SWOT Analysis of Cadbury PLC

Summary of SWOT Analysis of Cadbury PLC

A SWOT analysis of Cadbury reveals the company’s key strengths, weaknesses, opportunities, and threats. Cadbury, now part of Mondelez, benefits from a strong manufacturing process and a diverse product range. Its association with ethical practices and memorable advertising campaigns, such as the famous gorilla advert, strengthens its brand image. Being part of Mondelez gives Cadbury access to wider markets and economies of scale.

However, Cadbury’s reliance on confectionery poses a risk, especially with potential regulations targeting high-sugar foods. Entering new markets requires significant investment and may lead to internal competition with other Mondelez brands. Recipe changes, such as those to the crème egg, sometimes alienate loyal customers. Accordingly, this highlights the need for better market research.

Opportunities for Cadbury include expanding into emerging markets like China and Russia. Not to mention an increasing presence in the USA through Mondelez’s networks. Relocating production to lower-cost countries can improve profitability, while investing in sustainability initiatives can enhance its socially responsible image.

Threats to Cadbury include damage to its reputation from controversial business decisions. For instance, moving production abroad and resulting job losses. Rising costs of ingredients, packaging, and transport could pressure profit margins. Intense competition and growing health concerns about sugar and fat may also reduce demand for Cadbury products. To address these threats, Cadbury should focus on innovation, healthier product options, and maintaining strong consumer trust.

This Cadbury SWOT analysis highlights the importance of adapting to market trends while preserving brand values.

Introduction to the Cadbury SWOT Analysis

Until the 2010 Kraft hostile takeover, Cadbury is a UK company (Wallop 2016). Now part of the Kraft’s Mondelez Group of businesses, Cadbury has undergone numerous changes.

One of these is the relocation of manufacturing plants from the UK to Poland. This occurred despite assurances before the merger that this would not happen. Another is recipe changes to classic Cadbury products such as its crème egg (Lewis 2016; Morris 2015). These changes undermine the caring reputation of the Cadbury brand in the UK and its association with quality (Wallop 2016).

A SWOT analysis of Cadbury PLC follows below.

Strengths of Cadburys PLC

Cadburys has a strong manufacturing process which can adapt to changing consumer tastes and meet these changing demands. Despite its close association with chocolate, Cadburys has a diverse product range. Ultimately, this enables Cadburys to compete in emerging markets (Mondelez 2017). This product range also has reinforcement as a part of Mondelez.

Cadburys maintains a strong ethical approach. In turn, this reinforces its brand as a caring and socially responsible to societal stakeholders and environmental issues (Wallop 2016). Cadburys has a strong brand and its adverts, such as the gorilla playing the drums, have created talking points for their consumers and reinforced the brand (Cadbury 2017).

Weaknesses

Cadburys is dependent on confectionary as its main product offering and this may be impacted by any regulatory plan which may attempt to tax high sugar and high fat foods, such as chocolate (Butler 2015). This would increase costs for Cadbury, who may have to pass these on to consumers either through higher prices or by producing smaller bars.

Entering new markets also requires high levels of investment, which may be possible due to it being part of Mondelez, but may also place Cadbury in direct competition with other brands owned by this group. Cadbury also need to consider undertaking market research when changing a recipe to include consumer tastes in this process (Lewis 2016).

Opportunities

Emerging markets may provide the opportunity for Cadbury to increase its global market share in areas such as China and Russia (Mondelez 2017). Opportunities for increased market share in the USA have also been provided by the sale of Cadbury to Mondelez as they already have access to the American market.

Production can also be moved to lower cost countries where labour costs are cheaper which would help with cost savings and Cadbury may also benefit from the economies of scale offered by Mondelez (Mondelez 2017). There are also opportunities in sustainability for Cadbury, which will help it reinforce its image of a caring organisation with strong connections to the society within which it operates (Cadbury 2017).

Threats

The long-held positive association of Cadbury as a trusted and caring brand may be undermined by the activities of Mondelez, in areas such as the relocation of production plants leading to staff job losses (Wallop 2016). The threat of increased costs such as fuel, transport, packaging and sugar across the world will impact on Cadburys profit margin (Mondelez 2017).

This will also be impacted by aggressive pricing and promotional activity from competitors and from retailers amongst increasingly cost-conscious consumers. The demand for Cadburys’ products may also be impacted by increased concerns regarding obesity and consumers becoming more health conscious (Butler 2015). This may require Cadburys to increase its research and development to reduce the calorie content of its products but this should also include consumer testing (Lewis 2016).

References for SWOT Analysis of Cadbury PLC

• Angwin, D, Cummings, S and Smith, C (2011) The Strategy Pathfinder: Core Concepts and Live Cases, (2nd ed), Chichester: John Wiley and Sons Ltd, Chichester
• Butler, S. (2015) ‘Sugar tax will not change diets, says Cadbury chief’ Guardian, October 22 [online] Available from https://www.theguardian.com/business/2015/oct/22/sugar-tax-not-change-diets-cadbury-mondelez-childhood-obesity-public-health-england
• Cadbury (2017) ‘Homepage’ [online] Available from https://www.cadbury.co.uk/
• Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regnér, P. (2014) Exploring Strategy, Text and Cases (10th ed.) Harlow: Pearson Education Ltd
• Lewis, K. (2016) ‘Cadbury’s Creme Eggs sales and satisfaction falls after controversial recipe change’ Independent, March 24 [online] Available from https://www.independent.co.uk/news/uk/home-news/creme-egg-easter-cadbury-mondelez-recipe-sales-a6950221.html
• Mondelez (2017) ‘Mondelez International Inc. Form 10-K Annual Report’ [online] Available from https://www.annualreports.co.uk/HostedData/AnnualReports/PDF/NASDAQ_mdlz_2016.pdf
• Morris, B. (2014) ‘The Cadbury deal: How it changed takeovers’ BBC Business News, May 2 [online] Available from https://www.bbc.co.uk/news/business-27258143
• Ruddick, G. (2017) ‘Cadbury says chocolate could get smaller after Brexit’ Guardian, March 24 [online] Available from https://www.theguardian.com/business/2017/mar/24/cadbury-warns-chocolate-could-get-smaller-after-brexit
• Wallop, H. (2016) ‘The many ways Cadbury is losing it magic’ Telegraph, March 21, [online] Available from https://www.telegraph.co.uk/food-and-drink/features/the-many-ways-cadbury-is-losing-its-magic/