SWOT analysis of Cadbury PLC | Business Teacher
Cadbury SWOT Analysis
Until 2010, when it was bought by Kraft in a hostile takeover, Cadbury was a UK owned company (Wallop 2016). Now part of the Kraft’s Mondelez Group of businesses, Cadbury has undergone a number including the relocation of manufacturing plants from the UK to Poland, despite assurances before the merger that this would not happen, and recipe changes to classic Cadbury products such as its crème egg (Lewis 2016; Morris 2015). These changes have arguably undermined the caring reputation of the Cadbury brand in the UK and its association with quality (Wallop 2016).
Cadburys has a strong manufacturing process which can adapt to changing consumer tastes and meet these changing demands. Despite being associated with chocolate, Cadburys has a diverse product range which enables it to compete in emerging markets (Mondelez 2017). This product range is also reinforced by it being part of Mondelez. Cadburys is associated with a strong ethical approach and this has reinforced its brand as being caring and socially responsible to societal stakeholders and environmental issues (Wallop 2016). Cadburys has a strong brand and its adverts, such as the gorilla playing the drums, have created talking points for their consumers and reinforced the brand (Cadbury 2017).
Cadburys is dependent on confectionary as its main product offering and this may be impacted by any regulatory plan which may attempt to tax high sugar and high fat foods, such as chocolate (Butler 2015). This would increase costs for Cadbury, who may have to pass these on to consumers either through higher prices or by producing smaller bars. Entering new markets also requires high levels of investment, which may be possible due to it being part of Mondelez, but may also place Cadbury in direct competition with other brands owned by this group. Cadbury also need to consider undertaking market research when changing a recipe to include consumer tastes in this process (Lewis 2016).
Emerging markets may provide the opportunity for Cadbury to increase its global market share in areas such as China and Russia (Mondelez 2017). Opportunities for increased market share in the USA have also been provided by the sale of Cadbury to Mondelez as they already have access to the American market. Production can also be moved to lower cost countries where labour costs are cheaper which would help with cost savings and Cadbury may also benefit from the economies of scale offered by Mondelez (Mondelez 2017). There are also opportunities in sustainability for Cadbury, which will help it reinforce its image of a caring organisation with strong connections to the society within which it operates (Cadbury 2017).
The long-held positive association of Cadbury as a trusted and caring brand may be undermined by the activities of Mondelez, in areas such as the relocation of production plants leading to staff job losses (Wallop 2016). The threat of increased costs such as fuel, transport, packaging and sugar across the world will impact on Cadburys profit margin (Mondelez 2017). This will also be impacted by aggressive pricing and promotional activity from competitors and from retailers amongst increasingly cost-conscious consumers. The demand for Cadburys’ products may also be impacted by increased concerns regarding obesity and consumers becoming more health conscious (Butler 2015). This may require Cadburys to increase its research and development to reduce the calorie content of its products but this should also include consumer testing (Lewis 2016).
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- Lewis, K. (2016) ‘Cadbury’s Creme Eggs sales and satisfaction falls after controversial recipe change’ Independent, March 24 [online] Available from http://www.independent.co.uk/news/uk/home-news/creme-egg-easter-cadbury-mondelez-recipe-sales-a6950221.html
- Mondelez (2017) ‘Mondelez International Inc. Form 10-K Annual Report’ [online] Available from http://www.annualreports.co.uk/HostedData/AnnualReports/PDF/NASDAQ_mdlz_2016.pdf
- Morris, B. (2014) ‘The Cadbury deal: How it changed takeovers’ BBC Business News, May 2 [online] Available from http://www.bbc.co.uk/news/business-27258143
- Ruddick, G. (2017) ‘Cadbury says chocolate could get smaller after Brexit’ Guardian, March 24 [online] Available from https://www.theguardian.com/business/2017/mar/24/cadbury-warns-chocolate-could-get-smaller-after-brexit
- Wallop, H. (2016) ‘The many ways Cadbury is losing it magic’ Telegraph, March 21, [online] Available from http://www.telegraph.co.uk/food-and-drink/features/the-many-ways-cadbury-is-losing-its-magic/