Cadbury's Strategic Management Plan: Growth Strategies

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STRATEGIC MANAGEMENT PLAN
CADBURY
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Table of Contents
LIST OF FIGURES.......................................................................................................................3
INTRODUCTION........................................................................................................................4
TASK 1...................................................................................................................................... 5
1. APPLYING PESTLE ANALYSIS FOR ACCESSING THE POTENTIAL SCENARIOS OF
CADBURY.............................................................................................................................. 5
2. ANALYSING THE CAPABILITIES OF CADBURY BY USING FRAMEWORKS........................7
3. APPLYING FIVE FORCES MODEL FOR ANALYSING THE COMPETITIVE ENVIRONMENT 11
4. APPLYING SWOT ANALYSIS AND EVALUATING INTERNAL AND EXTERNAL
ENVIRONMENT...................................................................................................................13
5. EVALUATION OF TYPES OF STRATEGIC DIRECTIONS AVAILABLE TO CADBURY............16
6. RECOMMENDATIONS OF THE APPROPRIATE GROWTH STRATEGIES WHICH ARE
CURRENTLY AVAILABLE...................................................................................................... 18
7. PRODUCING STRATEGIC MANAGEMENT PLAN BY ADDRESSING THE GROWTH
STRATEGIES........................................................................................................................ 19
CONCLUSION.......................................................................................................................... 23
REFERENCES........................................................................................................................... 24
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LIST OF FIGURES
Figure 1 McKinsey's 7S model..................................................................................................7
Figure 2 Organizational structure of Cadbury..........................................................................8
Figure 3 VRIO framework.........................................................................................................9
Figure 4 Porter Five forces model of Cadbury........................................................................11
Figure 5 Porter’s Generic Strategies.......................................................................................16
Figure 6 Bowman’s Strategy Clock Model..............................................................................17
Figure 7 BCG Matrix of Cadbury.............................................................................................21
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INTRODUCTION
This assignment will debate in context to the business strategic plan of the company
Cadbury. Cadbury is a multinational British company which is owned by Mondelez
International. It was founded by John Cadbury in 1824 and it’s headquartered is in Uxbridge,
London, England. The company operates in more than 50 countries and it is known for its
best product Cadbury Dairy Milk Chocolate all over the world. This assignment will discuss
the impact of the macro environment on Cadbury and will access the internal capabilities
and environment of Cadbury. This assignment will evaluate the competitive forces of the
market by applying porter's five forces model on Cadbury. This will also apply the theories
and models for understanding and interpreting the directions which are available to
Cadbury. Moreover, it will also show the preparation of the strategic management plan by
applying valid objectives and tactical actions.
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TASK 1
Cadbury is well known famous leading brand all over the world. It is famous for its product
Dairy Milk and has varieties of products prevailing all over the world mainly in 50 countries
and emerged in the global brand.
Mission statement
Cadbury believes in quality and this is the promise. The reputation of Cadbury is made upon
the quality and the commitment to constant improvement which will ensure that the
promise is conveyed to the people.
Vision statement
Vision is a significant point in the business strategic plan and it is for a certain time. It
interconnects both purposes and values of the organization. Vision is proposed to give
guidelines to workforces about how they must perform and encourages them to contribute
their best.
1. APPLYING PESTLE ANALYSIS FOR ACCESSING THE POTENTIAL
SCENARIOS OF CADBURY
PESTEL ANALYSIS OF CADBURY
POLITICAL FACTORS: The process of Cadbury in the UK gets changes due to the change in
the government form workers party to the traditional social democrat. This restricts the
entry of the employees from Europe which effect on the employee's decisions on the future
of the Cadbury. It also determines the reimbursement and investment of the stakeholders
by the burden of the tax (Krishnaswamy, 2017).
ECONOMIC FACTORS: The Cadbury sales are comparatively stable to worldwide during the
monetary recession. The company was able to increase 30% addition in the yearly growth
and income from Trident and Dairy Milk. Demands of chocolate increases during the festival
seasons which people can willing to buy (Krishnaswamy, 2017).
SOCIAL FACTORS: Social factors comprise beliefs, norms and values of the industry. Cadbury
has formed a positive influence on consumers in terms of values and beliefs by exempting
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the alcohol from coffee, cocoa, liquid chocolate or tea. The problem faced by the company
is increasing the health conscious people which ignore the intake of the chocolates
(Krishnaswamy, 2017).
TECHNOLOGICAL FACTORS: By using technology the quality of milk gets improved much.
Preservation power can also be improved by using the new technology so that the product
of cold storage like dairy milk can be preserved and stored well (Krishnaswamy, 2017).
ENVIRONMENTAL FACTORS: It is the main factor that affects the business. The costs get
increased by using the excess amount of fossil fuels. Cadbury needs a well-developed image
of the business environment in the competitive market, so the company should start
investing in green technology which is friendly to the environment (Krishnaswamy, 2017).
LEGAL FACTORS: Cadbury is one of the famous brands in the global market and which do
not require anything to guard its brand and property. In the market there are many
substitutes of Cadbury by the company has very strong strength ahead in this competitive
world. Though, confectionary goods have an undefined future due to hazards of health care
and obesity (Krishnaswamy, 2017).
