A Organization Study On Cadbury

A Organization Study On Cadbury

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CHAPTER – 1
Introduction about the Organization & Industry.

Introduction to Cadbury

Cadbury, formerly Cadbury's and Cadbury Schweppes, is a British multinational
confectionery company wholly owned by Mondelez International (originally Kraft Foods)
since 2010. It is the second largest confectionery brand in the world after Mars. Cadbury
is internationally headquartered in Uxbridge, west London, and operates in more than 50
countries worldwide. It is known for its Dairy Milk chocolate, the Creme Egg and Roses
selection box, and many other confectionery products. One of the best-known British
brands, in 2013 The Daily Telegraph named `Cadbury among Britain's most successful
exports.




Type Subsidiary
ISIN GB00B2PF6M70
Industry Confectionery
Founded 1824 (196 years ago) in Birmingham, Warwickshire,
England
Founder John Cadbury
Headquarters Uxbridge, London, England
Key people Irene Rosenfeld, (Chairman)
Dirk Van de Put, (CEO)
Products See list of Cadbury products
`Number of
employees
71,657 (2008)
Parent Mondelez International
Website www.cadbury.co.uk/

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Confectionery Industry:

Confectionery is the art of making confections, which
are food items that are rich in sugar and carbohydrates.
Exact definitions are difficult. In general, though,
confectionery is divided into two broad and somewhat
overlapping categories, bakers' confections and sugar
confections.
Bakers' confectionery, also called flour confections,
includes principally sweet pastries, cakes, and similar
baked goods.
Sugar confectionery includes candies (usually called
sweets in British English), candied nuts, chocolates,
chewing gum, bubble gum, pastillage, and other
confections that are made primarily of sugar. In some
cases, chocolate confections (confections made of
chocolate) are treated as a separate category, as are
sugar-free versions of sugar confections. The words
candy (US and Canada), sweets (UK and Ireland), and
lollies (Australia and New Zealand) are common
words for the most common varieties of sugar
confectionery.
The confectionery industry also includes specialized
training schools and extensive historical records.


History of Confectionery Industry:
Some Indian confectionery desserts from hundreds of
varieties. In certain parts of India, these are called mithai or
sweets. Sugar and desserts have a long history in India: by
about 500 BCE, people in India had developed the
technology to produce sugar crystals. In the local language,
these crystals were called khanda (ख?), which is the
source of the word candy.
Before sugar was readily available in the ancient western world, confectionery was based
on honey. Honey was used in Ancient China, Ancient India, Ancient Egypt, Ancient
Greece and Ancient Rome to coat fruits and flowers to preserve them or to create
sweetmeats. Between the 6th and 4th centuries BC, the Persians, followed by the Greeks,
made contact with the Indian subcontinent and its "reeds that produce honey without bees".
They adopted and then spread sugar and sugarcane agriculture. Sugarcane is indigenous to

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tropical Indian subcontinent and Southeast Asia. In the early history of sugar usage in
Europe, it was initially the apothecary who had the most important role in the production
of sugar-based preparations. Medieval European physicians learned the medicinal uses of
the material from the Arabs and Byzantine Greeks. One Middle Eastern remedy for rheum
and fevers were little, twisted sticks of pulled sugar called in Arabic al fänäd or al pänäd.
These became known in England as alphenics, or more commonly as penidia, penids,
pennet or pan sugar. They were the precursors of barley sugar and modern cough drops. In
1390, the Earl of Derby paid "two shillings for two pounds of penydes."

Jordan almonds. Sugar-coated nuts or spices for non-
medicinal purposes marked the beginning of
confectionery in late medieval England.
As the non-medicinal applications of sugar developed,
the comfit maker, or confectioner gradually came into
being as a separate trade. In the late medieval period
the words confyt, comfect or comfit were generic
terms for all kinds of sweetmeats made from fruits, roots, or flowers preserved with sugar.
By the 16th century, a comfit was more specifically a seed, nut or small piece of spice
enclosed in a round or ovoid mass of sugar. The production of comfits was a core skill of
the early confectioner, who was known more commonly in 16th and 17th century England
as a comfit maker. Reflecting their original medicinal purpose, however, comfits were also
produced by apothecaries and directions on how to make them appear in dispensatories as
well as cookery texts. An early medieval Latin name for an apothecary was confectionaries,
and it was in this sort of sugar work that the activities of the two trades overlapped and that
the word "confectionery" originated.

Sweetening agents
Confections are defined by the presence of sweeteners. These are usually sugars, but it is
possible to buy sugar-free candies, such as sugar-free peppermints. The most common
sweetener for home cooking is table sugar, which is chemically a disaccharide containing
both glucose and fructose. Hydrolysis of sucrose gives a mixture called invert sugar, which
is sweeter and is also a common commercial ingredient. Finally, confections, especially
commercial ones, are sweetened by a variety of syrups obtained by hydrolysis of starch.
These sweeteners include all types of corn syrup.

Bakers' confectionery
Bakers' confectionery includes sweet baked goods, especially those that are served for the
dessert course. Bakers' confections are sweet foods that feature flour as a main ingredient
and are baked. Major categories include cakes, sweet pastries, doughnuts, scones, and
cookies.[15] In the Middle East and Asia, flour-based confections predominate.

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Storage and shelf life
Shelf life is largely determined by the amount of water present in the candy and the storage
conditions. High-sugar candies, such as boiled candies, can have a shelf life of many years
if kept covered in a dry environment. Spoilage of low-moisture candies tends to involve a
loss of shape, color, texture, and flavor, rather than the growth of dangerous microbes.
Impermeable packaging can reduce spoilage due to storage conditions.
Candies spoil more quickly if they have different amounts of water in different parts of the
candy (for example, a candy that combines marshmallow and nougat), or if they are stored
in high-moisture environments. This process is due to the effects of water activity, which
results in the transfer of unwanted water from a high-moisture environment into a low-
moisture candy, rendering it rubbery, or the loss of desirable water from a high-moisture
candy into a dry environment, rendering the candy dry and brittle. Another factor, affecting
only non-crystalline amorphous candies, is the glass transition process. This can cause
amorphous candies to lose their intended texture.


