Cadbury Schweppes

Cadbury Schweppes

SWOT Analysis

Name; Lu Wenhao

Date;2020/5/27

Cadbury Schweppes

SWOT Analysis

Introduction.

A SWOT (Strength, Weakness, Opportunity, Threats) analysis is a business tool used to gauge a company’s position in the market. Conducting a regular SWOT analysis helps businesses to come up with the relevant strategic management and strategic plans that can elevate the business to a new level. SWOT analysis, if used per the relevant guidelines, can enable the management to have a better grasp of the market forces, the changing market climates, new market entrants, and any other obstacles that may hinder the success of the business. According to (Gurel and Tat, 2017), there are two environments in which business organizations exist, namely internal and external environments. A SWOT analysis, therefore, is a way of examining the internal and external environments of a business and using this information for problem-solving.

To better understand the SWOT analysis process, we are going to look into the internal and external operations of Cadbury Schweppes PLC. Cadbury Schweppes is a British company that was founded in 1831 by John Cadbury. The company was initially Curbury, but the company later acquired Schweppes, therefore, renaming it Cadbury Schweppes. Cadbury Schweppes employs over forty thousand people worldwide. The company deals in consumable goods such as soft drinks, confectionery, chocolates, gum, cereal, and many more. Cadbury Schweppe’s most popular product is the Cadbury daily milk chocolate, which brings in a revenue of over one hundred million annually (Bush & Bush,  2019). Cadbury Schweppes has excelled in business by creating products that are loved by consumers. Cadbury Schweppes is a household name in many countries around the world, and chances are every person has in one way or another consumed a Carbury Cadbury Schweppes product. Because of their popularity and its impact on consumers, Cadbury Schweppes needs to ensure that they maintain the excellent relationship they enjoy with consumers and customers by ensuring that product quality is top-notch. The company also tries to maintain its right name by doing regular analyses of the different factors that may affect its business. A regular SWOT analysis of the company helps to maintain its high standards in the international market.

SWOT analysis

Strengths.

Cadbury, being an internationally recognized company, enjoys the privilege of penetrating foreign markets. The ability of the company to sell its products internationally puts it at a better place than its local competitors (Bush & Bush,  2019). Using this advantage, Cadbury can maximize its production capacity by setting up production factories around the world. This way, the company would spend less time and money in the supply chain process by reducing the distance needed to transport the goods. By increasing the economies of scale and the scope of the business, the business will be able to increase its annual revenue, possibly by millions of dollars.

Cadbury has worked to create a brand name that is widely known and highly profitable. In the domestic market, Cadbury has the capacity and the reputation needed to tackle its competitors. With the help of various stakeholders, Cadbury can achieve a monopoly in the local markets as well as in selected markets around the world. The stakeholders play a significant part in the success of businesses. Customers, as stakeholders, can help the company to achieve maximum sales through the consumption of its products. To help increase consumption, the company can invest in the marketing and branding of the products. In most large companies, the marketing role is often outsourced to intermediary companies. The importance of using intermediaries to sell products, especially for a company like Cadbury, is that intermediaries have a better understanding of the markets (Bush & Bush,  2019).  Intermediaries are the people who go to the ground to interact with customers and distributors/wholesalers. Through these interactions, they can understand the market needs as well as consumer preferences. Intermediaries often have close interactions with shop owners and wholesalers who give them information about the rate of consumption of a product as well as the consumer responses about a product. Consumers will often complain directly to the shop owner if a product has any problems such as substandard or expired products by focusing on consumer satisfaction. Cadbury can be able to take over the markets both locally and internationally.

Cadbury can increase its sales and profitability because of its financial ability to keep up with market needs. To be able to join the foreign markets, businesses require millions of dollars in capital and good relations with the international stakeholders. Being a financial giant, Cadbury can invest in emerging markets either by collaborating with local businesses in doing business or through the acquisition of local brands (Bush & Bush,  2019). By acquiring local brands, Cadbury can reduce competition in the market as well as build its brand in these markets. When a business is acquired, the new owner can choose to either change the name or brand of the business or maintain the original name and brand. Either way, it is essential to understand the impact of good branding to a business.

