A multinational company of Kraft Foods is an American firm doing the business for food and beverage. It produces belong to a global markets and has many brands that over 170 countries (Kraft Foods, 2011). And its brands are divided into five main sectors: snacks, beverages, cheese, grocery, and convenient meals. The major competitors of Kraft are Nestlé S.A.; Unilever; ConAgra Foods, Inc.; Groupe Danone; H.J. Heinz Company; Sara Lee Corporation; etc. One of the world's fourth biggest suppliers of chocolate and sugar confectionery is Cadbury, which merged with Schweppes in 1969. One of its products, which is Dairy Milk and it is very successful molded chocolate in UK. The main products of Cadbury are bars, drinks, ice-cream and desserts, cakes and biscuits. The major competitors are Nestle, Mars, and Philip Morris. The first offer for Kraft to takeover Cadbury on September 2009, and the offer price was 10.2 billion pounds (BCC News, 2009). On November 2009, Kraft offered 9.8 billion pounds to takeover Cadbury, but Cadbury’s director rejected it (BBC News, 2009). On 19 January 2010, Kraft offered the final offer to Cadbury and the valued the entire issued share capital of Cadbury at 11.9 billion pounds. 2 February 2010, Cadbury accepted the offer (Kraft Food Annual Report, 2009). 1. The following are the relevant environmental factors:
There are three areas of the layer of external environment that included Macro environment, industry, competitor and market. Cadbury is belonged to confectionery industry, and the major competitors are Nestle, Mars. The confectionery market included chocolate, non-chocolate and gum products. According to Datamonitor’s Product Launch Analytics online database of new product Stock Keeping Units in 2009, it showed that there were 2,843 new confectionery products. The new confectionery products were 1,760 chocolate, 969 non-chocolate, and 114 gum products (Foodprocessing.com, 2010). Introduction of framework
I used PESTLE and Porter’s Five Force to analyze the framework. PESTLE refers to Political, Economic, Social, Technology, Environmental and Legal (Johnson, G., Scholes, K. and Whittington, R., 2008). Economic: In September of 2008, there was a Financial Tsunami that led to global economic decline. And this Financial Tsunami influenced until to the whole year of 2009. Moreover, in the research of United States Confectionery Market 2008-2009 did by National confectioner Association (National confectioner Association, 2009). It stated that over the past year the prices of sugar and corn sweetener continently to increase and the price near the historical high in 2009. Sugar or corn sweetener is the most important raw material in confectionery industry. Business Opportunities in different regions: There were some opportunities in the industry of chocolate confectionery industry. Since based on the Mintel report in December 2009, it stated that the chocolate sale of worldwide continue to grow (Foodprocessing.com, 2010). For example, the chocolate sale in China and the Ukraine were continually to increase, that separately rose 18% and 12%. And Mintel forecasted the continued growth will until to 2013. Social
Customer’s living style: According to NCA 2010 Candy Show, it showed that in the past few years, the customer became more health for their living style (Foodprocessing.com, 2010). The customers sought for more health style. Since in this report found that the companies of Mar and Nestlé also produced the more health candy. For example, more sugar-free options and more fruits, nuts, etc. Customer’s taste: According to the United States Confectionery Market research 2008-2009 showed that the chocolate sales rose 28% in 2008, and dark chocolate sales rose 12% (National confectioner Association, 2009). So the customer’s taste was the normal chocolate rather than dark chocolate. Porter’s Five Forces included bargaining power of suppliers, rivalry among established competitors, and...