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Cadbury¶s mission statement says simply: µCadbury means quality¶; this is their promise. Their
reputation is built upon quality; their commitment to continuous improvement will ensure that
their promise is delivered.
Cadbury has established itself as a company of fairness and integrity, which always attempts to
operate as a socially responsible business. They place great value on diversity, inclusiveness and
equal opportunities for all.

Cadbury believes that only the right people with the right tools and capabilities, working together
in the right environment can deliver high quality performance.

In addition, Cadbury is committed to attracting, retaining, growing and rewarding colleagues and
potential colleagues regardless of gender, race, ethnic or national origin, color, religion, marital
status, age, sexual orientation, disability, social class and political association.

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Cadbury PLC is one of the leading suppliers of confectionary products all over the world.
Cadbury PLC was established in 1824 by John Cadbury in Birmingham. By the year 1854 John
left the business of his company to his two sons George and Richard. George and Richard
continued to expand the product line, and by 1864, they were pulling a profit.
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. 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.
Cadbury prides itself on its market leading brands such as Dairy Milk, Snack and Crème Egg.
The company continually strives to drive innovation within the confectionery category and offers
its brands in a variety of formats and pack sizes, relevant to today¶s changing consumer
environment. Critical to this success is innovation in the development of new products and
brands. There are many great ideas ± many of them generated by chance. However, only few
products make it through to the end of the process. The further a product goes through this
process, the more expensive it becomes. As products progress, the company is making an
increasing commitment in terms of resources. Once a product is developed, the launch marketing
costs are significant; so a company must carry out extensive market research to ensure a product
has the best chance of appealing to the market.
Cadbury is global with leadership positions in over 20 of the world¶s top 50 confectionery
markets Cadbury is also growing fast in its emerging markets > 12% average growth over 5
years > 11% market share.cIn 2008 Cadbury declares total revenue of £5.46bn and their
operating income was £638m. Their EPS was 29.8% and they declared 16.4% DPS to all of their
shareholders. They have over 70000 employees all over the world and they have 5 subsidiary
companies which operate in over 60 countries.

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The Board is responsible for the overall management and performance of the company, and the
approval of the long-term objectives and commercial strategy. There are currently 9 members of
the Board ± two Executive Directors and seven Non-Executive Directors. Henry (Hank) Udow is
the Company Secretary.c

Ãc Chairman ± ^

Ãc Chief Executive Officer ± ’ 

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The Chief Executive¶s Committee reports to the Board and is accountable for the day-to-day
management of the operations and the implementation of strategy. The team is responsible to the
Board for driving high level performance of the growth, efficiency and capability programmes as
well as for resource allocation.c

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Ãc Chief Human Resources Officer - 
   
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Ãc Chief Supply Chain Officer ± ’   $ 500,000

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Situation Analysis is the process of analyzing the surrounding elements of a particular entity¶s
external and internal environment by which we can assume how these factors are influencing a
company¶s structure, process and performance. The internal and external factors of Cadbury¶s
management have a great influence on its performance and even its existence. Numerous
external and internal factors surrounding Cadbury are influencing its managerial system. As a
globally recognized international company for Cadbury these factors are more than important for
their survival.

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External factors are the components of external environment of a company which is the large
arena that exists outside the company. For Cadbury these factors are not only surrounding the
company but also from all over the world where Cadbury had expanded its business. Some
primary big factors of Cadburys external environment are ±

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Customers are the biggest and vital external factors for any company which is one of the major
direct forces which influence its structure, process and performance. Cadbury has a huge amount
of customers in over 10 zones all over the world. Of them 55% of the total customers are
chocolate lovers, 14% are gum buyers and 31% are candy lovers.cFor over 200 years Cadbury
has successfully satisfied its customer by best quality products and built a worldwide reputation
which influenced not only children but also adults to become loyal to Cadbury.

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In annual report of 2008 Cadbury has stated 5 Top competitors in their business that also had a
large market globally. They are Mars-Wrigley, Nestlé, Hershey, and Kraft. In market with all
these competitors Cadbury is in a stronger position but competitors are also very efficient in their
performance. So their efficiency is influencing the performance of Cadbury to maintain its level.

