The chocolate story

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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 Presence
Key Markets
Americas
France
Spain
Poland
S.Africa
US
Canada
Mexico
Asia Pac
Europe Africa
UK
Brazil
Australia
Japan
Thailand
Chocolate
Sugar
Gum
The Indian Chapter
• Cadbury began operations in India in
1947.
• Challenge in India
– Get people accustomed to chocolatesprimarily 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
CADBURYS
INDIA
LIMITED
Each in district
CNF
CNF
Distributors
DIS
DIS
Retailers
RET
RET
RET
DIS
CNF
CNF
BCG MATRIX
High
Relative Market
Share
Low
???
High
Bournvita
Dairy Milk
Market
Growth
Bournville Candy
5 Star
Perk
Low
Delight
Gems
Eclairs
Circle Size = proportion of total revenue business contributes
to corp.
Ansoff Model
EXISTING
EXISTING
Market
Market
penetration
(Dairy Milk,
Perk,
Bournvita)
NEW
Market
development
(Candy)
Product
NEW
Product development
(Bournville,Chockis)
Diversification
(Gems,Eclairs)
GE McKinsey Matrix
Business Strength
Industry
Attractiveness
• Market Size
• Growth Rate
• Profit Margin
• Intensity of
Competition
• Seasonality
• Cyclicality
• Resource
Requirements
• Social Impact
• Regulation
• Environment
• Opportunities &
Threats
• Relative Market Share
• Relative Costs
• Reputation/ Image
• Profit Margins
• Bargaining Leverage
• Ability to Match Quality/Service
10.0
Strong
6.7
High
6.7
Medium
Average
1.0
Rating Scale: 1 = Weak ; 10 = Strong
Weak
Bournville
Dairy Milk,
Bournvita,
Perk
Gems, Eclairs
3.3
Low
3.3
5 Star
1.0
Porter’s Five Forces Model
POTENTIAL
ENTRANTS
(Regional
Players)
Bargaining power of suppliers
SUPPLIERS
(Cocoa farmers &
others)
Threat of substitute
products or services
Threat of new entrants
INDUSTRY
COMPETITORS
Rivalry Among
Existing Firms
(Nestle,Amul)
SUBSTITUTES
(Working in all
Substitute areas)
BUYERS
(Consumers &
Customers)
Bargaining power of buyers
PEST Forces
Macro Forces
Political
(Stability)
Economic
(Affordable small
Packs)
Social
(Muh Meetha)
Technological
(introduction of
double pack)
Micro Forces
Supply
(Local)
Competition
(MNC & Regional)
Demand
(Created)
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