Another advantage that is enjoyed by Cadbury as a brand is the favorable business climate of the United Kingdom. The acquisition rules, according to the law, reduce the company’s dependence on the local markets. This makes it easier for Cadbury to expand its businesses to other countries abroad. This also attracts investors who are willing to put their money in the company by buying shares in the company. Being a public limited company, individuals can invest their money in the business, therefore, increasing the financial power of Cadbury Schweppes.

To maintain its strength in the markets, Cadbury has to take into consideration the stakeholder contribution to its strengths. Carbury stakeholders comprise of consumers, customers, intermediaries, shareholders, board members, suppliers as well as anyone else who may directly or indirectly affect the business. “Stakeholder is any group or individual who can affect or is affected by the achievement of a corporation’s purpose.” It can thus be said that stakeholders are vital influencers of company strategy…” (Kumar, Rahman, and Kazmi, 2016). Business success is often attributed to consumer satisfaction. It is, however, essential to note that consumer satisfaction is dependent on the other entire stakeholder’s satisfaction. When a business has a good relationship with its suppliers, marketing companies, transport companies, wholesalers, employees, and other stakeholders, then the business has a higher probability of attaining consumer satisfaction.

Weaknesses

Cadbury faces some challenges in the markets, both locally and internationally. For instance, even after over a hundred years in the markets, Cadbury is still unable to dominate the North American and French markets. This weak link in the business costs Cadbury millions of dollars in revenue that would have been collected from these markets. The decrease in the production of confectioneries and chocolate in the French market can be attributed to the recent economic slump that has affected many countries around the world. Cadbury, therefore, has to take into consideration the economic situation of a country before they venture into the market to avoid losses. Business sustainability is dependent on consumer satisfaction as well as proper management. (Formentini and Taticchi, 2014) emphasizes the importance of understanding the different sustainability profiles such as “sustainability leaders, sustainability practitioners, and traditionalists.” To ensure sustainability, Cadbury should work its weaknesses by aiming to understand the challenges they face in the markets and finding different ways to solve the problem.

Cadbury also faces challenges in maintaining product quality and customer satisfaction to its millions of consumers around the world. This lack of satisfaction could be because of different expectations and needs. Factors such as culture can affect people’s idea of the right quality products and interests in products. (Svensson and Wagner, 2015). Cadbury, therefore, needs to ensure that proper market research is conducted to avoid consumer dissatisfaction, which may, in the end, affect its position in the market. Cadbury can use its intermediary stakeholders to do the groundwork. These intermediaries, mostly marketing companies, can deploy people on the ground to distribute samples and collect data on consumer feedback.

Opportunities

Given its position in terms of financial power and its ability to reach international markets, Cadbury has access to various avenues that puts the company in a better position to make profits compared to its competitors. Through its confectionery line, Cadbury has the opportunity to penetrate markets such as China and Russia, where their products are less popular. The company can penetrate these markets through expansion and acquisitions (Bush & Bush,  2019).

Cadbury also has the opportunity to open up online distribution channels. Because of the rapid development of the online markets and the various advertising channels available on the internet, Cadbury can reach a broader market by allowing consumers as well as distributors to order directly from the company through channels such as company website, Alabama, Amazon among other online platforms (Svensson and Wagner, 2015). The use of internet platforms for distribution makes it easy for the company to deal directly with customers cutting down on costs. The company can also use these online platforms to conduct market research as well as in addressing customer complaints.

Cadbury also has the opportunity to tap into the luxury markets by creating luxury products such as gourmet food products. The luxury market attracts millions of dollars in revenue each year as people seek to spend their money on expensive, high quality, and unique products. Items such as edible gold chocolates can do well for such markets (Bush & Bush,  2019). The organic market is also open and growing internationally. More people are seeking organic foods, while some are choosing to avoid animal products. Carbury has the opportunity to tap into these markets by diversifying its products to cater to the vegan/vegetarian consumers by going green. Diversification is an essential step in growing a business (Amacha and Dastane, 2017). Being able to reach consumers from different cultural and religious backgrounds as well as being conscious of the market changes in terms of consumer preferences can help to maintain a business’ sustainability.