Cultural roles

A Japanese vendor selling sweets (Wagashi) in "The Great Buddha Sweet Shop" from the
Miyako meisho zue (ja: 都名所図会 ) (1787)
Both bakers' and sugar confections are used to offer hospitality to guests. Confections are
used to mark celebrations or events, such as a wedding cake, birthday cake or Halloween.
Tourists commonly eat confections as part of their travels. The indulgence in rich, sugary
foods is seen as a special treat, and choosing local specialties is popular. For example,
visitors to Vienna eat Sachertorte and visitors to seaside resorts in the UK eat Blackpool
rock candy. Transportable confections like fudges and tablet may be purchased as
souvenirs.

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Nutrition
Generally, confections are low in micronutrients and protein but high in calories. They may
be fat-free foods, although some confections, especially fried doughs and chocolate, are
high-fat foods. Many confections are considered empty calories. Specially formulated
chocolate has been manufactured in the past for military use as a high-density food energy
source.
Many sugar confections, especially caramel-coated popcorn and the different kinds of
sugar candy, are defined in US law as foods of minimal nutritional value.




Risks
Contaminants and coloring agents in confectionery can be particularly harmful to children.
Therefore, confectionery contaminants, such as high levels of lead, have been restricted to
1 ppm in the US. There is no specific maximum in the EU. Candy colorants, particularly
yellow colorants such as E102 Tartrazine, E104 Quinoline Yellow WS and E110 Sunset
Yellow FCF, have many restrictions around the world. Tartrazine, for example, can cause
allergic and asthmatic reactions and was once banned in Austria, Germany, and Norway.
Some countries such as the UK have asked the food industry to phase out the use of these
colorants, especially for products marketed to children.

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CHAPTER 2
Organization Profile – Cadbury


Background of Cadbury
In 1824, John Cadbury, a Quaker, began selling tea, coffee or drinking chocolate in
Bull Street in Birmingham, England. From 1831 he
moved into the production of a variety of cocoa and
drinking chocolates, made in a factory in Bridge
Street and sold mainly to the wealthy because of the
high cost of production. In 1847, John Cadbury
became a partner with his brother Benjamin and the
company became known as "Cadbury Brothers".
In 1847, Cadbury's competitor Fries of Bristol
produced the first chocolate bar (which would be mass-
produced as Fry's Chocolate Cream in 1866). Cadbury
introduced his brand of the chocolate bar in 1849, and
that same year, Cadbury and Fry's chocolate bars
were displayed publicly at a trade fair in Bingley Hall,
Birmingham.
The Cadbury brothers opened an office in London, and in 1854 they received
the Royal Warrant as manufacturers of chocolate and cocoa to Queen Victoria. The
company went into decline in the late 1850s.

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1891 advertisement
John Cadbury's sons Richard and George took over the
business in 1861. At the time of the takeover, the
business was in rapid decline: the number of
employees had reduced from 20 to 11, and the
company was losing money. By 1866, Cadbury was
profitable again. The brothers had turned around the
business by moving the focus from tea and coffee to
chocolate, and by increasing the quality of their
products.

Cadbury Factory, Bournville is located on the
south side of Birmingham, England. The firm's
first major breakthrough occurred in 1866 when
Richard and George introduced an improved
cocoa into Britain. A new cocoa press
developed in the Netherlands removed some of
the unpalatable cocoa butter from the cocoa
bean. The firm began exporting its products in
the 1850s. In 1861, the company created Fancy
Boxes — a decorated box of chocolates — and
in 1868 they were sold in boxes in the shape of
a heart for Valentine's Day. Boxes of filled
chocolates quickly became associated with the
holiday. Manufacturing their first Easter egg in
1875, Cadbury created the modern chocolate
Easter egg after developing a pure cocoa butter
that could be molded into smooth shapes.
In 1878, the brothers decided to build new premises in countryside four miles
from Birmingham. The move to the countryside was unprecedented in
business. Better transport access for milk that was inward shipped by canal,
and cocoa that was brought in by rail from London, Southampton and
Liverpool docks was taken into consideration.

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With the development of the Birmingham West Suburban Railway along the
path of the Worcester and Birmingham Canal, they acquired the Bourn brook
estate, comprising 14.5 acres (5.9 ha) of countryside 5 miles (8.0 km) south
of the outskirts of Birmingham.
Located next to the Stirchley Street railway station, which itself was opposite
the canal, they renamed the estate Bournville and opened the Bournville
factory the following year. In 1893,
George Cadbury bought 120 acres
(49 ha) of land close to the works and
planned, at his own expense, a model
village which would 'alleviate the
evils of modern more cramped living
conditions'. By 1900 the estate
included 314 cottages and houses set
on 330 acres (130 ha) of land. As the
Cadbury family were Quakers there
were no pubs in the estate.

In 1897, following the lead of Swiss companies, Cadbury introduced its own
line of milk chocolate bars. In 1899 Cadbury became a private limited
company.
1900–1969

The packing room at Bournville,
circa 1903

In 1905, Cadbury launched its Dairy Milk bar, a production of exceptional
quality with a higher proportion of milk than previous chocolate
bars. Developed by George Cadbury Jr, it was the first time a British company
had been able to mass-produce milk chocolate.

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From the beginning, it had the distinctive purple wrapper. It was a great sales
success, and became the company's bestselling product by 1914. The stronger
Bournville Cocoa line was introduced in 1906. Cadbury Dairy Milk and
Bournville Cocoa were to provide the basis for the company's rapid pre-war
expansion. In 1910, Cadbury sales overtook those of Fry for the first time.
Cadbury's Milk Tray was first produced in
1915 and continued in production throughout
the remainder of the First World War. More
than 2,000 of Cadbury's male employees
joined the British Armed Forces, and to
support the British war effort, Cadbury
provided chocolate, books and clothing to the
troops. George Cadbury handed over two
company-owned buildings for use as hospitals
– "The Beeches" and "Fircroft", and the
management of both hospitals earned the War
Office's highest award. Factory girls, dubbed
'The Cadbury Angels', volunteered to do the laundry of injured soldiers
recovering in the hospitals. After the war, the Bournville factory was
redeveloped and mass production began in earnest. In 1918, Cadbury opened
their first overseas factory in Hobart, Tasmania.

