Business Strategy Report: Cadbury and Boost Guarana Case Study

This report presents a comprehensive business strategy analysis of Cadbury and its Boost Guarana product. It begins with a SWOT analysis, examining Cadbury's strengths, weaknesses, opportunities, and threats. The report then applies McKinsey's 7S model to evaluate the internal environment, focusing on structure, systems, skills, style, staff, shared values, and strategy. Porter's Five Forces model is used to assess the competitive forces within the chocolate sector. The analysis extends to strategies for improving Cadbury's competitive edge, including brand extension and strategic alliances. Finally, the report explores strategic planning using Porter's Generic strategy model and the Ansoff matrix, culminating in a strategic management plan that includes mission statements, objectives, segmentation, targeting, positioning, and marketing mix strategies, along with definitions of implementation and control. The report aims to provide insights into Cadbury's strategic positioning and recommendations for future growth.

Running head: BUSINESS STRATEGY
Business Strategy: A case study of Boost Guarana
Name of the Student:
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Table of Contents
Task 2: Analyzing the internal environment and capabilities of Cadburys.....................................3
1. Introduction to SWOT analysis...............................................................................................3
2. SWOT analysis of Cadburys and Boost Guarana....................................................................3
3. Conclusion...............................................................................................................................5
4. Introduction to Mc Kinsey’s 7s model....................................................................................5
5. Advantages of the model- Mc Kinsey’s 7s model...................................................................6
6. Explanation of Mc Kinsey’s 7s model to Cadburys................................................................7
7. Conclusion...............................................................................................................................8
M2: Evaluation of the internal environment to assess strengths and weakness of Cadbury internal
capabilities, structure and skill set...................................................................................................8
Task 3: Evaluation of competitive forces of chocolate sector for Cadburys and Boost Guarana
using Porter’s five forces model......................................................................................................9
1. Introduction to Porters five forces model................................................................................9
2. Porters 5 forces model to Cadburys and Boost Guarana.........................................................9
3. Conclusion.............................................................................................................................10
M3: Strategies to improve competitive edge and market position based on outcomes.................11
1. Brand extension and strategic alliance..................................................................................11

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2. Use of brand extension or strategic alliance to counteract the threat of substitutes for
Cadburys Boost Guarana...........................................................................................................11
3. Defend against the threat of industry rivalry.........................................................................11
4. Conclusion.............................................................................................................................12
Task 4: Strategic planning for Cadburys and Porters Generic strategy model and the Ansoff
matrix to Cadburys Boost Guarana................................................................................................12
1. Introduction to Porters Generic strategy model.....................................................................12
2. Cost leadership, Differentiation and Focus...........................................................................13
3. Strategies to Cadburys Boost Guarana..................................................................................13
4. Introduction to the Ansoff matrix..........................................................................................14
5. Market Penetration, Product Development, Market Development and Diversification.......15
6. Two strategies from the Ansoff matrix and relate to Cadburys Boost Guarana....................15
7. Conclusion.............................................................................................................................16
M4: Strategic Management Plan...................................................................................................16
1. Mission statement for Cadburys............................................................................................16
2. Objectives for Cadbury Boost Guarana.................................................................................16
3. Segmentation, targeting and positioning strategies for Cadburys Boost Guarana................16
4. Marketing mix strategies for Cadburys Boost Guarana........................................................17
5. Definition of implementation................................................................................................18
6. Definition of control..............................................................................................................18

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References......................................................................................................................................19
Task 2: Analyzing the internal environment and capabilities of Cadburys
1. Introduction to SWOT analysis
SWOT analysis is a process which identifies the strength, weakness, opportunities and
threats of Cadbury and Boost Guarana. This analysis determines the factors which accomplish its
objectives, obstacles to overcome and minimizes to get desired outcomes. Strengths describe
what the company excels and distinguish it from their competitors. Weakness stops the company
to perform at optimum levels (Rothaermel 2015). Opportunities are external factors which the
company uses to provide competitive advantage. Threats are factors which have potential to
harm the company.
2. SWOT analysis of Cadburys and Boost Guarana
Strengths1.Strongmanufacturingprocess2.Productrange3.StrongproductbrandWeaknesses1.Increaseofcost2.LackofmarketresearchOpportunites1.Increasemarketshare2.CheaperlabourcostThreats1.Impactonprofitmargin2.Healthconsciousnessonrise

