Business Strategy Unit 32: Cadbury's Boost Guarana Case Study

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UNIT 32 BUSINESS STRATEGY

Table of Contents
INTRODUCTION........................................................................................................................................................ 4
LO1................................................................................................................................................................................... 5
P1 INFLUENCE OF MACRO ENVIRONMENT ON CADBURYS BOOST GUARANA AND ITS
STRATEGIES........................................................................................................................................................... 5
M1 STRATEGIC MANAGEMENT DECISIONS OF CADBURYS AND BOOST GUARANA....11
LO2................................................................................................................................................................................ 12
P2 AND M2 INTERNAL ENVIRONMENT AND CAPABILITIES OF CADBURYS AND
BOOST GUARANA............................................................................................................................................. 12
LO3................................................................................................................................................................................ 18
P3 EVALUATE COMPETITIVE FORCES OF THE CHOCOLATE SECTORS FOR CADBURY
& BOOST GUARANA.........................................................................................................................................18
M3 APPROPRATE STRATEGIES TO IMPROVE COMPETITIVE POSITION............................22
LO4................................................................................................................................................................................ 24
P4 STRATEGIC PLANNING FOR CADBURYS.......................................................................................24
M4 STRATEGIC MANAGEMENT PLAN OF CADBURY..........................................................................29
CONCLUSION........................................................................................................................................................... 30
REFERENCES........................................................................................................................................................... 31
LIST OF FIGURES
Figure 1: slept analysis of Cadbury................................................................................................................ 5
Figure 2: Stakeholder analysis..........................................................................................................................9
Figure 3: Swot analysis of Cadbury............................................................................................................. 12

Figure 4: Mckinsey's Model............................................................................................................................. 15
Figure 5: Porter five force model..................................................................................................................19
Figure 6: Porter's generic strategy.............................................................................................................. 24
Figure 7: Ansoff Matrix...................................................................................................................................... 27

INTRODUCTION
In this report of business strategy, the main aim is to contribute to the business plan
development by applying some effective tools of strategies. The first part is engaged in
discussing the influence of macro environment factors on business activities and
strategies. Secondly, the discussion will be held on analyzing the internal environment
in order to determine a company's strength and weaknesses. Further, the evaluation
will be performed to figure out the competitive & market position of the organization
and look for effective measures to improve the competitive edge. At last, a strategic
plan will be developed for the achievement of overall business objectives.
In this assignment, the tasks will be performed in concerned with the Cadburys Boost
Guarana. Boost Guarana is the first Chocolate bar manufactured by Cadbury and sold in
the UK, Australia, South Africa, and New Zealand. It enters in the energy market by
offering extra energy than the other energy drinks.It is said that just 1 bar of boost
Guarana contains 54mg of caffeine as one cup of coffee.

LO1
P1 INFLUENCE OF MACRO ENVIRONMENT ON CADBURYS BOOST GUARANA
AND ITS STRATEGIES
It is necessary to analyze the macro environment factors that influence the Boost
Guarana. The external factors have a major impact on business decision making and are
the uncontrollable factors that affect Cadbury's Boost Guarana performance (Schawel
and Billing, 2018). Therefore it is necessary to perform external analysis to figure out
the effective measures to overcome the negative effect on Boost Guarana (Scholes,
2015).
 SLEPT ANALYSIS ON CADBURYS AND BOOST GUARANA
The SLEPT analysis is a strategic framework that is used to determine the influence of
the external environment on the company. Cadbury needs to perform the SLEPT
analysis before creating business plans for Boost Guarana or developing the existing
ones (Murdock, 2017). It helps Cadbury to scan the external environment and
investigate the social, economic, legal, technological and political factors.
Figure 1: slept analysis of Cadbury

Source: (Mierzwa and Zimmer, 2017)

Social factors
Cadbury launched its mainstream chocolate bar “Boost Guarana” to fulfilling customer
needs. It is proved that it has been always responsive to customer demands.Cadbury
has also launched a well-known and popular chocolate bar Dairy milk and also produce
Wispa (Mierzwa and Zimmer, 2017).
Boost Guarana has been introducing in concern with growing healthy living by
reducing the sugar level in the chocolate bars.It seems to be the most countline
chocolate bar to boost energy, attention, and concentration.
Legal factors
As Boost Guarana is the chocolate bar provides mental and physical energy to people, it
requires providing information about its ingredients & calorie according to the legal
laws. The reason is that the customer wants to make a choice on the bias of fat content.
Another legal issue contains proposed sugar taxation regarding obesity. Increasing
demands for a food manufacturer in the UK is the other legal issues due to EU
membership (Murdock, 2017). However, food scandals have shown that people are not
ready to see food regulations for safety and health.
Economic factors
As of 2009, the global economic downturn affects the expansion of Cadbury plans but
the sales of Boost Guarana remains steady. In fact, Cadbury increased 30% profit from
the sales of chocolate bars.
As of 2010, Kraft had become able to purchase Cadbury due to the weak pound at a
very lowest price as compared to its actual value. Bank also offers lower interest that
allows Kraft to borrow €7 million from the British Bank. Further, the cost of relocating
manufacturing to Poland is very cheaper and Kraft just focuses on the profit incurred
by Cadbury rather than the brand protection (Mierzwa and Zimmer, 2017).

