INDUSTRY & COMPETITIVE ANALYSIS

CADBURY INDIA(Part – I)

Presented By

Mohd. Yasser Arafat (55)Division-A

The sweetest story ever told… or heard

Vision

Purpose and Values

• Objective– Grow shareholder value…over the long term.

• Strategy– Create robust and sustainable regional positions

in our core categories of confectionery and beverages through organic growth, acquisition and disposal.

• Process– Achieve this by managing by value.

Chronology of a success story

1750 - Mayans discover cocoa.1831 - Manufacture of drinking chocolate and

cocoa began in Birmingham.1865 - John and Benjamin Cadbury launch

Cocoa Essence.1886 - Cadbury became one of the first firms to

open dining rooms with kitchens and with food on sale.

1899 - Became a private limited company “Cadbury Brothers Ltd”.

Chronology Contd…

1905 - Dairy Milk was launched.

1915 - Milk Tray introduced.

1932 - Bournvita was launched.

1947 - Cadbury factory set up in India.

1969 - Cadbury merged with Schweppes.

1993 - Cadbury opened the world's largest and most advanced chilled

warehouse in Birmingham.

Multi-Category PresenceEu

rope A

fric

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meri

cas

Asi

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UK

France

Spain

Poland

S.Africa

US

Canada

Mexico

Brazil

Australia

Japan

Thailand

Chocolate Sugar GumKey Markets

The Indian Chapter

• Cadbury began operations in India in 1947.

• Challenge in India– Get people accustomed to chocolates-

primarily seen as a western taste.– Do so by reaching out to the masses in a

land where mindsets and preferences are as diverse as the country itself

What makes a successful brand?

• Carves out a distinct role in the consumer’s life

• Constantly delights the consumer year after year

• Consistent value proposition

• Local expressions of universal needs

Elicit a ‘WOW’ at any given time

Strategy of Cadbury

• Increasing consumer base by focusing on affordability and availability.

• Small affordable priced packs launched.

• Advertising aimed at changing consumer perception and eating habits.

• Commitment to stakeholders in line with Corporate Governance policy.

Business Model

• Attractive and growing markets

• Expandable consumption

• Strong positions

• Impulse categories less exposed to retail consolidation

• High barriers to entry

Attractive and Resilient Returns

Strategic Changes

• Organisational– Comprehensive structural and leadership

change.– Consolidated operational structure.– Increased scale of each regional operating

unit.– Separated supply chain management from

commercial management.

Goals and Priorities

1. Deliver superior shareowner performance.

2. Profitably and significantly increase global confectionery share.

3. Profitably secure and grow regional beverages share.

4. Ensure our capabilities are best in class.

5. Reinforce reputation with employees and society. Contd…

Goals and Priorities Contd…

6. Up to a third of benefits reinvested in top line growth.

7. Operating margin growth of 50 – 75 basis points pa.

8. Net sales value growth of 3% - 5% pa.

9. Targeting a 10% reduction in direct and indirect costs 20% reduction in factory base 10% reduction in headcount

10. Savings across: supply chain; commercial; back office

11. Operational gearing from volume growth.

Strategic Framework

Distribution Strategy

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CADBURYS INDIA LIMITED

CADBURYS INDIA LIMITED

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Each in district

Distributors

Retailers

BCG MATRIX

Dairy MilkBournville Candy

Perk

Delight

EclairsGems

???

High Low

High

Low

Market

Gro

wth

Relative Market Share

Circle Size = proportion of total revenue business contributes to corp.

5 Star

Bournvita

Ansoff Model

Market

ProductEXISTING NEW

EX

IST

ING

NE

W

Market penetration(Dairy Milk,

Perk,Bournvita)

Product development

(Bournville,Chockis)

Market development

(Candy)

Diversification(Gems,Eclairs)

GE McKinsey Matrix

Low

High

Medium

AverageStrong Weak

• Market Size• Growth Rate• Profit Margin• Intensity of Competition• Seasonality• Cyclicality• Resource Requirements• Social Impact• Regulation• Environment• Opportunities & Threats

• Relative Market Share• Reputation/ Image• Bargaining Leverage• Ability to Match Quality/Service

• Relative Costs• Profit MarginsIndustry

Attractiveness

Business Strength

Rating Scale: 1 = Weak ; 10 = Strong

6.7

3.3

10.0

1.0

1.03.36.7

Dairy Milk,Bournvita,

Perk

Bournville

Gems, Eclairs

5 Star

INDUSTRY COMPETITORS

Rivalry AmongExisting Firms(Nestle,Amul)

POTENTIAL ENTRANTS(Regional Players)

SUPPLIERS(Cocoa farmers &

others)

BUYERS(Consumers &

Customers)

SUBSTITUTES(Working in all

Substitute areas)

Threat of new entrants

Bargaining power of buyers

Threat of substitute products or services

Bargaining power of suppliers

Porter’s Five Forces Model

Macro Forces

Micro Forces

Political(Stability)

Social(Muh Meetha)

Technological(introduction of

double pack)

Economic(Affordable small

Packs)

Supply(Local)

Demand(Created)

Competition(MNC & Regional)

PEST Forces