Market Shares (%)

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Human resource is the vast resource of people in the external environment from which company
obtains its employees. Cadbury already has employed over 70,000 people all over the world. It
selects skilled, qualified and efficient people through different sources and also provides training
facilities to improve their skills.

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Legal boundaries have great effect on any company. In case of Cadbury there aren¶t much legal
boundaries except different policies about price setting, international business and standard
maintaining.

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Cadbury has introduced its products to different culture around the world. Cadbury has gained a
positive influence in these cultures successfully. In India, Cadbury chocolate box is considered a
very fastidious gift in any festivals and social events.

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As an international company Cadbury has to face international forces in operating their business
activities. Laws, tax variation, political influence, economic condition, pricing policy and many
other factors of different countries are influencing its performance and for this they had to take
apply different tactics to be suitable to these factors.

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Internal factors of a company include all the day to day forces within the organization in which
managers perform their functions. Like any company Cadbury also has its internal forces
consists of its managerial level, day to day work force, managerial skills and roles etc. The key
internal factors which have a direct influence on Cadbury¶s performance are,

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There are three distinctive management levels in Cadbury.
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Top Management Strategic Level

Middle Management Technical Level

First-Level Management
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This level of Cadbury determines the long-range objectives and direction for the organization. It
consists of the top level management of Cadbury including Chief Executive Officer ± Todd
Stitzer ,Chief Financial Officer ± Andrew Bonfield, Chief Legal Officer - Henry (Hank) Udow
,Chief Strategy Officer - Mark Reckitt ,Chief Commercial Officer ± Stefan Bomhard ,Chief
Human Resources Officer - Chris Van Steenbergen ,Chief Science & Technology Officer ±
David Macnair ,Chief Supply Chain Officer ± Tony Fernandes. (Cadbury¶s official site)

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This level of management coordinates the activities at the operation level as well as connects it to
strategic level. This level consists of the extremely skilled and experienced middle managers of
Cadbury worldwide.

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This level consists of numerous first level managers and operational workers of Cadbury
worldwide. Until 2008 Cadbury had 70,000 employees working in 10 different operational zone
of Cadbury who are contributing best quality goods with their skill and effort.

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For over 200 years managerial skills of Cadbury has become one of the proudest thing for this
company. Managers of Cadbury have shown efficient use of their human, technical and
conceptual skills in time to time. Gradual success of its management system and extraordinary
discipline among employees proves managers efficiency.

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Different roles played by Cadburys managers of each level have made this company efficient,
productive and victorious through time. Major types of Roles played by the managers are,

Ëc Interpersonal Roles: Focusing on interpersonal relationships. Consists of Leadership,

Liaison
Ëc Informational Roles: Consists of monitoring role, disseminator role, spoke person roles
Ëc Decisional Roles: Consists of entrepreneur role, disturbance handler, resource allocating,
negotiating etc.

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On 19 January 2010, it was announced that Kraft Foods has buy out Cadbury for $18.9bn US
dollar. This take over was widely criticized in UK. Because there has been a doubt that because
of these take over 30,000 employees will lose their jobs. But that problem is now solved because
Kraft food has agreed not to downsize employees.

Another recent issue in Cadbury is there health and safety issues. On 19 January 2006, Cadbury
Schweppes detected a rare strain of the 

bacteria, affecting seven of its products, said
to have been caused by a leaking pipe. The leak occurred at its Marlbrook plant, in
Herefordshire, which produces chocolate crumb mixture; the mixture is then transported to
factories at Bournville and Somerdale to be turned into milk chocolate.

Cadbury Schweppes did not officially notify the Food Standards Agency until 19 June 2006,
shortly after which it recalled more than a million chocolate bars.

In December 2006, the company announced that the cost of dealing with the contamination
would reach £30 million.

On 29 September 2008 Cadbury withdrew all of its 11 chocolate products made in its three
Beijing factories, on suspicion of contamination with 
. The recall affected the mainland
China markets, Taiwan, Hong Kong and Australia. Products recalled included Dark Chocolate, a
number of products in the 'Dairy Milk' range and Chocolate Éclairs.

