Strategic Management: Industry Analysis, Business Environment Analysis, and Competitive Advantages of Cadbury

This report provides an analysis of the strategic management of Cadbury, a renowned multinational confectionery company. It includes an industry analysis using Porter's five forces model, a business environment analysis using PESTLE analysis, and an evaluation of the company's competitive advantages. The report also discusses the strengths, weaknesses, opportunities, and threats of Cadbury and explores the strategies used by the company to sustain and grow in the confectionery industry.

Strategic management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Industry analysis.....................................................................................................................3
Business Environment analysis..............................................................................................4
Capabilities or competitive Advantages of business..............................................................7
REFLECTION.................................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management is term that explains the way various strategies are used by
organization to cope up with situation and circumstances so that it can grow and sustain business
for longer time frame. There are drastic or numerous changes in external environment such as
taste, preferences of people, technologies and government policies so company need to adapt
them to retained its profit margin. This report is based on one of the renowned company named
as Cadbury that is British multinational confectionery founded in 1824 having operation across
worldwide. It also included models related to industry analysis, business environment analysis
and competitive advantages such porter five force, Pestle analysis and SWOT of Cadbury. At
last, a critical reflection is made on experienced and future development needs.
Industry analysis
For the purpose of analysing the industry in which Cadbury is operating, the Porter's five
force model will be used which will help in determining the attractiveness of the industry. It can
be evaluated that porter five forces is an model that used for effective analysis of industry by
understanding key factors that frame or shape particular industry. All five forced helps in
understanding existing competition, potential threat and power of consumer as well as suppliers.
One of the drawbacks of using porter five force is that it’s finding are related to short term only
at the same time it is tendency to use to study about particular company rather than broad
industry. So, it is good model for industry analysis as compared to other models. It is composed
of 5 key components which are stated below.
Entry of competitors: The threat of new entrants is low which is because there are
already existing well-established companies such as nestle, Hershey's, Ferrero etc. giving tough
competition to each other. These organizations have grabbed the confectionery market. This
results into making the entry of new company very hard to attract customers and provide with the
substitute goods.
Threat of substitutes: The major threat to the Cadbury company is the supermarket own
brands which majorly tends to copycat the most popular chocolates and provide at their own
shelves at a lower price. There is large substitute of confectionery products like chips, beverages
etc. but in case of chocolates, the score is high in comparison to substitutes as they can be
preserved easily. The major factor that would affect the production of the company is finding a
right place and meeting up with the requirement of the entry along with the foreign policy that

might have an impact over the operation. Thus, Cadbury is having moderate level of threat of
substitute products.
Bargaining power of buyers: The buyers of Cadbury are scattered all across the world
which are billion in numbers. The price is never being the question but the increase in the
number of competitors offering the similar products at the lower price might result into
influencing the customer loyalty. Along with that, there is no switching cost for the buyers. Thus,
the bargaining power of buyers is moderate to high, therefore, Cadbury is required to be very
much precautious in undertaking decisions pertaining to the product price along with keeping the
customers satisfied.
Bargaining power of suppliers: Cadbury is known for maintaining a positive and
influential relationship with it suppliers all across the globe. The company has a high purchasing
power and its suppliers provide product which are far from unique, this has resulted into the
company having higher bargaining power in comparison to its suppliers as this industry is
majorly dependent upon the agro supply chain. The company can take advantage of the
economies of scale and buy the raw material at a lower price and higher in volume as against any
medium size organization. Therefore, the bargaining power of the suppliers of the company is
low which is beneficial for Cadbury.
Rivalry among the existing players: There are many businesses which are competing
against the Cadbury company and are even planning to surpass the Cadbury and its supremacy.
Competitors are developing their products along with implementation of the innovative ideas
which has resulted into making competition even more harder. Competitors like Nestle, Ferrero
and so forth are the major rivals of the company which are also the well-established
confectionery brands and just like Cadbury are also creating new and diverse range of products.
The rivalry will be very strong with these companies as the products of these companies will be
sold from the same shop as that of Cadbury and all these products are similar in nature.
Therefore, the rivalry is very strong among the existing market players having a huge influence
over the company's position.
Business Environment analysis
A Pestle analysis is the marketing tool which is used by the businesses in understanding
the business environment which might have an influence over the business functioning. Pestle
analysis is an effective tool that helps in understanding external factors such as policies of