Cadbury Wharf, Knighton, Staffordshire. It was operated by Cadbury
between 1911 and 1961 to process locally collected milk and produce
"chocolate crumb" which was transported to Cadbury's in Bournville.
In 1919, Cadbury merged with J. S. Fry & Sons, another leading British
chocolate manufacturer, resulting in the integration of well-known brands
such as Fry's Chocolate Cream and Fry's Turkish Delight. In 1921, the many
small Fry's factories around Bristol were closed down, and production was
consolidated at a new Somerdale Factory, outside Bristol.

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Cadbury expanded its product range with Flake (1920), Creme
eggs (1923), Fruit and Nut (1928), and Crunchie (1929, originally under the
Fry's label). By 1930, Cadbury was the 24th-largest British manufacturing
company as measured by estimated market value of capital. Cadbury took
direct control of the under-performing Fry in 1935. Dairy Milk Whole Nut
arrived in 1933, and tins of Roses were introduced in 1938. Roses has become
a very popular Christmas (and Mother's Day) gift.

Chocolate ceased to be a luxury product and became affordable to the working
classes for the first time. By the mid-1930s, Cadbury estimated that 90 percent
of the British population could afford to buy chocolate. By 1936, Dairy Milk
accounted for 60 percent of the UK milk chocolate market.
During World War II, parts of
the Bournville factory were turned
over to war work, producing milling
machines and seats for fighter
aircraft. Workers ploughed football
fields to plant crops. As chocolate
was regarded as an essential food, it
was placed under government
supervision for the entire war. The
wartime rationing of chocolate ended in 1950, and normal production
resumed. Cadbury subsequently invested in new factories and had an
increasing demand for their products. In 1952 the Moreton factory was built.
Cadbury has been a holder of a Royal Warrant from Queen Elizabeth II since
1955.

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Schweppes merger (1969)

Cadbury merged with drinks company Schweppes to form Cadbury
Schweppes in 1969. Head of Schweppes, Lord Watkinson, became chairman,
and Adrian Cadbury became deputy chairman and managing director. The
benefits of the merger were to prove elusive.

The merger put an end to Cadbury's close links to its Quaker founding family
and its perceived social ethos by instilling a capitalist venture philosophy in
management.

In 1978, the company acquired Peter Paul, the third largest chocolate
manufacturer in the United States for $58 million, which gave it a 10 percent
share of the world's largest confectionery market. The highly
successful Wispa chocolate bar was launched in the North East of England in
1981, and nationwide in 1984. In 1982, trading profits were greater outside of
Britain than in the UK for the first time.

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In 1986, Cadbury Schweppes sold its Beverages and Foods division to
a management buyout known as Premier Brands for £97 million. This saw the
company divest itself of such brands as Typhoo
Tea, Kenco, Smash and Hartley Chivers jam. The deal also saw Premier take
the license for production of Cadbury brand biscuits and drinking chocolate.
Meanwhile, Schweppes switched its alliance in the UK from Pepsi to Coca-
Cola, taking a 51 percent stake in the joint venture Coca-Cola Schweppes. The
acquisition of Canada Dry doubled its worldwide drinks market share, and it
took a 30 percent stake in Dr Pepper. As a result of these acquisitions,
Cadbury Schweppes became the third largest soft drinks manufacturer in the
world. In August 1988, the company sold its U.S. confectionery operations
to Hershey's for $284.5 million cash plus the assumption of $30 million in
debt.

In 1999, Cadbury Schweppes sold its worldwide beverage businesses to The
Coca-Cola Company except in North America and continental Europe for
$700 million.


Snapple, Mistic and Stewart's (formerly Cable Car Beverage) were sold
by Triarc to Cadbury Schweppes in 2000 for $1.45 billion. In October of that
same year, Cadbury Schweppes purchased Royal Crown from Triarc. In
2003, Cadbury Schweppes acquired Adams, the US chewing gum operations
of Pfizer Inc., for $4.2 billion, making Cadbury the world's biggest

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confectionary company. In 2005, Cadbury Schweppes acquired Green &
Black's for £20 million.

Schweppes demerger
In March 2007, it was revealed that Cadbury Schweppes was planning to split
its business into two separate entities: one focusing on its main chocolate and
confectionery market; the other on its US drinks business. The demerger took
effect on 2 May 2008, with the drinks business becoming Dr Pepper Snapple
Group and Cadbury Schweppes plc becoming Cadbury plc. In December
2008 it was announced that Cadbury was to sell its Australian beverage unit
to Asahi Breweries.
2007–2010

In October 2007, Cadbury announced the closure of the Somerdale Factory,
in Keynsham, Somerset, formerly part of Fry's. Between 500 and 700 jobs
were affected by this change. Production transferred to other plants in England
and Poland.

In mid-2009, Cadbury replaced some of the cocoa butter in their non-UK
chocolate products with palm oil. Despite stating this was a response to
consumer demand to improve taste and texture, there was no "new improved
recipe" claim placed on New Zealand labels. Consumer backlash was
significant from environmentalists and chocolate lovers in both Australia and
New Zealand, with consumers objecting to both the taste from the cheaper
formulation, and the use of palm oil given its role in the destruction of
rainforests. In addition, Cadbury stated they would source cocoa beans
through Fair Trade channels. In January 2010 prospective buyer Kraft
pledged to honor Cadbury's commitment.

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Acquisition and subsidiary (2009-)

On 7 September 2009, Kraft Foods made a £10.2 billion (US$16.2 billion)
indicative takeover bid for Cadbury. The offer was rejected, with Cadbury
stating that it undervalued the company. Kraft launched a formal, hostile bid
for Cadbury, valuing the firm at £9.8 billion on 9 November 2009. The
UK Business Secretary Peter Mandelson warned Kraft not to try to "make a
quick buck" from the acquisition of Cadbury.

On 19 January 2010, it was announced that Cadbury and Kraft Foods had
reached a deal and that Kraft would purchase Cadbury for £8.40 per share,
valuing Cadbury at £11.5bn (US$18.9bn). Kraft, which issued a statement
stating that the deal will create a "global confectionery leader", had to borrow
£7 billion (US$11.5bn) in order to finance the takeover.