There other management issues like organizational structure, departmentalization and leadership
are discussed below -


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Departmentalization refers to the process of grouping activities into departments.

Division of labor creates specialists who need coordination. This coordination is facilitated by
grouping specialists together in departments.

Division of labor or specialization is the specialization of cooperative labor in specific,

circumscribed tasks and roles, intended to increase the productivity of labor. Historically the
growth of a more and more complex division of labor is closely associated with the growth of
total output and trade, the rise of capitalism, and of the complexity of industrialization processes.
Later, the division of labor reached the level of a scientifically-based management practice with
the time and motion studies associated with Taylorism.

Coordination is the act of coordinating, making different people or things work together for a
goal or effect.

There are five types of departmentalization. Names of these are given below ±

Ãc Functional Departmentalization.
Ãc Product Departmentalization.
Ãc Customer departmentalization.
Ãc Geographic departmentalization.
Ãc Process departmentalization.

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Grouping activities by functions performed. Activities can be grouped according to function

(work being done) to pursue economies of scale by placing employees with shared skills and
knowledge into departments for example finance, human resources, IT, accounting,
manufacturing, logistics, marketing, and engineering. Functional departmentalization can be
used in all types of organizations.

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Product departmentalization is based on product line. Tasks can also be grouped according to a
specific product or service, thus placing all activities related to the product or the service under
one manager. Each major product area in the corporation is under the authority of a senior
manager who is specialist in, and is responsible for, everything related to the product line.

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Customer departmentalization is based on common customers or types of customers. Jobs may

be grouped according to the type of customer served by the organization. The assumption is that
customers in each department have a common set of problems and needs that can best be met by
specialists. The sales activities in an office supply firm can be broken down into three
departments that serve retail, wholesale and government accounts.

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Geographic is based on of territory. If an organization's customers are geographically dispersed,

it can group jobs based on geography.

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Process departmentalization is based on product or service or customer flow. Because each

process requires different skills, process departmentalization allows homogenous activities to be
categorized.

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Cadbury¶s functional departmentalization consists of six departments. Details of those

departments are given below ±c

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department helps their CEO in taking decisions about whether they should accept a
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Cadbury plc products include chocolate, sweets (candies) mints and nut based chocolates. They
also have beverages and baking products. Their product departmentalization has four
departments. These are given below ±

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Cadbury¶s products are for consumers. They do not have any government or industrial
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Cadbury have five subsidiary companies worldwide. Their geographic departmentalization is

also based on these five countries. These five countries are United Kingdom, Ireland, Australia,
United States and India.

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Process departmentalization is mainly bases on products. Cadbury¶s main product is Dairy milk.
They use process departmentalization for these products only.

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Cadbury¶s follows a downward flow of communication. So, their organizational structure can be
said is hierarchical structure. Hierarchical structure is based on distinct chain of commands from
Managing director to Clerical Support assistants (according to Cadbury). Decisions are made at
the top and pass down. Cadbury¶s employee¶s roles are usually based on clearly defined
procedures and roles. Cadbury organization is based on a Democratic Management style
decisions are made as a result of a consultation process involving various members of the
organization (Cadbury). Ideas would be discussed and thought through collectively. Within
Cadbury organization we can find a Democratic structure, because Cadbury tends to be found in
situation where it is felt to be important for all members of the organization to understand what
they are doing, were decisions require individual initiative, and where member of staff need to
work as a team.

In Cadbury¶s organizational structure there is less complexity, less formalization and they are
almost decentralized. In that sense we can say that Cadbury¶s organizational structure is Neo
classically designed.

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In the past several decades, management experts have undergone a revolution in how they define
leadership and what their attitudes are toward it. They have gone from a very classical autocratic
approach to a very creative, participative approach. Somewhere along the line, it was determined
that not everything old was bad and not everything new was good. Rather, different styles were
needed for different situations and each leader needed to know when to exhibit a particular
approach.

