Cadbury Company: Risk Management Framework Case Study Analysis

This case study examines Cadbury's risk management strategies and procurement practices within the context of its sustainability program, Cocoa Life. The report begins with an introduction to Cadbury and the significance of quality risk and procurement management in maintaining organizational fl...Read More

Case study of Cadbury
company

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Review of the risk in the case study.............................................................................................1
Risk Management Framework.....................................................................................................1
Evaluation of framework.............................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Quality risk and procurement management influence the organisations to maintain the
flexibility in the structure and improves the performance of the business Procurement practices
in the company is best when company is making purchasing decisions by building relationship
with the suppliers and using proper technology(Fleming, 2019). Present study is based on the
company Cadbury that was founded in the year 1824 in England by John Cadbury. It is the
second largest confectionery brand operating in more than 50 countries. Report includes risk
management in Cadbury by developing risk management framework and evaluation of that
framework.
Review of the risk in the case study
Mondelez international parent company of Cadbury, plans to bring all the Cadbury lines
under there in-house scheme as Cocoa life. It is basically a sustainability programme as many
farmers are getting livelihood and it also strengthen their communities. A sudden fall in price of
the Cocoa have been seen from $3,000 to $2,500 but under Fairtrade rule farmers would not get
affected due to this program as they must get at least $2,000 per tonne as they are working
together to have secure future of Cocoa farming. With respect to investment and spendings
things are unclear for Cocoa life that whether the farmers will get influence over the prices they
will get for Cocoa(Barrientos, 2016). Mondelez- owned Cadbury products will carry logo of
Cocoa life on the packaging. Here a risk arise for the Cadbury that customers will get confused
and they will doubt about the standard of the products as ethical trade will not be there if other
companies drop Fairtrade. It is very risky if every company starts their own mark then consumers
will get confused in identifying the best. In this case, expansion of Cocoa life with respect to
Fairtrade's involvement may or may not give confidence to the consumers to buy Cadbury with
Cocoa life label as it is helping Cocoa farming community. Many of the people accuse Cadbury
for this trade movement. Another risk that may arise is related to quality of the product as
company may not quality raw material from the farmers as they were getting previously. This
may risk there product quality and customers satisfaction.
Risk Management Framework
Figure:- 1
1

Risk management framework is used to identify different threats with respect to the
organisation and also helps to identify different strategies to make these impacts minimum by
eliminating all the possible risks involve by monitoring and evaluating the strategies. Risk
management framework is having different steps that are followed in order to manage the
risks(Giannakis and Papadopoulos, 2016).
Identify:- In order to manage the risk first step is to identify the risk that company may bear if
proper management is not there. In this case of Cadbury major risk is related to customers
dissatisfaction as there are chances that customers may get confuse in choosing the product.
Another risk is that Cadbury may not get quality of raw material that may affect its quality and
company may loose its potential customers and brand image from market. Many people accuse
Cadbury for this trade movement and it is not good for its brand image.
Measure:- It is difficult to manage the risk if company is not able to measure the risk as all the
risks are not quantifiable in nature. From the case study risk can be analysed by either giving
ratings or analysing the cost related to it. Cadbury have to take feedbacks of the customers so
that they can measure whether this implementation will affect its popularity and quality of its
product or not. Qualitative and quantitative risk measures have to be taken by the company.
2
Illu
stration 1: Risk management framework

Quality of its product after the trade movement have to be matched with its previous quality
products.
Manage:- After measuring the risks proper management of these risks have to be done so that
these risks can be avoided by understanding the root cause of the risk(Sadgrove, 2016).
According to the case Cadbury is having both positive and negative effect of the sustainability
program. Company have to check whether the risk is desirable or not. As company may have
quality related risk and it may affect the future operations of the business. For the same Cadbury
have to monitor and manage the things on continuous basis.
Monitor:- There are different technology that can help the firm to identify the risk and there
causes so that company can monitor them and can take proper actions against it. As Cadbury
may face risk related to quality of the product, so company have to monitor whether products
quality is matching the customers expectation or not(Carlin, 2016).
Report:- Dashboard and scorecard reporting is the most flexible reporting that helps in
addressing specific needs that is required to overcome these risk factors. Cadbury have to
prepare different reports and analyse it in order to check the level of risk after taking the
measures.
Evaluation of framework
From the case above it is been evaluated that this Fairtrade can bring positive change to
the communities but may bring risk for the products of Cadbury as customers may get confuse to
choose between both Cadbury products and Cocoa life. This programme may bring sustainability
livelihood but it may also lead to quality risk for the company Cadbury. Lack of customers
satisfaction may be seen that may result in loss of there brand image in market. Cadbury have to
evaluate and analyse in an effective manner whether this may result in huge risk for the firm and
the way they can take proper measures to overcome these risks. Cadbury may deal with the risks
by having proper management and analysing the effect of this programme on future operations of
the business and its product quality(Luthra and et.al., 2017).
CONCLUSION
From the given case study it is been analysed that Cadbury can deal with quality risk and
procurement management by having proper risk management framework and evaluating the
framework so that business performance can be improved by managing the risks coming towards
the firm.
3

REFERENCES
Books and Journals
Barrientos, S., 2016. Beyond Fair Trade. The Economics of Chocolate, p.213.]
Carlin, B., 2016. Quality risk management of compliant excipients. Journal of Excipients and
Food Chemicals, 3(4), p.1104.
Fleming, Q.W., 2019, January. Project procurement management: contracting, subcontracting,
teaming. Project Management Institute.
Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management
approach. International Journal of Production Economics, 171, pp.455-470.
Luthra, S. and et.al., 2017. An integrated framework for sustainable supplier selection and
evaluation in supply chains. Journal of Cleaner Production, 140, pp.1686-1698.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
ONLINE
Risk management framework. 2019. [ONLINE]. Available.
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