivity in the business (Kew and Stredwick, 2017).
NEGATIVE IMPACTS
Cadbury has to reduce the price of its products because of increase in competition from
companies like Nestle in the market. The company is losing its customer base because of the
legal issues like not adhering to guidelines of healthy products. The company is facing issues for
environment protection for making use of polythene products for product packaging and loss of
revenue due to high investment technology for new product development.
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M3 APPLYING PESTLE MODEL FOR CADBURY
It is essential for Cadbury to use the principles of Pestle Analysis in order to survive in the
competitive environment. The company need to plan the strategies for making products which
are low in calorie and do not affect the health of children and have a minimum risk for obesity.
It is essential for all the departments of Cadbury to work in coordination so that aims and
objectives of the organization can be achieved (Bradley, 2011).
It is essential for Cadbury to recruit skilled staff that can achieve the vision and mission of the
organization. The HR department must conduct events and programs for its employees so that
their skills are improved for performing the operational functions more effectively.
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LO4
P5 CONDUCTING INTERNAL AND EXTERNAL ANALYSIS OF CADBURY FOR
IDENTIFYING STRENGTHS AND WEAKNESSES
Cadbury as a brand has evolved over the years and serves the world. The internal analysis is
being done for analyzing the aspects that impact the working of the firm at the organizational
level. The SWOT analysis is conducted below-
Strengths
 World leader- The brand has become the world leader in the production and sales of
chocolates with having a wide channel for distribution and manufacturing presence in
more than 200 nations (Kazemi and Esmaeili, 2010).
 Diverse product range- The brand sells a diverse range of products under various Kraft
subsidiaries like Cadbury UK Holdings Limited and Cadbury Four LLP etc (Cadbury, 2018).
 Brand equity- The products of Cadbury have good brand loyalty and follow R&D
approaches for innovating products as a result of effective marketing and therefore
make a good profit from the premium products.
 Brand positioning- Some of the products of Cadbury are positioned for gifting purposes
and some others for a specific occasion; this makes the brand differentiate from the
other brands (Cadbury, 2018).
 The company is allied with a strong ethical approach and has strengthened its brand
image as socially responsible and caring for the environmental issues. The firm doe
strong advertising which has helped in the creation of talking points for the consumers
and thus strengthened the brand image.
Weaknesses
 The firm has a high dependency on the confectionary and the beverages market
 The brand faced some of the controversies due to worms found in its products which
resulted in product call which hampered the image of Cadbury (Vaid, 2018)
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 The quality control is weak which has caused some loyal consumers to withdraw
themselves
Opportunities
 The company has the opportunity to witness a rise in the market share at the global
level as a result of the expansion in the emerging markets like Russia, China etc.
 There is also an opportunity for the firm to penetrate in the USA as the parent company
of Cadbury, Mondelez has a good access to the USA market
 The firm has a good chance to lower the costs at places where labours expenses are less
and the firm can avail some profit from economies of scale which is provided by
Mondelez
 The company has an opportunity to increase sustainability that will provide aid in the
strengthening of the image of the firm and to emerge as a caring firm with strong
connectivity and concern for society within which it works (West, 2014).
Threats
 Increase in the prices of transport packaging, fuel etc. and the cost of distribution has
increased. This rise in the costs poses a threat to the firm for the decline in sales
 The change in perspectives of consumers related to health consciousness is on the boon
which is a threat to the company
 The adoption of aggressive pricing strategies and other promotional activities by the
competitors poses a danger to Cadbury for loss in the customers and therefore the
decrease in market share (Nieburg, 2016)
 The boon in inflation can result into the decrease in sales of Cadbury
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P6 EXPLAINING THE WAY IN WHICH STRENGTHS AND WEAKNESS OF
CADBURY INTERRELATE WITH THE EXTERNAL MACRO FACTORS
The external macro factors such as the economic environment, the political upfront of a
country. Here the UK, the legal and technological changes and the environmental and social
aspects have an interrelation with the firm’s, here Cadbury’s strengths and weaknesses.
Interrelationship with the strengths of Cadbury
The strength of Cadbury of a huge range of products has helped the firm to establish a good
customer base along with the support of stable economic condition of UK. The stability in the
economy also leads the firm to expand in the other markets and penetrate in the existing ones,
therefore, becoming the strength of the firm after expansion (Bradley, 2015). The rise in the
technological innovation has led the firm to compete with the major rivals thus reducing some
of the impacts of threat. The wide portfolio and brand equity of the products have been
possible by the change in perspectives of the people and the brand being liked by them thus the
social factor and the strength of the firm interrelate with each other (Anjum, 2013). The socio-
cultural environment in the UK has given the firm strength to introduce innovative products
thus enriching the brand image.
Interrelationship with the weaknesses of Cadbury
As a result of the Brexit, the firm is facing changes in its prices in the transport, getting raw
materials etc. which has become one of the weaknesses of the firm. The economy at the global
scale is being targeted on the whole which has led to less focus on the economy of the UK in
particular and thus the rise the prices of the raw materials and other goods has become a major
problem (Sinha, 2012). The issue of poor quality control by the brand is directly related to the
technological changes in the country as the technology is not efficiently adopted by the
company and utilized in an appropriate manner. The change in legal policies of the UK has
impacted the firm and thus the weakness of the firm of worms being found in its products have
caused the firm to call back products from the market.
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Thus, the relationship between the strengths and the weak points of the company, Cadbury
with the external macro factors impacting the firm has been well understood.
15

CONCLUSION
The ability of a business to sustain itself in the highly competitive environment depends upon its
macro and micro business environment and the operations conducted within the company. The
business analyst of Cadbury has investigated the various size, scope and types of the
organizations through a power point presentation. Moreover, an essay has been written for
understating the relation of functions in the organization and their linkage with the structure of
the organization. Another comprehensive essay has been written where the pestle analysis of
Cadbury has been done where the influence of the macro environment in both positive and
negative aspects on the operations of Cadbury have been demonstrated followed by analyzing
the strengths, opportunities, weakness and threats of the firm and comprehending their
relation with the macro factors.
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