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The Hershey Company, based in Pennsylvania, manufactures and distributes
Cadbury-branded chocolate (but not its other confectionery) in the United
States and has been reported to share Cadbury's "ethos". Hershey had
expressed an interest in buying Cadbury because it would broaden its access
to faster-growing international markets.

The acquisition of Cadbury faced widespread disapproval from the British
public, as well as groups and organizations including trade union Unite, who
fought against the acquisition of the company which, according to Prime
Minister Gordon Brown, was very important to the British economy. Unite
estimated that a takeover by Kraft could put 30,000 jobs "at risk", and UK
shareholders protested over the mergers and acquisitions advisory fees
charged by banks. Cadbury's M&A advisers were UBS, Goldman
Sachs and Morgan Stanley.

Cadbury World exhibition at the Library of Birmingham, July 2016. A tribute
to Shakespeare (born 22 miles south east of the city), Shakespeare's
Globe theatre (left) and a manuscript are made from Cadbury chocolate.

On 2 February 2010, Kraft secured over 71%
of Cadbury's shares thus finalizing the
deal. Kraft had needed to reach 75% of the
shares in order to be able to delist Cadbury
from the stock market and fully integrate it as
part of Kraft. This was achieved on 5
February, and the company announced that
Cadbury shares would be de-listed on 8
March.

On 3 February, the Chairman Roger Carr, chief executive Todd Stitzer and
chief financial officer Andrew Bonfield all announced their resignations.
Stitzer had worked at the company for 27 years. On 9 February, Kraft
announced that they were planning to close the Somerdale
Factory, Keynsham, with the loss of 400 jobs. The management explained
that existing plans to move production to Poland were too advanced to be
realistically reversed, though assurances had been given regarding sustaining
the plant.

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The European Commission decided that Kraft would have to divest Cadbury's
confectionery businesses in Poland (Wedel) and Romania (Kandia). In June
2010, the Polish division, Cadbury-Wedel, was sold to Lotte of Korea. As part
of the deal Kraft kept the Cadbury, Hall's and other brands along with two
plants in Skarbimierz. Lotte took over the plant in Warsaw along with the E
Wedel brand. Kandia was sold back to the Menial family, which had owned
the brand from 2003 to 2007.



In response to diminishing margins in early 2014, Mondelez
hired Accenture to implement a US$3 billion cost-cutting program of the
company's assets including Cadbury and Oreo.

The closure of Cadbury factories in centers such
as Dublin, Montreal, Chicago, Philadelphia, and Dunedin in New Zealand
generated outcries from the local populations. The plan received approval
from several market shareholders including the Australian and New Zealand
banks Westpac and ASB Bank.

Nature of Business:


Confectionery
Industry

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Vision mission, quality policy


“Working together to create brands people love”

A vision statement reveals the ideal image of the organization in the future. Vision is an
important point in corporate strategic plan and is bound to be on time. It communicates
both the value and purpose of organization. Vision is intended to give directions to
employees about how they should behave and inspires them to give their best. A vision
when shared with customers can help shape a customer’s understanding of why they should
work with the organization.



“Says simply, ‘Cadbury means quality’; this is our promise. Our reputation is to build upon
quality; our commitment to continuous improvement will ensure that our promise”

Mission statement defines an organization primary objective and its key purpose. Its prime
function is internal – to define the key measure or measures of the organization’s success
– and its prime listeners are the leadership team and stockholders. Mission statements are
the starting points of an organization’s strategic planning and goal setting process. They
try to assure and focus the attention on both the external and internal stakeholders to
understand and know what organization is trying to accomplish.

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Cadbury Dairy Milk main aim and objective is to become world best and biggest
confectionery company. The company is really keen to perform better than the competitors.
Cadbury Dairy Milk is among the leading companies of the world.
 Objectives are the ends toward which activity is aimed-they are the end results to ward
which activity is aimed.
 “Objectives are goals, aims or purposes that organizations wish over varying periods
of time”-McFarland
 “A managerial objective is the intended goal that prescribes definite scope and suggests
direction to the planning efforts of a manger”-Terry and Franklin




Market high quality, excellent value products that consistently meet business requirements
and comply with local standards, but continuously improve and exceed the expectations of
consumers. It ensures that customers and consumers first become actively listening and
understanding their expectations for quality and value points of purchase and consumption.
Ensure that the representation of corporate image, including products and brands, meet the
recognized standards, strengthen the commitment to quality and to safeguard the reputation
of Cadbury. Preserve the “right best time” before culture, which continues to absorb the
food quality and safety, where everyone understands their responsibilities and
accountability. Use a quality system is monitored continuously improves processes to
provide these policies and standards.

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Workflow model


Product/service profile

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Indian Chocolate Markets
 India is the world's fastest growing market for chocolates.
 Registering 15% annual growth between 2008 and 2012.
 The Indian chocolate market is worth around Rs 5,562 crore.
 400 Kgs of chocolate consumption in India per minutes.
 Low priced unit packs, increased distribution reach and new product launches can
be said to have fueled this growth.

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Major Achievements of Cadbury
 Worlds No 1 Confectionery company
 Worlds No 2 Gums company.
 Worlds No 3 Beverage company.
 Cadbury Dairy Milk & Bournvita have been declared a "Consumer Super brand" for
2006-07 by Super brands India.
 Cadbury India has been ranked 5th in the FMCG sector, in a survey on India’s most
respected companies by sector conducted by Business World magazine in 2007.
 Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG
company in India in 2008, by the Great Place to Work Institute.
 Asian Marketing Effectiveness Awards 2008 for Bournvita Folk/Fusion campaign -
GOLD award for the "Best Insights and Strategic Thinking" and SILVER award for
the Most Effective Use of Advertising.


Future Plans
Cadbury India expects strong growth in India in future. The company plans to increase the
franchise of its existing brands and continue to explore new product opportunities including
adjacent market opportunities. Cadbury India is also looking for more opportunities in the
SAARC region.

Cadbury India Ltd.: At a glance
 Cadbury: No.1 confectionery and third largest soft drinks company in the world.
Presence across 200 countries. 55,000 employees worldwide
 Cadbury in India: Presence for over 50 years. Market leader in the chocolate
confectionery market.
 Factors for success: extensive distribution network, strong brands, customization to
Indian market.
 For Cadbury, India is: huge potential market, source of managerial talent
 Future plans, India: To explore larger portfolio for growth. To look for opportunities in
 Cadbury Full of Life
 Cadbury as a company is vibrant.
 Cadbury is a fun and energizing workplace.
 Cadbury is robust and alive.