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Figure 1: SWOT analysis of Cadbury and Boost Guarana
(Source: Elbardan, Ali and Ghoneim 2016, pp-239)
Strengths of Cadbury and Boost Guarana are as follows:
Strong manufacturing process: Cadbury and Boost Guarana have stronger
manufacturing process that adapts to change the taste of customers and meet with the changing
demand of their customers.
Product range: Due to launching of new chocolate bar product, Boost Guarana has
diverse range of products enable it to compete the company into emerging markets.
Strong product brand: The launch of first chocolate bar for energy simulation of brain by
the company, Boost Guarana offers extra energy as the energy drink. This product meets with the
need of genuine customers for simulate their mind and complement of their busy lifestyle
(Djohanputro 2016).
Weakness of Cadbury and Boost Guarana are as follows:
Increase of cost: The Company is based on confectionary in their main product which
attempts to tax higher sugar as well as fat foods like chocolate. It results to increase of cost,
which may pass these to customers either by higher price or by production of smaller bars.
Lack of market research: Before launching the new product, Boost Guarana into the
market, Cadbury is required to consider undertake a market research to understand the
customer’s tastes (Bull et al. 2016).
Opportunities of Cadbury and Boost Guarana are as follows:

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Increase market share: The emerging market provides opportunities for Cadbury for
increasing their global market share within China, Russia.
Cheaper labour cost: The production of chocolate are moved to low cost countries,
where there is cheaper labour cost help to save cost and therefore Cadbury benefits from
economics of scale (Bull et al. 2016).
Threats of Cadbury and Boost Guarana are as follows:
Impact on profit margin: Due to increase into cost of fuel, packaging as well as sugar as
it impacts the profit margin of Cadbury. It impacts the aggressive price as well as promotional
activities from the competitors and retailers among increase cost conscious customers
(Djohanputro 2016).
Health consciousness on rise: The demand of the company’s products impact by
increase concerns regards obesity as well as the customers become health conscious.
3. Conclusion
It is concluded that new chocolate energy bar helps Cadbury to reach a peak of
achievement. The company is focused on global growth of their products. The company is also
looking for other countries to market their products globally. Finally, the company is required to
strengthen their brand name of Boost Guarana more in the UK market.
4. Introduction to Mc Kinsey’s 7s model
The model is described how efficiently one can able to organize the company holistically.
It is based on seven elements to improve performance of company and also examines future
changes into the company. The model is categorized as hard and soft elements. Hard elements

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are those which have physically seen in place such as strategy, structure and systems. Soft
elements are intangible and they are not seen such as shared values, skills, staff and style (Alam
2017).
Figure 2: Mc Kinsey’s 7s model
(Source: Alam 2017, pp-1282)
5. Advantages of the model- Mc Kinsey’s 7s model
Following are the advantages of this model:
1. This model helps to understand the change into system and effects of the organization as
a whole.
2. It plans for a change into the business process.
3. It creates strategic cultural changes into the organization.
4. It helps to understand the current and future state of the organization (Shiri, Anvari and
Soltani 2015).
5. This model compares the future framework by means of current state.

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6. Explanation of Mc Kinsey’s 7s model to Cadburys
The 7S framework of McKinsey to Cadburys stands for:
Structure: Cadbury has head office segment which is responsible to provide direction
and support to regional structure. The other executives are responsible for business specialization
such as CFO. Cadbury requires meeting with customer’s requirements such as they are organized
in regional structure combines centralized organizational structure (Ravanfar 2015). Cadbury
follows a matrix structure for each function.
Systems: The Company is focused on process systems where each division can break into
manageable tasks as well as provide milestones to initiate for achievement of profits.
Skills: Cadbury requires innovative approaches to meet with the new taste requirement of
customer, riding to the health wellness trend, efficiency into innovation and volume.
Style: Cadbury follows of operational style in which the tea is emphasized for
cooperation among the regional centres of the company. Passion is emphasized on the
sustainability of the products.
Staff: The staffs are encouraged to make profitability of Cadbury and they are provided
with attractive incentives to increase employee satisfaction, lower turnover rate (Shiri, Anvari
and Soltani 2015).
Shared values: Cadbury develops new energy chocolate bar product to meet with the
customer’s preferences to stimulate the brain. The company achieves value to stimulate mind as
well as complement of busy lifestyle.