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Ãc Autocratic
Ãc Bureaucratic
Ãc Democratic

This article will briefly define each style and describe the situations in which each one might be
used.

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This is often considered the classical approach. It is one in which the manager retains as much
power and decision-making authority as possible. The manager does not consult employees, nor
are they allowed to give any input. Employees are expected to obey orders without receiving any
explanations. The motivation environment is produced by creating a structured set of rewards
and punishments.

This leadership style has been greatly criticized during the past 30 years. Some studies say that
organizations with many autocratic leaders have higher turnover and absenteeism than other
organizations. Certainly Gen X employees have proven to be highly resistant to this management
style.

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Bureaucratic leadership is where the manager manages ³by the book¨ Everything must be done
according to procedure or policy. If it isn¶t covered by the book, the manager refers to the next
level above him or her. This manager is really more of a police officer than a leader. He or she
enforces the rules.

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The democratic leadership style is also called the participative style as it encourages employees
to be a part of the decision making. The democratic manager keeps his or her employees
informed about everything that affects their work and shares decision making and problem
solving responsibilities. This style requires the leader to be a coach who has the final say, but
gathers information from staff members before making a decision.

Democratic leadership can produce high quality and high quantity work for long periods of time.
Many employees like the trust they receive and respond with cooperation, team spirit, and high
morale.

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Cadbury¶s leaders want to encourage their employees in taking decision, they keep their
employees informed about the current situation of the organization,cwants to provide
opportunities for employees to develop a high sense of personal growth and job satisfaction etc.
From the above discussion we can say that Cadbury follows Democratic leadership style.

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Ãc They are the second largest confectionary company in the world.

Ãc Because of being a very big organization they have high financial strength.
Ãc They have strong manufacturing structure and already established a brand name.
Ãc They are exposed to a strong domestic economy
Ãc There companies are situated in good location (in an area that enjoys both high
population and high economic growth)
Ãc They have strong brand value in domestic market
Ãc They have high barriers to entry due to level of investment required

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Ãc Very few new products are created by own group

Ãc They have small range of products
Ãc There products are highly weather dependant
Ãc They are single asset company
Ãc Ongoing investment in new attractions required
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Ãc They can expand into new markets because of their brand value.

Ãc They could try new products.

Ãc They could try different types of product line other than confectionary.
Ãc They can expand their noncore activity (e.g. food, retail,
functions)
Ãc Other tourism/leisure activities

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Ãc Competitive pressures from other branded suppliers (national and global)

Ãc Supermarket own brands

Ãc Rationale for being listed questionable (small market
cap and one major shareholder)
Ãc Exposed to light major market and wage inflation.

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Cadbury believes that the business still has significant unexploited potential ± both in terms of
top line growth and returns. It has the aim to achieve the vision of becoming the biggest and best
confectionary company of the world. For this they need to exploit their strength of leadership
positions to continue to grow their market share and significantly increase their margins and
returns.

Cadbury has a business plan named Vision into Action (VIA) for 2008 to 2011 which aligns the
energies and efforts of their teams around the world behind a number of objectives which will
make the most impact on Cadbury¶s revenue and margin performance.

In order to generate superior returns for Cadbury¶s stockholders, their VIA has six financial
objectives. These objectives are given below:

>c Organic revenue growth of 4% - 6% every year.

>c Total confectionery share gain.

>c Mid-teens trading margins by 2011.

>c Strong dividend growth.

>c An efficient balance sheet Growth in Return on Invested Capital (ROIC).

To achieve these financial objectives, they have a growth and efficiency strategy which aligns
behind their focus on fewer, faster, bigger and better. This focus is being applied to all aspects of
their business.





They have a clear business plan called Vision into Action (VIA) which aligns the energies and
efforts of their teams behind the brands, markets and projects that will make the most impact on
their revenue, margin, and market performance.

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Cadbury organize over three priorities:

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Cadbury¶s growth strategy - 'Fewer, Faster, Bigger, and Better¶ - has a number of key
components. These are discussed below:

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To increase revenue growth, under its structure of managing each confectionery category on a
global basis, they will focus on their resources on key markets in each category where innovative
products will be developed and launched.