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2. ANALYSING THE CAPABILITIES OF CADBURY BY USING
FRAMEWORKS
STRATEGIC CAPABILITIES
Strategic capabilities of the members of Cadbury permit the growth and creation of the
strategy that will lead to development in the importance of the products and in pursuit of
reasonable benefits (Morden, 2016).
MCKINSEY’S 7S MODEL
This model helps in knowing the overall effectiveness and capabilities of Cadbury by its
internal analysis.
Figure 1 McKinsey's 7S model
(Source Ravanfar, 2015)
Strategy: It is an action plan of Cadbury prepares in response to the expectation of the
changes in the external environment. The strategy is distinguished by plans or functioning
actions by its nature of being deliberate, well supposed through and frequently practically
learned (Ravanfar, 2015).
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Style: Cadbury has its own style of management and distinct culture. It has its own beliefs,
values and norms which grow over time and converted comparatively durable features of
the life of Cadbury business (Ravanfar, 2015).
Structure: Cadbury is structured in its own way by depending on its culture and objectives.
The structure of the company is dictated through its performance and operations. The
business of Cadbury is in a hierarchical way with various departments and divisions and each
department has different tasks but their objective is the same (Winnubst, 2017).
Figure 2 Organizational structure of Cadbury
(Source Winnubst, 2017)
Skills: Cadbury focuses on the development and growth of the staff and enhancing them
increase their skills. The employees at Cadbury get benefited as the company is using the
latest technology which helps them in effective working and free from health and safety
issues (Ravanfar, 2015).
Staff: The business is made up of the people who make the real difference to the growth
and success of Cadbury in the progressively knowledge-based culture. The process of hiring
staff in Cadbury is conducted by the human resource department and they provide training
and support them by mentoring (Ravanfar, 2015).
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Systems: The system of Cadbury deals with the process and activities of the job which can
be completed by the employees. For changing the structure and strategy, systems must
follow less disruptive and more efficient. It also deals with the customer's satisfaction
through its products (Ravanfar, 2015).
Shared values: The employees of Cadbury share some common guiding concepts and
fundamental ideas around which the company is built. This helps in making money and the
achievement of excellence in every field of the company. These common goals and values
keep the workers working towards the common objective and destination as a
comprehensible team and are essential to have the team spirit alive (Ravanfar, 2015).
VRIO FRAMEWORK
The VRIO framework is followed by Cadbury for accompanying a resource-based
investigation for constructing a sustainable benefit to the company by its mainly consumed
products (Dairy Milk). The analysis for this is followed below:
Figure 3 VRIO framework
(Source Chatzoglou et al., 2018)
RESOURCES VALUE RARE IMITATION ORGANIZATION
Brand
awareness
Yes (Chatzoglou
et al., 2018)
Yes, it has one
of the leading
brands in the
trade
No Cadbury has
segmented in
various portions
of markets
Channel
management
Yes No Can be imitated
by consumers
There is a lot of
potential for
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utilizing channel
management
Product
portfolio
Yes, it is valued
in several
segmentations
and customer
preferences
Many
competitors are
trying to enter
in profitable
segments
Yes, by
competitors
(Chatzoglou et
al., 2018)
Cadbury has
used it for
impact good in
case of an
exhibit
Position among
wholesalers and
retailers
Yes, Cadbury
has strong
relationships
with
wholesalers and
retailers
Yes Not impossible
but hard to
imitate
Yes, Cadbury
uses it very well
Opportunities Yes, new niches
are evolving in
the marketplace
No, as many
competitors are
also aiming
those niches
Yes, by the
competitors
(Chatzoglou et
al., 2018)
It will require a
higher budget
for brand
extension
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3. APPLYING FIVE FORCES MODEL FOR ANALYSING THE COMPETITIVE
ENVIRONMENT
COMPETITIVE ANALYSIS USING PORTER FIVE FORCES MODEL ON CADBURY
Cadbury is remarkably well famous brand for chocolates which has involved high investment
in the development and research for meeting the competitive advantage. Thus, Cadbury
feels it important to analyse the factors of competitors, structure, market share and growth
rate.
Figure 4 Porter Five forces model of Cadbury
(Source Carraher, 2018)
Suppliers Powers: There is a low bargaining power of suppliers as there are many suppliers.
Cadbury has higher bargaining power as compared to its suppliers and it can buy the raw
materials in bulk which results in lowering the cost and more benefit (Carraher, 2018).
Buyers Powers: There are millions of buyers for the products of Cadbury around the world
so they have the high and moderate power of bargaining. The increase in numbers of the
competitors affects the same products at the same price cause the customer alteration
towards loyalty (Carraher, 2018).
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The threat of substitutes: There is a moderate threat of the substitutes as the supermarkets
tend to copy the products of Cadbury and provide their brand name on the products at the
cheaper price. The chocolates of Cadbury still scores higher than the substitutes as they are
easy to reserve (Carraher, 2018).
The threat of new entrants: The threat of the new entrants is low to the Cadbury. The entry
of competitors affects less as there are already many well organized and settled brands
prevailing in the market. These include, Kraft, Nestle, Hershey's and many more and the
company also requires high capital (Carraher, 2018).
Industry rivalry: The rivalry among the existing players is high as many businesses are
competitors of the Cadbury and plan to take over the position of Cadbury in the market. The
main rivals of the company are Nestle, Hershey's etc. because they deal with the same
products which are similar in some kinds (Carraher, 2018).
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