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Strategy: Cadbury has adopted marketing strategy to distribute their products and achieve
of brand equity for gaining of competitive advantage. The strategies ensures for production
efficiency, builds of portfolio and amends of packages.
7. Conclusion
McKinsey 7-S framework maps with the interrelated factors which influence the ability
of the organization for changes. Lack of hierarchy among the factors provides a significant
progress into the organizational part which is difficult to work without working on others.
M2: Evaluation of the internal environment to assess strengths and weakness
of Cadbury internal capabilities, structure and skill set
Strengths of Cadbury: The new energy chocolate bar product of Cadbury adapts new
changes into the taste of the customers to meet with new demands of the customers. The new
product helps the company to become competitive in the UK market. The new product is an
energy simulation of brain by the company which provides of extra energy as the energy drink
(Djohanputro 2016).
Weaknesses of Cadbury: Due to increase in tax of sugar, fat foods, there is a huge
increase into the cost of chocolate (Bull et al. 2016). The organization should undertake a
research on the market so that they can know the taste of their customers as well as their
demands.

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Task 3: Evaluation of competitive forces of chocolate sector for Cadburys and
Boost Guarana using Porter’s five forces model
1. Introduction to Porters five forces model
The framework is such a tool to analyze competition of the business. It is focused on
industrial organization’s economics for deriving five forces which determine competitive
intensity as well as attractiveness of the industry based on profitability (Yunna and Yisheng
2014).
Figure 3: Porters five forces model
(Source: Yunna and Yisheng 2014, pp-801)
2. Porters 5 forces model to Cadburys and Boost Guarana
Five forces factor to Cadburys and Boost Guarana are as follows:

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Rivalry among the existing players: It is high for Cadbury as there are many businesses
companies which are compete against Cadbury such as Nestle, Ferroro. Rivalry is strong for
Cadbury as they are selling of same types of stores as well as products (Zhao et al. 2016).
Entry of competitors: It is low as Cadbury is already an established company in UK
market. It is difficult for competitors to enter the market as Cadbury launches new chocolate bar,
Boost Guarana, which is an innovative energy chocolate product.
Threat of substitutes: It is moderate as the supermarket is tending to copycat popular
chocolates products as well as provide own brand into the shelves at cheaper prices. The
chocolates are scored high as compared to substitutes as it is easier to preserve (Dalken 2014).
Bargaining power of buyers: It is high as there are many buyers of Cadbury and
increasing number of competitors offer same product at lower cost which may affect the loyalty
of customers (Maehle and Supphellen 2015). There is no switching cost for the buyers.
Bargaining power of suppliers: It is low as there is large number of suppliers and
Cadbury has higher bargaining power as compared to suppliers. Cadbury can buy raw materials
with cheaper price and in bulk amount.
3. Conclusion
It is concluded that it is difficult for the rivalry of Cadbury to overcome with popularity.
The brand royalty of the company is maintained. The company is developing of new range of
products and new promotions in the market.

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M3: Strategies to improve competitive edge and market position based on
outcomes
1. Brand extension and strategic alliance
Tjemkes, Vos and Burgers (2017) stated that brand extension is use of established brand
name of categories of new product. It increases brand image and save the cost of the developing
new brand. Singh, Kalafatis and Ledden (2014) discussed that strategic appliance is arrangement
between two of the companies which are decided to share resources for creating a business
entity.
2. Use of brand extension or strategic alliance to counteract the threat of substitutes
for Cadburys Boost Guarana
In order to counteract threat of substitutes for Cadburys Boost Guarana, brand extension
is used as Cadbury gains a value market share of above 70 percent which is highest brand share
for the chocolate sector. The brand extension of Cadbury is based on launching of new energy
chocolate bar for stimulate of mind of their customers.
3. Defend against the threat of industry rivalry
Mass customization: It is a marketing technique which combines flexibility as well as
personalization of custom made products with lower units cost that is associated with the
production of mass.
Advantages of mass customization: It benefits higher sales of products associated with
the mass production. It offers the products and provides customers an option to add features of