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Scope of the Projects
The project was done to finding a reason of the fewer customers base of some
unconventional outlets. The project will help to know about the state of mind of outlets
owner who are selling the Cadbury products and Find out the influential factor in the
movement of product. The Company will also be benefited as the Company will know
which type of supports the outlet’s owners want from the company, where they are lacking,
so that the company can cope with it.

Cadbury: Case Study Analysis

Introduction to Case

Cadbury is a brand which almost everyone knows. Even after completion of more than 100
years, the brand is into hearts of many people & it also leaves a significant mark amidst all
the competition. Cadbury stands tall in food product sector. Cadbury is world’s leader in
chocolates and it is also one of the topmost FMCG brands in India. Cadbury decided to
enter Indian market in 1948. Cadbury India began its operations in India by importing
chocolates. On 19th July 1948 Cadbury was incorporated in India. Cadbury has a share of
over 67% in the market, which is the highest Cadbury brand share globally. Cadbury now
has 5 manufacturing units all over India. Cadbury operates in India with following
categories of products: Chocolate, Confectionery, Beverages, Biscuits and Candy. Cadbury
was performing very well since its incorporation in India But, suddenly in 2003 Cadbury
came across a problem of worms.

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In 2003, just a month before Diwali few instances of worms in its Dairy Milk Bars were
reported in Maharashtra. In eight outlets across Maharashtra worms were found. In October
2003, customers in Mumbai complained about finding worms in Cadbury Dairy Milk Bars.



Problems Faced by Cadbury:

When these worms were found in some of the dairy milk bars, Maharashtra Food and Drugs
Administration responded quickly to this case and it seized the stocks of chocolate bars
which were manufactured in Cadbury’s Pune Plant.

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Cadbury in defense issued a statement where it mentioned that problem of worms was not
at the manufacturing stage but the problem arose due to poor storage facility by the
retailers. FDA denied the statement made by Cadbury. FDA Commissioner Uttam
Khobragade came up with a statement saying “It was presumed that worms got into it at
the storage level, but then what about the packing – packaging was not proper or airtight,
either ways it’s a manufacturing defect with unhygienic conditions or improper
packaging.”

Then there were many allegations and counter allegations between Cadbury and FDA. Due
to this event reputation of Cadbury was hampered. Cadbury sales went down by 30% which
they had expected to increase by 15% due to negative publicity. For the first time,
Cadbury’s Advertisements went off air for one and a half months after the Diwali due to
this controversy

Recovery Strategy:

Project Vishwas:

Cadbury was losing on its sales and also reputation was being hampered. So, recovering
from this type of situation was a challenge for Cadbury. In the month of October only
Cadbury launched Public Relations (PR) campaign ‘Vishwas’ which was an education
initiative covering 190,000 retailers in key states.

Project Vishwas, a three-pronged program that addressed the trade, consumers, media and
employees. The project incorporated the following measures:

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For Trade

A retail monitoring and education program was launched in which quality checks at over
50,000 retail outlets and educated 190,000 wholesalers and retailers was done regarding
storage requirements. A press ad regarding ‘Facts about Cadbury’ was also published by
Cadbury nationally in 55 trade publications which were about channel members taking
remedial measures in the company. Posters and leaflets on the issue were also distributed
to retailers, encouraging them to share them with consumers.

For Media

The point-of-view of a company was explained to media, media was also given updates
about actions initiated by the company, and encouraged to share them with consumers.
The company instituted a media desk and diligently answered every media query, friendly
or not. The company’s managing director urged media to assure consumers that Cadbury
was safe to eat, but that consumers exercise the usual care in purchasing a chocolate that
they exercise in purchasing a food item.
Furthermore, it also promised to implement packaging changes within two months to
ensure against poor storage. Cadbury’s MD and key spokespersons had one-to-one sessions
with 31 media editors as part of an ‘Outreach’ program initiated in November 2003.

For Employees

Employees were also briefed about actions taken through meetings with senior managers
and email updates from the MD.

Change in Packaging:

January 2004, the company launched a new double packaging that was able to wrap even
the smallest 13 gm chocolate in an aluminum foil, heat-sealed for complete protection from
all sides and further encased in a poly flow pack. The over-engineered pack, the first of its
kind in India, cost a lot to a company, but fulfilled the company’s promise to consumers
and media. By investing up to Rs 15 crore (Rs 150 million) on imported machinery,
Cadbury’s revamped the packaging of Dairy Milk. The metallic poly-flow was costlier by
10-15 per cent, but Cadbury didn’t hike the pack price.

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The new packaging was launched in a media conference. In a conference comparison kits
were distributed. These kits were useful in comparing old packs and new packs. A video
with packaging and factory shots for television coverage was also launched.

Ad Campaign:

Just after changing packaging Cadbury roped in Amitabh Bachchan as a brand ambassador.
From the month January to March 2004, Cadbury came up with a strong Ad campaign
which helped them to get back the consumer confidence. During this period Advertising
expenses went up by 15% but it really helped Cadbury to get back its reputation.



Current Situation:

After that Incident Cadbury now takes great care of all the products they have. Cadbury is
currently leading the market in chocolates segment. Market share of the Cadbury Dairy
Milk is around 35% in India. Cadbury has not faced any controversy related to products
after that incident.

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CHAPTER 3
Mckensy’s 7S framework and Porter's Five Force Model

The McKinsey’s 7s model has been applied to Cadburys.

STRATEGY: A method or plan chosen to bring about a desired future, such as
achievement of a goal or solution to a problem. (BusinessDictionary.com, 2018) Cadburys
have developed the products with the help of behavioral, demographic and psychographic
factors (Singh 2013). For effective growth of the company, Cadburys has also adopted
strategies related to effective distribution and brand equity to gain a competitive edge in
the market.

SKILLS: An ability and capacity acquired through deliberate, systematic, and sustained
effort to smoothly and adaptively carryout complex activities or job functions involving
ideas (cognitive skills), things (technical skills), and/or people (interpersonal skills) For
Cadburys to gain valuable feedback, the skills and members of the R&D team need to be
integrated with the geographical divisions. Cadburys needs to reallocate its technological
staff to implement innovative ideas.