government, economic condition, technological and social factor has impact on growth and
sustainability of enterprise. All these factors help management in effectively planning key
strategies that can be fruitful for enterprise as well as business operation. It can be critically
evaluated that it is too time consuming to identify impact of each factor on growth and strategy
of firm. The business environment analysis of Cadbury is provided below.
Political factors: The government regulations keeps on changing and Cadbury requires to
change its policies as well in respect to change in the government policies. These regulations will
be having a great impact over the processes such as recruitment, training and development,
employer and employee rights etc. The factories in UK have employed nearly 3000 workers but
in respect to the skilled labour the employment is limited which would have an impact over the
future. Also, a rise in the tax rates would impact the prices of the chocolate leading to reduction
in the revenue. Apart from the tax policies, other factors like trade policies, restriction on the
import and export would also affect the revenue of the company. It might consequently impact
the production process and price. Therefore, this factor is having a high impact over Cadbury.
Economic factors: This factor is also having huge influence over the functioning of the
organization. For instance, if the unemployment rate is very high in UK, this will cause many
people or the consumers to not buy the product as the unemployment will affect the purchasing
power of the consumers. In the another situation, if the interest rate increases, this will turnout to
be very expensive for the company in meeting with its finance requirements or making an
investment into the project. Along with that an increase in tax rate would result into charging
more on the products in order to generate profits. But on the other hand, charging more will
cause the customers not willing to pay for the product.
Social factors: The world is moving towards a healthy life as people have become health
conscious in respect to what they eat. Cadbury has observed this factor and has launched the new
idea stating well-being foods. The core objective behind this is that people enjoy their snacks
along with the Cadbury chocolate without any issue or fear or guilt and helping them in staying
healthy. The future goals of the organization is to support the people in staying fit and healthy
through the way of expanding the existing product portfolio along with achieving its goal of
increasing its growth in comparison to its base rate. The organization is also willing to renovate
and enhance the nutrition and the healthy ingredients in its high selling products or the brands
and continuously inspiring the costumers to snack mindfully. The increasing health awareness

has prompted Cadbury to launch small bars with the reduction in the sugar content by looking at
the emerging needs and preferences of the customers. Thus, by undertaking such steps, Cadbury
has helped in ensuring that it meets with all the needs and expectations of the customers, along
with reducing the intervention of government or future lawsuits which might occur as a result to
manufacturing unhealthy food products. Thus, this factor is having less impact over the business
operation of Cadbury.
Technological factors: The rapidly changing and the up-gradation in the technology has
helped Cadbury in improving and enhancing the quality of its products. The development
projects such as the orange twirl in UK is the outcome of the continuous research undertaken by
Cadbury. The technologies which are implemented in the factories for producing goods has
helped the organization in timely meeting up with the increasing demand of its products,
reducing the cost of manufacturing and maintaining the existing price of the product by
cancelling the adverse impact of the increasing cost pertaining to the raw material. Cadbury
makes use of the social networking sites such as Facebook and twitter as one of the form of
connecting with the customers along with effectively communicating with the users. This assists
Cadbury in reinstating the relationship between the customers and the organization through the
way of increasing the awareness in regard to the products of the company. Along with that,
Cadbury has an ample opportunity for venturing into this segment as it is having a good
prospects. This would result into enhancing the brand value and providing competitive edge over
its competitors in the market place. Thus, with the use of AI will help in increasing the
communication and interaction with its customers and consequently leading to enhancement of
the brand value.
Legal factors: There are cases where many small and local firms tried to sell out their
products by making use of the company's logo and symbols in order to sell out the local products
which is illegal. This makes it very important for Cadbury in maintaining the strict and agile
regulations in respect to the infringement of the intellectual property rights (IPR) and the
copyrights. The legal regulation all over the world requires the producers to make the contents
visible on the package of the good. But these regulations keeps on changing and varies from one
region to another. This legal issue is taken as very serious problem in UK in comparison to other
countries like Africa, India. Therefore, it is important for the company to keep an eye on these
changing regulations in order to operate smoothly and effectively. The major concern in respect

to obesity can further rise the stringency pertaining to the laws in regard to sugar tax, mainly in
UK. Cadbury is looking for expansion in other regions as well, for which it needs to account for
the all the existing patents and the regulations which are existing in that region. Also, when a
new plant is to build up, the company is required to match up with all the environmental,
manufacturing along with the employment laws. Thus, this factor has a high impact over
Cadbury.
Environmental factors: Cadbury is seemed to have remained in front, for fighting
against the changing climate conditions. The company has been working towards reducing the
carbon emission from its business operation and along with that, it has planned out some
sustainable activities in order to accomplish its targets on time. Through the program named,
cocoa life, Cadbury has been working towards supporting the farmers all across the globe with
the objective of gaining environmental perspective on the cocoa farming. Along with that, is the
wheat project in which company is focused on reducing the usage of pesticides by 20%. Along
with that, company is working on procuring 100% cage free eggs by the end of 2025. Ahead of
its time, company is managing to make a move that will create difference to the environment
through its various activities.
Capabilities or competitive Advantages of business
SWOT analysis is a strategic planning tool that helps in identifying key areas in which
strength, weakness, threat and opportunities of business lies so that management can formulate
better strategies so that company can gain competitive advantages. Cadbury is one of the leading
brand in food and beverages that manufacture tasty, delicious chocolates to meet customers'
expectancy (Shtal and et.al., 2018). Therefore, SWOT analysis model is used to understand the
core capabilities or resources that have contributed in growth and expansion of business of
Cadbury in confectionery industry. Such as:
Strength: Cadbury have strong brand image in minds and hearts of customers that helps
company to easily motivates individual to be part of organizations for satisfaction of their
respective requirements. It has huge strength of employees and business operation across
different countries that help company in earning huge profit margin and market share. Company
have set its image in mind of customers as most trusted and premium brand in UK, Australia,
India and many more countries. Therefore, it can be stated that Cadbury is famous for its
products or tasty, wide varieties of chocolate or its strength lies in its products and services