 Threats

Threats from a business perspective can refer to any internal or external factors that may harm the business. Cadbury, being an international brand, faces many threats to its business structure. One of the significant threats facing the company is the changes in consumer trends. As more people are informed on healthy practices and diets, the demand for sugary products such as sweets and chocolates becomes lower. The emergence of animal rights movements and the new studies on the adverse effects of the dairy product also pose a threat to the company. To avert these threats, Cadbury should look into the production of healthier foods. Cadbury should also invest in research on consumer trends in different areas and strive to achieve consumer satisfaction.

The availability of cheaper, locally produced products that are similar to what Cadbury produces also poses a threat to Cadbury’s business. Brands such as Hershey is and mars pose a threat to Cadbury products in the market since they provide consumers with alternative and more affordable products. Carbury should try to match these prices and increase its product diversity to be able to keep up with its competitors.

Cadbury also faces the risk of being left behind technologically. Brands are shifting their markets to online platforms where they can advertise and sell directly to millions of consumers around the world (Saebi, Lien, and Foss, 2016). Brands also use online platforms to interact with stakeholders. Cadbury, therefore, needs to improve the online presence through actions such as social media engagements with consumers and other stakeholders.

Cadbury Swot Analysis

Conclusion
In summation, Cadbury, as a brand, has been in the market for over a hundred years. With years of experience dominating the international markets, the company has been able to gain market advantages over other companies. The company also has opportunism for growth in size and revenue. Cadbury, however, has some weaknesses and faces threats, both locally and internationally. It is therefore recommended that the company revises its mode of operations, and shift some of its operations such as marketing to online platforms. Cadbury could also ensure its pace in the market by diversifying its products and giving more attention to the production of healthy and organic foods. Another recommendation would be for the company to increase its marketing campaigns in markets where they are less popular such as the American market, by the use of intermediaries to conduct market research and advising on the best way to penetrate these markets.

.

.

References

Amacha, E., and Dastane, O., 2017. Sustainability Practices As Determinants Of Financial Performance: A Case Of Malaysian Corporations. [online] Papers.ssrn.com. Available at: <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2976089> [Accessed 16 May 2020].

Bush, T., & Bush, T. B. T. (2019, December 2). SWOT Analysis of Cadbury. Retrieved June 14, 2020, from https://pestleanalysis.com/swot-analysis-of-cadbury/

Formentini, M., and Taticchi, P., 2014. Corporate Sustainability Approaches And Governance Mechanisms In Sustainable Supply Chain Management. [online] www.sciencedirect.com. Available at: <https://www.sciencedirect.com/science/article/pii/S0959652614013699> [Accessed 16 May 2020].

Gurel, E., and Tat, M., 2017. SWOT ANALYSIS: A THEORETICAL REVIEW. [online] Sosyalarastirmalar.com. Available at: <http://sosyalarastirmalar.com/cilt10/sayi51_pdf/6iksisat_kamu_isletme/gurel_emet.pdf> [Accessed 16 May 2020].

Kumar, V., Rahman, Z., and Kazmi, A., 2016. Assessing The Influence Of Stakeholders On Sustainability Marketing Strategy Of Indian Companies. [online] Journals.sagepub.com. Available at: <https://journals.sagepub.com/doi/pdf/10.1177/2158244016667991> [Accessed 16 May 2020].

Saebi, T., Lien, L., and Foss, N., 2016. What Drives Business Model Adaptation? The Impact Of Opportunities, Threats, And Strategic Orientation. [online] Sciencedirect.com. Available at: <https://www.sciencedirect.com/science/article/abs/pii/S0024630116300590> [Accessed 16 May 2020].

Svensson, G., and Wagner, B., 2015. Implementing And Managing Economic, Social, And Environmental Efforts Of Business Sustainability: Propositions For Measurement And Structural Models | Emerald Insight. [online] Emerald.com. Available at: <https://www.emerald.com/insight/content/doi/10.1108/MEQ-09-2013-0099/full/html> [Accessed 16 May 2020].