INDUSTRY & COMPETITIVE ANALYSIS CADBURY INDIA (Part – I) Presented By Mohd. Yasser Arafat (55) Division-A

The sweetest story ever told… or heard

Vision

Purpose and Values

Objective Strategy Process Grow shareholder value…over the long term. Create robust and sustainable regional positions in our core categories of confectionery and beverages through organic growth, acquisition and disposal. Process Achieve this by managing by value.

Chronology of a success story 1750 - Mayans discover cocoa. 1831 - Manufacture of drinking chocolate and cocoa began in Birmingham. 1865 - John and Benjamin Cadbury launch Cocoa Essence. 1886 - Cadbury became one of the first firms to open dining rooms with kitchens and with food on sale. 1899 - Became a private limited company “Cadbury Brothers Ltd”.

Chronology Contd… 1905 - Dairy Milk was launched. 1915 - Milk Tray introduced. 1932 - Bournvita was launched. 1947 - Cadbury factory set up in India. 1969 - Cadbury merged with Schweppes. 1993 - Cadbury opened the world's largest and most advanced chilled warehouse in Birmingham.

Multi-Category Presence Key Markets Chocolate Sugar Gum UK France Spain Europe Africa Poland S.Africa US Canada Americas Mexico Brazil Australia Japan Asia Pac Thailand

The Indian Chapter Cadbury began operations in India in 1947. Challenge in India Get people accustomed to chocolates- primarily seen as a western taste. Do so by reaching out to the masses in a land where mindsets and preferences are as diverse as the country itself

What makes a successful brand? Carves out a distinct role in the consumer’s life Constantly delights the consumer year after year Consistent value proposition Local expressions of universal needs Elicit a ‘WOW’ at any given time

Strategy of Cadbury Increasing consumer base by focusing on affordability and availability. Small affordable priced packs launched. Advertising aimed at changing consumer perception and eating habits. Commitment to stakeholders in line with Corporate Governance policy.

Attractive and Resilient Returns Business Model Attractive and growing markets Expandable consumption Strong positions Impulse categories less exposed to retail consolidation High barriers to entry Attractive and Resilient Returns

Strategic Changes Organisational Comprehensive structural and leadership change. Consolidated operational structure. Increased scale of each regional operating unit. Separated supply chain management from commercial management.

Goals and Priorities Deliver superior shareowner performance. Profitably and significantly increase global confectionery share. Profitably secure and grow regional beverages share. Ensure our capabilities are best in class. Reinforce reputation with employees and society. Contd…

Goals and Priorities Contd… Up to a third of benefits reinvested in top line growth. Operating margin growth of 50 – 75 basis points pa. 8. Net sales value growth of 3% - 5% pa. 9. Targeting a 10% reduction in direct and indirect costs 20% reduction in factory base 10% reduction in headcount 10. Savings across: supply chain; commercial; back office 11. Operational gearing from volume growth.

Strategic Framework

Distribution Strategy CADBURYS INDIA LIMITED CNF RET Each in district Distributors Retailers

BCG MATRIX ??? Relative Market Share Low High High Bournvita Dairy Milk Bournville Candy Market Growth 5 Star Perk Delight Low Gems Eclairs Circle Size = proportion of total revenue business contributes to corp.

Ansoff Model EXISTING Product NEW EXISTING Product development (Bournville,Chockis) Market penetration (Dairy Milk, Perk, Bournvita) Market Market development (Candy) Diversification (Gems,Eclairs) NEW

Rating Scale: 1 = Weak ; 10 = Strong GE McKinsey Matrix Business Strength Relative Market Share Reputation/ Image Bargaining Leverage Ability to Match Quality/Service Relative Costs Profit Margins Industry Attractiveness Market Size Growth Rate Profit Margin Intensity of Competition Seasonality Cyclicality Resource Requirements Social Impact Regulation Environment Opportunities & Threats 10.0 Strong 6.7 Average 3.3 Weak 1.0 Bournville Dairy Milk, Bournvita, Perk High 6.7 Gems, Eclairs Medium 3.3 5 Star Low 1.0 Rating Scale: 1 = Weak ; 10 = Strong

Porter’s Five Forces Model INDUSTRY COMPETITORS Rivalry Among Existing Firms (Nestle,Amul) POTENTIAL ENTRANTS (Regional Players) SUPPLIERS (Cocoa farmers & others) BUYERS (Consumers & Customers) SUBSTITUTES (Working in all Substitute areas) Threat of new entrants Bargaining power of buyers Threat of substitute products or services Bargaining power of suppliers

PEST Forces Macro Forces Micro Forces Political (Stability) Social (Muh Meetha) Technological (introduction of double pack) Economic (Affordable small Packs) Supply (Local) Demand (Created) Competition (MNC & Regional)