delivered to end customers. Company have invested huge amount of research and development
department to know about existing needs and preference of customers (Bush, SWOT Analysis of
Cadbury, 2019). Cadbury always innovates or add new ingredients in chocolates so that it can
cater needs of existing as well as new customers ranges that are living in different parts of world.
Company have used best marketing campaign or advertisement medium to generate awareness
among number of individual that have lead in growth of business.
Weakness: Despite of so many strength of Cadbury there are key areas in which firm
lacks such as limited products range and recall of products. As it have been founded that there
are regular recall of Cadbury products on occasion season that negatively impact on satisfaction
level of customers. At the same time it has been criticized by number of business analyst that
Cadbury manufactured its limited ranges despite varieties of products in confectionery (Quezada
and et.al., 2019). In other words, company have not expanded its business operation to other
kinds such as food to more expand its business operation. Thus, company needs to overcome its
weakness in order to sustain in market for longer time frame and achieve its objectives.
Opportunities: There are numerous opportunities for Cadbury to enjoy huge profit
margin such as new emerging market, use of digital media or innovative technologies to satisfy
needs of customers. Growing consumer income, demand of Cadbury products in emerging
market is the biggest opportunities that it can use to attained its objectives. Company by
expanding its operation in global market such as East Asia and Africa can earn more revenue and
profit margin. Another opportunities for Cadbury is that it can add new products ranges or
diversify its business operation as it have strong brand image that will helps in pursuing
customers to choose products of it as compared to others (Cadbury SWOT Analysis,
Competitors, Segmentation, Target Market, Positioning & USP, 2020). There are rapid changes
and innovation in technologies, so Cadbury by making use of digital media, internet or
increasing its presence online can generate awareness among large number of individuals.
Therefore, company by making use of its strengths (such as strong brand image, qualitative
products) is able to optimum utilize available opportunities and gain competitive advantages in
confectionery.
Threats: Cadbury is facing threat of increasing competition level in global market, sugar
tax implemented by most of the countries and changing external environment. It has been
analysed that number of countries have implemented sugar tax thus it increased overall cost of

company and reduced customers preference to choose products. Another threat is changes in
taste and preference of people, as now- a days people are becoming more and more concerned
about their health because of increasing diseases. It has been identified that eating more sugar is
not good for health thus some people are trying to avoid eating chocolates (Kudriavtceva, 2019).
Thirdly, there are number of competitors in global market that have more varieties of products
thus it also act as threat for Cadbury. Therefore, company in order to cope up with various threats
have emphasis on building and retaining brand image by delivering products or services beyond
expectancy of customers.
REFLECTION
For carrying out the given activities or task in this file, required to undertake extensive
research in respect to Cadbury. This has helped me in gaining useful insight on the sealer aspects
of the market which are very crucial in order to effectively run the business organization. With
the help of Porter's five force model, I was able to analyses the industry in which the company is
operating. Through this model, I have gained knowledge on what are important things which are
relevant to undertake good industry research. I have analyses the parameters which helps in
determining the competitive edge of the company. Along with that, PESTLE model for business
environment analysis is used. This model has me go through a lot of research in order to collect
the recent and most relevant factors that would impact the business of the company. At this
point, I was having doubt on myself whether I am going right or not or is there anything which I
missed out. After this, I have analyzed the capabilities of the company for which I have made use
of SWOT analysis, through this, I have got to know the key strengths, weaknesses, opportunities
and threats of the company and how it can be made useful in accomplishing the desired goals
and objectives of the company. After undertaking this project, I got to know about my weak
point in regard to both skills and knowledge. By practically applying the theoretical knowledge
has helped me in understanding that I am little weak on the research and also remained confused
about what is relevant and what is not. Thus, I require to work on my research skills and also
clearing my concepts as well which will help in overcoming the confusion part. By working on
these weak point will help me in further enhancing my skills which will be beneficial for my
future growth and development and in the career as well.

CONCLUSION
It can be concluded from above analysis that company operates in particular industry so it
have to make amendation or modification in its operation as per situation of industry to sustain
for longer period. Manager of Cadbury needs to continously conduct market survey or research
in order to find key changes in external environment and decide appropriate strategies that cna
contribute in growth of firm. It have been learnt form above report that company have effectively
position its brand image in minds of customers by delivering products beyond thier expectancy.
There were numerous factors such as policies of government, technology, economic condition,
environment and legal laws that positively and negatively impacted on business. But
management of Cadbury by choosing right strategies to delivered best products or services to
customers is able to retained its market share in confectionary industry.

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