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

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