STRUCTURE: A business structure is a category of organization that is legally recognized
in a given jurisdiction and characterized by the legal definition of that particular category.
(WhatIs.com, 2018) Cadburys has restructured their organizational structure and divided
them into global scale and regional scale.

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This allows regional managers to control the factors related to their specific region. To
ensure that the operations are managed at their peak efficiency, Cadburys has adopted
a decentralized organization. Due to their presence in different regions and their sales
structure of multiple brands and products, the decentralized structure works best for this
particular organization. Cadburys have a head office to give a direction to the company.
Other than that, Cadburys has a number of regional offices to meet specific consumer
demands.

STYLE: Characteristics or elements combined and expressed in a particular (often unique)
and consistent manner. Derived from ‘stilus,’ the Latin word for a sharp instrument for
making relatively permanent marks on clay or wax writing
tablets. (BusinessDictionary.com, 2018) Cadburys has adopted three unique styles for
giving its company a direction and vision. Cadburys emphasizes one company, one team
and one passion as its operational style. One company emphasizes the cooperative efforts
of all the staff members of Cadburys.

STAFF: The entire group of employees who work at a company. (BusinessDictionary.com,
2018) Cadburys has always encouraged its employees to grow with the company. To
increase employee satisfaction and lower turnover rates, Cadburys provides its employees
with attractive incentives.

SYSTEMS: A set of detailed methods, procedures and routines created to carry out a
specific activity, perform a duty, or solve a problem. (BusinessDictionary.com, 2018)
Cadburys has reduced its inventory cost to 200000$ with the help of JIT product line. With
reduced stock holdings, Cadburys has cut down the assembly system timing.

SHARED VALUES: Shared value is not social responsibility, philanthropy, or
sustainability, but a new way for companies to achieve economic success Cadburys has
adopted some shared values that defines the main vision of the company. One of its shared
value is to create a brand that people love. Working together is essential. The other shared
value is to deliver quality products to its prospective customers.

CONCLUSION
As we can see the above report there are some great strengths that Cadbury has that will
help to continues its expansion and market share, it’s a massive company that is renowned
and well known chocolate brand and has been around for many years, so it has good
experience, also it has a good reputation and easy access to distribution network . on the
other hand, the company needs to make sure it understands the health issue in its product
with high sugar as more people are health aware these days, and finally the Boast Guarana
is not suitable for your children and pregnant women this needs to be address by Cadbury

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Porter's Five Force Model

Five Forces model of Porter is a strategy tool that is used to make an analysis of the
attractiveness of an industry structure. The Competitive Forces analysis is made by the
identification of 5 fundamental competitive forces:

Entry of competitors: The entry of competitors will be difficult because there are already
well-established companies within this market these include, mars, nestle, Ferrero, Kraft,
Hershey’s and Lindt. These companies dominate the confectionary market with their own
particular types of chocolates.

Threat of substitutes: The main threat of substitutes which Cadbury’s and any other
confectionary brand is the supermarket own brands this is because they tend to copycat
popular chocolates for example nestle Kit Kat and provide their own brand on the shelves
at a cheaper price.

Bargaining power of buyers: For Cadbury’s they have a large buying power being one of
the largest confectionary producers in the world, but this may be threatened due to the June
2006 recall of chocolate bars which contained salmonella this has been said to affect
Cadbury’s and should lose some of their buying power. However, Cadbury’s buyers are
scattered all around the world and they are in billions. The price subjectivity of the products
is not a question for the people but the increasing number of competitors that offers the
same type of products at a lower cost might be the cause of customer loyalty alteration.

It has a large purchasing power and the suppliers of agricultural commodities offer a
product that is far from unique and hence Cadbury has higher bargaining power than its
suppliers as the industry relies heavily on a complex ago business supply chain. Although
there is an existing competition, raw materials like nuts, milk, cocoa or special ingredients
are sufficient enough to satisfy Cadbury’s production. Cadbury’s have the main power over
its suppliers because they are so large companies supplying them need their business so
Cadbury’s can use economies of scale and buy their raw materials for cheaper and more in
bulk than a medium sized business could.

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Rivalry among the existing players: Many businesses are competing against Cadbury and
planning to take over the supremacy the company has for several years. Several
competitors are continuously developing their products and innovating ideas to make
competing even harder. Companies such as Nestle, Hershey’s, Ferrero etc. are Cadbury’s
main rivals because they are also long-established confectionary brands and like Cadbury
are developing new ranges of products new promotions. Rivalry will always be strong
among these companies because they sell from the same types of stores and their products
are similar in some respects.

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Market Study

Market Share
By participant, the market is relatively fragmented, with the five largest confectionery
companies accounting for around 40% of the market. There are a large number of
companies which participate in the markets only a regional or local basis. Cadbury compete
against multinational, regional and national companies.

The graph shows that Cadbury is the second highest of the total confectionery in the market
share. Halls is the largest brands in candy of Cadbury. Cadbury have number one and
number two confectionery market position in 20 of the world’s 50 largest confectionery
markets by retail sales value.

Financial statement
The graph shows the financial situation of Cadbury from 2006 to 2009. As we can see in
the graph, the revenue is reached ¿¡5975 million is year 2009 which is slightly increase
about 5% from year 2008. In operating income, year 2009 is the highest compare to
previous year which is ¿¡507 million. Last but not least, year 2009 having 9% of the
operating margin which is slightly increase from year 2008. As a conclusion, In year 2009,

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the performance is pretty well compare to the previous year due to there a keep increase
since year 2006 to 2009.

PESTLE implication
Political
The political deals with government influence. The main laws that will affect Cadbury’s
are the consumer protection law. These are the laws and the recent changes in food labeling.
The food labeling shouldn’t be too influence as Cadbury’s has label all their goods properly
to begin with. Change in manufacturing law will also greatly influence Cadbury’s as the
company may have to change the way to product the cereal. This could lead to the
introduction of new mechanical equipment being required or more thorough checks on the
current equipment. If new equipment is required if could prove to be very expensive.