Political factors
Due to the change of government from the Labor party to the Conservative party, there
has been a negative influence on Cadbury’s Operations.The government restricts the
entry of new skilled workers that affect Cadbury's hiring decisions (Murdock, 2017).
Another political factor is the tax impositiondue to which Cadbury faces difficulty in
investment & payment to its shareholders.
As of 2010, Value-added tax has increased by 2.5% and results in increasing price for
Boost Guarana chocolate bar & reduced its sales (Murdock, 2017). As a result, Cadbury
decided to outsource a portion of its accounting to an Indian firm.
Technological factors
To launch Boost Guarana, Cadbury uses the technologies of brew machines to blend
cocoa gains & coffee. At present, it moves forward with the use of filling patents &
pathogen testing system for the heat resistant chocolate. It helps in the production &
packaging process of Boost Guarana chocolate bar.
Cadbury uses social media to market its chocolate bars and also to connect or
communicate with its customer. This reinforces the relationship between the customer
and the company (Mierzwa and Zimmer, 2017).
As of 2011, Cadbury starts using a gameplay app in order to engage with its customers
in specific activities. It includes a crème egg game linked to the London Olympics.
 STAKEHOLDER ANALYSIS OF CADBURYS AND BOOST GUARANA
It is a technique of identifying the stakeholders of the company and their needs. It will
analysis both primary and secondary stakeholders who have a major role in the
company’s success. For Cadbury, managing stakeholders is very important as they help
to ensure the projects have succeeded. Cadbury performs the stakeholder analysis to
figure out the stakeholder’s interest in addressing the project policy, plan, actions or
other programs (Andriof, and Waddock, 2017).

 Identification of Cadbury’s Stakeholders
Government
The government is considered as a stakeholder of Cadbury as they earn money through
taxes and V.A.T on each product of Cadbury including Boost Guarana. The government
as a stakeholder also finds interest in the job offers by Cadbury (Mierzwa and Zimmer,
2017). It also offers incentives to Cadbury for opening factories in an area having high
unemployment.
Customers
Customers and the public are the stakeholders as they buy chocolate bars from
Cadbury. Also, the owners of the shops who purchase products from Cadbury are the
stakeholders and sell it in their shops. Therefore they earn profit due to popular
Cadbury chocolate bars (Scholes, 2015).
Local community
Local communities are also considered as the Cadbury’s stakeholder as they are
interested in employment & also getting benefit with the improvement of local towns
because of Cadbury’s factories (Mierzwa and Zimmer, 2017). New facilities provided by
factories could also affect local people.
Also, the employees the other people who show interest in Cadbury are the
stakeholders. There is an advantage to Cadbury as there are plenty of people who find
their interest in joining the workforce of Cadbury (Andriof, and Waddock, 2017).

 Prioritize the stakeholders
.
Figure 2: Stakeholder analysis
Source: (Andriof, and Waddock, 2017)
The technique of power/ interest grid will let Cadbury identify to allocate accurate
positions as per the action needed.
Manage closely
These people have a high interest in the project having high power (Murdock, 2017).
Cadbury must put efforts to satisfy them.
Keep satisfied
These people have high power but less interest in business actions, therefore, Cadbury
needs to put limited work just to keep them satisfied (Scholes, 2015).
Keep informed
They are people with low power but high interest. Cadbury must communicate with
these people, they are might be helpful in succeeding project.

Monitor
These people have less interest & less power, Cadbury should not perform excessive
communication with them (Andriof, and Waddock, 2017).
M1 STRATEGIC MANAGEMENT DECISIONS OF CADBURYS AND BOOST
GUARANA
Due to the increasing market for energy drinks in the UK. Most of the bars &
supermarkets started keeping energy drinks. It has been a challenge for Cadbury to
manufacture a product which can beat these supermarkets (Mierzwa and Zimmer,
2017). Cadbury has found that energy bars are still in the form of sports outlet or
health food.
Cadbury applies the strategy of launching a new chocolate bar which is to be first
mainstream chocolate having energy simulation properties. As a result, Cadbury came
up with the Boost Guarana in the market that increases its sales in the UK market
(Mierzwa and Zimmer, 2017).
Cadbury applies the strategy of recognizing a brand name that directly attracts normal
consumers towards the product and represents its properties in the name. Therefore,
Cadbury has found BOOST GUARANA indicates boosting energy, attention, mental
accuracy & concentration (López-Hernández, et al., 2017).
Boost Guarana results to be the most effective countline bar in terms of boosting
energy (Scholes, 2015).

LO2
P2 AND M2 INTERNAL ENVIRONMENT AND CAPABILITIES OF CADBURYS
AND BOOST GUARANA
Boost Guarana has launched with the qualities of having the creaminess of the milk in
its chocolate bar with the finest ingredients. Cadbury believes in its philosophy of “A
glass with half full of Milk” (López-Hernández, et al., 2017).
Cadbury has launched several chocolate bars like Boost Guarana such as dairy milk, five
star and many more (López-Hernández, et al., 2017). All of these are strong brand
products with the highest quality.
The internal analysis will be done in order to figure out the internal factors that are
affecting the functionalities of Cadbury's HR. it is the process of evaluating the
organization's capabilities in order to assess the strength & weaknesses of the
Company.
 SWOT ANALYSIS
Figure 3: Swot analysis of Cadbury
Source; (Naik, 2015)