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Autor: anton • November 28, 2010 • 1,547 Words (7 Pages) • 543 Views
SWOT Analysis and Report for Cadbury Schweppes - Business Research Paper
Cadbury Schweppes was founded in the year 1831 by John Cadbury. Its revolutionized cocoa started processing from the year 1866 onwards. This company originally merged with Schweppes in 1969. Currently, this successful company is employing approximately about 43,000 people worldwide. Today, Cadbury Schweppes is the world's fourth biggest supplier of chocolate and sugar confectionery.
One of its products, Dairy Milk was introduced in 1905, and has become the most successful moulded chocolate in UK history and the basic ingredient for many other Cadbury products. 95 years later, Dairy Milk is one of the world's most famous brand names and the company's leading chocolate bar by revenue.
Sales from Cadbury's Dairy Milk alone are estimated at over Ðˆ135 million for 1995. Cadbury considers its success is based on three factors: quality, value for money and good advertising.
Aim: Apply SWOT analysis to Cadbury's current situation and its position to enter a foreign market
It is important to investigate on the internal and external environmental forces for the Dairy Milk in France. Relevant organizational and industrial information is required for the development of a SWOT analysis. The analysis of the environment and the consideration of the situational factors when designing marketing planning, is critical as it would allow Dairy Milk to capitalize on organizational strengths, minimize any weaknesses, exploit market opportunities and avoid any threats.
Cadbury would realize several possible advantages in going abroad. By penetrating a foreign market the company could:
* Maintain a stable growth of a company by maximizing the use of its production capacity and thus increase economies of scale and scope.
* With its brand name, Cadbury could counterattack the competitors it faces in the domestic market by attacking their domestic market.
* Keep up with the financial strength by increasing its sales and profit, indeed the foreign market could present higher profit opportunities than the domestic products.
* Acquisition rules in UK, reduce its dependence on the UK market and therefore diversify its market specific risks.
* Overall, Cadbury has been successful through the new products (development) it has to offer.
Generally, as Cadbury has a weak position in the US market, thus, need to change its target to a different location. Besides its lack of distribution network, it also has a small total of market share altogether. Therefore in order to market the product in France successfully, Cadbury would have to find out on how it can improve in order to have great performance. It is also good to find out what are the situations that they could avoid in order to be successful. In order to market products the following issues should be considered:
* Total French production of chocolate bars and confectionary, which has increased by 24.5 per cent between 1988 and 1991, has slowed down in more recent years, partly due to the economic slump.
* Consumption of chocolate products, which has been growing until 1991, remained fairly static in 1992, reflecting a fall in demand due to the gloomy economic situation.
* Sales of milk chocolate bars, which account for 24 per cent by volume of total sales of chocolate bars, decreased by 3.7 per cent.
Through its confectionary product line, least to mention is to build viable positions in prioritized markets through organic growth and acquisition. Besides what is mention above, Cadbury has other opportunities to have market development in Russia and China. The Timeout Candy Bar market is growing worldwide. This company is also at the same time distributing its products via the internet - Develop Gourmet Line. Besides developing the "Low Calorie" line of chocolates and sweets, they also offer the "Sugar Free" sweets line. This has thus opened a completely Cadbury world in US.
Therefore in order to get the product into a new foreign market, France, Cadbury would have good opportunities in store for them. Opportunities are as follows:
* In terms of political issues, France is an advanced parliamentary democracy and politically is highly stable. The political power is centralized in the parliament, the Prime Minister and the President. The country specific risk is negligible. France is a member of the European Community and has excellent relations with the UK.
* Economically, France has the fourth largest Gross Domestic Product in the world. It is a first-world advanced market based economy. Despite a recent recession, its economy is very strong and also highly deregulated in line with European Union policies. France represents a very large potential market with a high standard of living and purchasing power. The economy is highly open internationally and conducts a high percentage of trade within its European partners.
* With regards to its social situation, France has a broadly central/southern European culture which has many similarities with the UK. However cultural differences do exist and these must be considered when planning for the market.
* France has a high technological level and a lot of industries are based in the technological sector. This technological base constitutes one of France's competitive advantages.
Due to its confectionary products, it is very important for Cadbury to be aware of any present or upcoming threats. The company should take note of the changes in the consumer's buying trend. It is perceived that consumers might shift from chocolates to "Healthy" snacks. If this were to happen, there might be a poor product development which would tarnish the Cadbury's name. Needless to say price wars would occur between its competitors like Mars, Hershey and Nestle. Due to the abovementioned, there would be seasonal sales slumps all year round which will reflect to an increase in cost of the raw materials needed. Cadbury would then have to be prepared for growth of small local gourmet chocolates and regional candy manufacturers.
However if Cadbury were to market its products in France, the company has to be aware of the risks it could encounter. It might:
* Not understand foreign