Cadbury Strategy

Topics: Chocolate, Cadbury plc, Cadbury Dairy Milk Pages: 5 (1577 words) Published: November 8, 2010
Cadbury India- Study in strategy
Cadbury is India’s biggest player in the field of chocolates, cocoa products and confectionary items. The company has a loyal consumer base and market defining products in many categories. Some of its brands such as “dairy milk” are referred to as the ‘gold standard’ in its field and it dominates the market share with products like Bournvita amongst its sizable brand arsenal. Introduction

Cadbury was originally incorporated as a wholly owned subsidiary of Cadbury Schweppes Overseas Ltd (CSOL) in 1948. The company’s original name was Cadbury Fry (India) Ltd. In 1978, CSOL diluted its equity stake to 40% to comply with FERA guidelines. In 1982, the name was changed to Hindustan Cocoa Products. CSOL’s shareholding was increased to 51% in Jan ’83 through a preferential rights issue of Rs700mm. The current name was restored in Dec ’89. In 2001, Cadbury Schweppes made an open offer to acquire the 49% public holding in the company. The parent holds over 90% of the equity capital after the first open offer. A second open offer has been made to buyback the balance shareholding, after which the company would operate as a 100% subsidiary of Cadbury Schweppes Plc Ever since the Cadbury is in India in 1947, Cadbury chocolates have ruled the hearts of Indians with their fabulous taste. The company today employs nearly 2000 people across India. Its one of the oldest and strongest players in the Indian confectionary industry with an estimated 68 per cent value share and 62 per cent volume share of the total chocolate market. It has exhibited continuously strong revenue growth of 34 per cent and net profit growth of 24 per cent throughout the 1990’s. Cadbury Schweppes

Cadbury Schweppes is the biggest international beverage and confectionery companies in the world and has a strong regional presence in beverages in the Americas and Australia. With origins stretching back over 200 years, today their products – which include brands such as Cadbury, Schweppes, Halls, Trident, Dr pepper, Snapple, Trebor, Dentyne, Bubblicious and Bassett are enjoyed in almost every country around the world. The company employs over 70,000 people worldwide. Concentrating on their core brands in beverages and confectionery since the 1980s, the company has strengthened their portfolio through almost fifty acquisitions, including brand icons such as Mott’s , Canada Dry, Halls, Trident, Dentyne, Bubblicious, Trebor, Bassett, Dr Pepper, 7 Up and Sapple On 15th March 2007, the company announced that it intended to separate its confectionery and Americas Beverages Business and this process is currently underway.In May 2008, the demerger of Cadbury and Schweppes took place and “Big Purple” emerged known as Cadbury Plc.

Kraft Takeover of Cadbury
On 19th January, 2010 an agreement was reached between Kraft Foods and Cadbury on an £11.5bn takeover of the 200 year old British confectioner. fter a six month battle, Cadbury's board has - in fraught negotiating overnight - accepted a bid price of 840p per share, valuing the business at £11.5bn. Uniting Kraft, maker of Oreo cookies and Ritz crackers, with the producer of Trident gum and Dairy Milk chocolates, would create a global food giant with more than $50 billion in revenue and a big presence in markets from the United States to India. The Kraft-Cadbury combination brings together Cadbury's Dairy Milk chocolate, Halls cough drops and Trident gum with Kraft's portfolio of Milka and Toblerone chocolates, Oreo cookies, Maxwell House coffee and Philadelphia cream cheese. Cadbury's annual sales are only one-fifth of Kraft's, but the British group will contribute to growth in a combined company with more than $50 billion in sales. Kraft will still be the No. 2 food group after Nestle but will edge past Mars Inc to be the world's top confectioner. Kraft struck a deal to buy Cadbury on January 19 in an offer that valued Cadbury shares at 840 pence each, with 60...
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