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Cadbury will increase their focus on their biggest, most advantaged brands, and on key markets.
As part of this focus, some of the smaller brands and products in the portfolio are being
rationalized over the plan period.

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They aim to enter into areas of the market where they do not currently have a presence through a
model named ³Smart Variety´, which uses existing distribution strength to expand into new
categories. Cadbury ultimately aims to have a strong position in all three confectionery
categories in the markets in which they operate.

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Cadbury is focusing its efforts on seven leading customers (including Wal-Mart, Tesco,
Carrefour and Lidl) and three trade channels (impulse in developed markets; traditional trade in
emerging markets; and international travel retail). These seven leading customers accounted for
14% of confectionery revenue in 2008, with revenues growing by 8%. They believe their
business is uniquely placed to support these customers. For the top three global retailers, they
have strong total confectionery positions in their key markets.

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As a leading global confectionery company, Cadbury will continue to investigate available

confectionery opportunities to develop its platform. Their focus will be on expanding their
product platforms and strengthening their distribution capability by acquisitions and by
partnering with third parties. At the mean time, they will continue to integrate their recent
acquisitions.

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Cadbury recognize that they can gain much more profits by simplifying the way they do things
across all regions of their business. Because their business became a complex, their total cost
base is higher and their margins are currently below their peer group average.

Cadbury¶s goal of increasing their underlying operating margins from around 10% in 2007 to
mid-teens by end of 2011 has three core elements:

>c A major group-wide cost and efficient program across all aspects of their business - in sales
and administration, in the supply chain, in the regions and at the group centre. They are
aiming to reduce the complexity of their business and lessen duplicated activities;

>c Improving the performance in three key underperforming emerging markets ± Russia, China
and Nigeria; and

>c Focusing relentlessly on profitable growth and where necessary, rationalizing their portfolio.

Examples of the ways in which Cadbury simplifying business to reduce costs include:

>c Managing chocolate, candy and gum categories and biggest brands on a global basis rather
than on an individual market or regional basis.

>c Combining local market and regional head offices, in the UK where they are co-locating their
central head office team with the BIMA (Britain, Ireland, Middle East &
Africa) management team in a single office;

>c Combining a number of markets into a single commercial organization with large scale and
reduce overall costs such as Canada and the USA;

>c Outsourcing certain financing, accounting, IT and human resource processes to expert third
party operators; and

>c Reconfiguring their manufacturing network, so that more of their production is focused in a
fewer number of large scale plants. This will allow them to reduce costs and invest in new
state of the art factories to support their growth plan.

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The introduction and strengthening of commercial categories with the combination of simplified
organization provides a stronger focus on category-led business initiatives, which consistently
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Cadbury¶s innovation agenda is one of the important parts of its long-term growth program and
requires investment of world-class facilities and teams. During the life of their VIA program,
various initiatives will continue to strengthen their capabilities and effectiveness in this aspect.

 
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Cadbury will benefit from a simplified organization which reduces complexity and speeds up
decision making and help them to supply the products to market faster.

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As part of their strategy, they are focusing on an active and lively agenda to influence the
competitive advantage they have now.

 
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They have significant chances to outsource various administrative functions in the areas of back-
office processing, facilities management, IT and liquid chocolate production. This can be
achieving perfectly through working with the right partners.

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Cadbury has identified six commitments to ensure its grow in a responsible and sustainable way
for the long-term.

Cadbury¶s commitments:
>c Promoting 
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c- Cadbury¶s money, time and capability.

As well as being the right thing to do, they also create value and competitive advantage, which
help to strength their business, build their reputation, and motivate their people.

 


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Cadbury has the aim to improve the returns from the capital invested in its business while at the
same time ensuring that they invest correctly in the business for the longer-term.

The focus on fewer and bigger projects requires them to be more disciplined in how they allocate
resources over brands, markets and projects - choosing where to invest and where not to invest,
or deciding when we should invest on our own and when it would be better to invest with a
partner.