 The Weight and Measures Act, this act should not affect Cadbury’s since the
company have all the equipment and scales used should already be at that of the
highest standard.

 The Trade Description Act, this again should not affect Cadbury’s due to all the
labeling on the products should be correct and thorough giving all the ingredients.

 The Sale of Good Act, these state that Cadbury’s should not mislead the consumer.
These are currently three conditions. If the government was to introduce a few more
it could prove to affect Cadbury’s.


Economic
The state of the economy is the main factor. It the country was to go into recession the
consumer spending would also drop due to the unemployment. The recession would bring

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down the sales of a lot of goods mainly the expensive things, which are not necessity. The
current economy is well. The interest rates are low and consumer spending is very high.
Other economic factor that could affect Cadbury’s launching a product would be a rise in
inflation. This is a rise in price over time.

Social
If the population size decreased then Cadbury’s be less people to buy the products therefore
less profit. · If peoples lifestyles changed. For example, nowadays more people wanting to
get fit and lose weight, then they will stop eating chocolate and spend their money on gym
memberships and others. This means that Cadburys profits will decrease.

Technological
An increase in capital expenditure will affect Cadbury’s. For example, more up to date
equipment would mean that the goods where produced quicker and cheaper but would also
result in job losses. In research and development, keep developing new products to keep
up with competition and customer needs.

Legal
More legislation in place to make sure that the workplace is safe and the worker is better
protected. Expensive costs to Cadburys to implement

Environment
Cadbury launched a corporate social responsibility Web site called DearCadbury.com,
which provides consumers information on ethical sourcing, responsible consumption and
the environment. The site features Cadbury’s 2007/08 Corporate Responsibility and
Sustainability report, which revealed that the company has reduced carbon emissions
almost 4 % to date; Cadbury is aiming for a 10 % reduction by 2010. As part of Cadbury’s
“Purple Goes Green” program, the company committed to a 50 % absolute reduction in
carbon emissions by 2020. Cadbury also reported that it has met its 2007 goal of reducing
water use by 10 %

Competitor’s situation and SWOT analysis

Cadbury’s major competitors are Thorntons, Lindt, Lindor, Nestle, Master food (Mars) and
others. They are competing directly with Cadbury. Nestle is one of the Cadbury’s main
competitor in the market.

Nestle is one of the world’s largest food manufacturer, Nestlé’s headquarters in
Switzerland and based in 200 countries worldwide. It is renowned as the world’s leading
nutrition and health based company. Nestle grows is product line through innovation as

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well as renovation and maintains a balance on its geo-environmental activities and product
lines. They have 253,000 employees around the world.


Marketing strategy

Product
Cadbury dairy milk is made from real chocolate. The ingredients for
the chocolate are cocoa butter and there is a glass and half full cream
daily milk in every 200 grams of Cadbury daily milk chocolate.
Cadbury purchase 65 million liters of fresh milk each year to make
Cadbury daily milk chocolate.

Price
Price is very important in the marketing mix. The price
changed for a chocolate bar can be affect whether a consumer
will buy it and the level of sales can determine whether or not
Cadbury Schweppes will make a profit. Price is also can be
affected by factors such as the state of economy, what
competitor are doing. The stage reached in product life cycle
and above all what price the market will accept. Form the
marketing point of view this is what matters.

Place
Cadbury products are produced at the chocolate factory in
Bourneville in Birmingham. After the chocolate is
produced, it will go through all quality check and
transported to the stockrooms. The following, Cadbury sells
the products to shops that deal with beverage and
confectionery such as convenient store, super store, petrol
station, and others. This kind of distributions can make
consumer easy to find the product.

Promotion
The purpose of promotion is to communicate directly with
potential or existing customer, in order to encourage them to
purchase dairy milk and recommend it to others. There is
various ways to promote the product such as TV
advertisement, banner on the internet, magazine and
newspapers.

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CHAPTER – 4
SWOT ANALYSIS

SWOT analysis is a strategic planning technique used to help a person or organization
identify strengths, weaknesses, opportunities, and threats related to business competition
or project planning.

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CHAPTER – 5
Analysis of financial statements

CADBURY Income Statement
Name 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15
Total Revenue 39,326.81 35,973.48 33,079.45 29,979.41 27,825.19
Revenue 39,326.81 35,973.48 33,079.45 29,979.41 27,825.19
Other Revenue, Total - - - -
Cost of Revenue, Total 31,001.21 28,017.41 25,644.31 23,119.01 18,894.97
Gross Profit 8,325.60 7,956.07 7,435.13 6,860.40 8,930.23
Total Operating Expenses 37,973.20 34,275.18 32,368.08 30,712.26 26,404.58
Selling/General/Admin. Expenses, Total 7,059.12 6,277.96 6,823.11 7,654.56 7,530.87
Research & Development - - - -
Interest Expense (Income) - Net
Operating - - - -
Unusual Expense (Income) -9.17 -7.51 -76.79 - -
Other Operating Expenses, Total -77.96 -12.68 -22.54 -61.3 -21.26
Operating Income 1,353.61 1,698.29 711.37 -732.85 1,420.62
Interest Income (Expense), Net Non-
Operating 185.27 -475.46 -361.05 169.98 156.8
Gain (Loss) on Sale of Assets - - - -
Other, Net - - - -
Net Income Before Taxes 1,538.88 1,222.83 350.32 -562.87 1,577.41
Provision for Income Taxes 468.03 399.75 50.32 -266.47 424.12
Net Income After Taxes 1,070.85 823.09 300 -296.4 1,153.30
Minority Interest - - - -
Equity in Affiliates - - - -
U.S GAAP Adjustment - - - -
Net Income Before Extraordinary Items 1,070.85 823.09 300 -296.4 1,153.30
Total Extraordinary Items - - - -
Net Income 1,070.85 823.09 300 -296.4 1,153.30
Total Adjustments to Net Income - - - -
Income Available to Common Excluding
Extraordinary Items 1,070.85 823.09 300 -296.4 1,153.30
Dilution Adjustment - - - -
Diluted Net Income 1,070.85 823.09 300 -296.4 1,153.30
Diluted Weighted Average Shares 1,878.20 1,878.20 1,878.20 1,878.20 1,878.20
Diluted EPS Excluding Extraordinary
Items 0.57 0.44 0.16 -0.16 0.61
DPS - Common Stock Primary Issue 0.49 0.25 0 0.01 0.01
Diluted Normalized EPS 0.57 0.44 0.3 -0.06 0.69

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CADBURY Balance Sheet

Name 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 31-Dec-15
Total Current Assets 15,174.04 14,029.12 14,240.36 13,808.07 12,744.98
Cash and Short-Term Investments 4,429.22 4,090.20 2,598.02 3,011.31 5,408.22
Cash 4,429.22 4,090.20 2,598.02 3,011.31 5,408.22
Cash & Equivalents 4,429.22 2,598.02 - - -
Short Term Investments - - - -
Total Receivables, Net 4,529.67 3,770.17 4,890.32 4,952.65 5,166.19
Accounts Receivables - Trade, Net 4,078.44 2,952.43 3,932.57 4,367.30 3,667.11
Total Inventory 6,062.63 5,865.10 6,252.37 5,020.94 1,936.45
Prepaid Expenses 152.52 303.64 499.66 823.17 234.12
Other Current Assets, Total - - - -

Total Assets 28,801.94 27,528.04 28,423.12 28,392.95 28,417.01
Property/Plant/Equipment, Total -
Net 13,483.39 13,291.15 13,882.12 14,187.44 15,365.66
Property/Plant/Equipment, Total -
Gross 30,377.90 29,322.01 28,667.26 27,783.19 27,647.22
Accumulated Depreciation, Total -16,894.51 -16,030.86 -14,785.14 -13,595.76 -12,281.57
Goodwill, Net - - - -
Intangibles, Net 144.51 207.77 300.63 397.44 283.22
Long Term Investments - - - -
Note Receivable - Long Term - - - -
Other Long-Term Assets, Total 0 0 23.15 - -
Other Assets, Total - - - -

Total Current Liabilities 9,901.39 10,085.40 12,529.59 12,820.28 11,651.63
Accounts Payable 4,871.27 5,023.22 3,287.23 4,164.47 3,407.76
Payable/Accrued 9,684.51 - - - -
Accrued Expenses 2,326.94 2,198.14 3,601.52 3,693.84 4,755.25
Notes Payable/Short Term Debt 0 836.51 3,599.76 151.37 0
Current Port. of LT Debt/Capital
Leases 0.56 - - - -
Other Current liabilities, Total 2,702.62 2,027.54 2,041.08 4,810.61 3,488.62

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Total Liabilities 15,235.70 14,851.89 16,680.33 17,336.22 16,131.71
Total Long-Term Debt 5.8 0 0 0 0
Long Term Debt - - - -
Capital Lease Obligations 5.8 - - - -
Deferred Income Tax 884.87 734.38 290.02 187.71 348.29
Minority Interest - - - -
Other Liabilities, Total 4,443.64 4,032.11 3,860.72 4,328.23 4,131.78

Total Equity 13,566.24 12,676.15 11,742.79 11,056.73 12,285.30
Redeemable Preferred Stock,
Total - - - -
Preferred Stock - Non-
Redeemable, Net - - - -
Common Stock, Total 939.1 939.1 939.1 939.1 939.1
Additional Paid-In Capital 272.34 272.34 272.34 272.34 272.34
Retained Earnings (Accumulated
Deficit) 12,264.90 11,401.77 10,481.65 9,802.66 11,043.59
Treasury Stock - Common - - - -
ESOP Debt Guarantee 89.89 62.93 49.7 42.63 30.27
Unrealized Gain (Loss) - - - -
Other Equity, Total - - - -

Total Liabilities & Shareholders'
Equity 28,801.94 27,528.04 28,423.12 28,392.95 28,417.01
Total Common Shares Outstanding 1,878.20 1,878.20 1,878.20 1,878.20 1,878.20
Total Preferred Shares Outstanding - - - -

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CADBURY Cash Flow Statement


Name 30-Jun-20 31-Mar-20 31-Dec-19 30-Sep-19 30-Jun-19
Net Income/Starting Line 766.66 912.76 1,538.88 648.03 669.94
Cash from Operating Activities 3,181.72 271.73 2,285.90 2,160.59 -418.06
Depreciation/Depletion 804.89 401.31 1,581.01 1,175.20 783.23
Amortization - - - -
Deferred Taxes - - - -
Non-Cash Items -100.78 -73.27 771.72 167.44 224.51
Cash Receipts - - - -
Cash Payments - - - -
Cash Taxes Paid 283.36 2.33 196.82 196.82 196.82
Cash Interest Paid 0 0 0 - -
Changes in Working Capital 1,710.96 -969.08 -1,605.71 169.93 -2,095.73
Cash from Investing Activities -146.3 -169.55 -1,515.54 -837.18 -315.38
Capital Expenditures -251.39 -246.5 -1,752.40 -969.2 -399.47
Other Investing Cash Flow Items,
Total 105.09 76.95 236.86 132.03 84.09
Cash from Financing Activities -928.06 1.06 -431.34 -471.43 -471.43
Financing Cash Flow Items 0 0 0 0 -
Total Cash Dividends Paid -912.26 0 -437.15 -471.43 -471.43
Issuance (Retirement) of Stock,
Net - - - -
Issuance (Retirement) of Debt,
Net -15.8 1.06 5.8 0 0
Foreign Exchange Effects - - - -
Net Change in Cash 2,107.37 103.24 339.01 851.99 -1,204.87
Beginning Cash Balance 8,519.43 4,090.20 4,090.21 - -
Ending Cash Balance 8,858.44 4,942.19 2,885.34 - -
Free Cash Flow 533.5 1,191.39 -817.53 - -
Free Cash Flow Growth -55.22% 245.73% -65.51% - -
Free Cash Flow Yield 3.39% 7.01% -4.22% - -

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CHAPTER – 6
Learning experience.

1. About Organization and Industry
2. Back ground,
3. Nature of business,
4. Vision mission, quality policy
5. Workflow model
6. Product/service profile
7. Ownership pattern
8. Achievements/awards if any
9. Future growth and prospects
10. McKenzie’s 7S framework
11. Porter's Five Force Model
12. Case Study
13. SWOT Analysis
14. Analysis of financial statements
15. Market Study

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REMARKS AND SUGGETIONS