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They are also ongoing to focus insistently on how they manage their functioning capital. Over
the last four years, they have reduced their working capital days by over 10%, effectively
releasing over £200 million of cash. During the next few years, the reduction in their factories,
the rationalization of the portfolio and external partnerships will allow Cadbury to reduce its
working capital further.

 


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To bring superior returns to the stockholders, and to ensure continued investment in new plant
and equipment or in buying new businesses, they must generate returns considerably above the
cost of capital. Thus their financial scorecard calls for the combination of:

>c Strong dividend growth;

>c An efficient balance sheet; and

>c Consistent improvements in ROIC.





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Cadbury¶s new management incentives for 2008±2011 are closely aligned with the success of the
financial performance. Their annual incentive plans need a reasonable delivery of top-line
growth and margins, and the Long Term Incentive Plan requires a balanced delivery of earnings
growth and development in ROIC.

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Setting up operation all over the world is very difficult, the company like Cadbury has
done it successfully with the help of it¶s very talented employees. We also found that the brand
name of the Cadbury is very well known across the world as compare to the other brand name
such a nestle etc.
Also, we found that Cadbury Company has strong corporate governance, as well as their
contribution of Social responsibility is very high as compare to other company. Here is some
example of the Cadbury corporate social responsibility which is major focus on following
factors:

Ãc Marketing, food and consumer issues

Ãc Ethical sourcing and procurement
Ãc Environment, health and safety
Ãc Human Rights and Employment Standards
Ãc Community investment

We also found that Cadbury purchase their main raw material COCOA for chocolate bar from
Ghana. The companies buy COCOA from the Ghanaian government cocoa board
(COCOABOD), which controls the cocoa trade in Ghana. If, the company does not maintain
long term relation with government of Ghana it may be possible the company cannot survive
long time in future.
One of the many things which we found is that Cadbury is very strong in terms of brand name
and market share across the world. As well as Cadbury is maintaining relations very hearty with
customer, supplier, stakeholder and employee.
We also found that Cadbury never negotiate with quality of product because of the philosophy
to serve high-quality product to the customer. As well as not only in quality but also very ethical
in the pricing of the product which are focus & considered on country wise peoples incomes.

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With over 70000 people in their workforce, huge financial strength experience of almost
200 years Cadbury is still World¶s second largest chocolate manufacturing company.
They should set their objectives to be the no. 1 in the world. They can achieve it by
creating new product line and entering new markets.

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Cadbury is global with leadership positions in over 20 of the world¶s top 50
confectionery markets. Most of these countries are in Europe and Asia. They should
concentrate more on their operations in Africa to be a true global company.

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In recent years Cadbury faced some health and safety issues with their product. In 2006
Cadbury had to recall more than a million chocolate bar which cost them £30m. Cadbury
withdrew all of its 11 chocolate products made in its three Beijing factories, on suspicion
of contamination with melamine. The recall affected the mainland China markets,
Taiwan, Hong Kong and Australia. They are not only facing financial loss here but also
they are hampering their brand image. They should take necessary steps to avoid this
kind of situation in future.

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Today¶s global economic condition surely had a negative impact on their revenue and
profit. They can avoid these situation bay taking some initiative like -
>c Adapt sales and marketing strategies including innovation to respond to changing
consumer and customer behavior.
>c Focus on effective route-to-market and customer service.
>c Be diligent about costs and efficiencies.

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With the entry of many new multinational companies, the confectionary market is booming. Till
the eighties, the chocolate market was small and the product category itself was fuzzy. In the
eighties, Cadbury was the only chocolate company who has a distinct category of products with
an identity of its own. But now situation has changed. Cadbury is facing tremendous competition
from other companies like Mars-Wrigley, Nestle etc. They have to come up with innovative
ideas to compete with these companies. Cadbury already have a strong brand image they just
have to concentrate on their product quality and the marketing of their product, which will ensure
their dominance. The entire report mainly dealt with company itself, management issues, SWOT
analysis and the objective of the company. After the establishment this company achieved a great
brand image and Cadbury still maintained its image almost 200 years later.

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