Analyzing the internal environment and capabilities of Cadbury
Introduction to SWOT analysis
SWOT analysis is a process which identifies the strength, weakness, opportunities and threats of Cadbury and Boost Guarana. This analysis determines the factors which accomplish its objectives, obstacles to overcome and minimizes to get desired outcomes. Strengths describe what the company excels and distinguish it from their competitors. Weakness stops the company to perform at optimum levels (Rothaermel 2015). Opportunities are external factors which the company uses to provide competitive advantage. Threats are factors which have potential to harm the company.
Strong manufacturing process: Cadbury and Boost Guarana have stronger manufacturing process that adapts to change the taste of customers and meet with the changing demand of their customers.
Product range: Due to launching of new chocolate bar product, Boost Guarana has diverse range of products enable it to compete the company into emerging markets.
Strong product brand: The launch of first chocolate bar for energy simulation of brain by the company, Boost Guarana offers extra energy as the energy drink. This product meets with the need of genuine customers for simulate their mind and complement of their busy lifestyle (Djohanputro 2016).
Weakness of Cadbury and Boost Guarana are as follows:
Increase of cost: The Company is based on confectionary in their main product which attempts to tax higher sugar as well as fat foods like chocolate. It results to increase of cost, which may pass these to customers either by higher price or by production of smaller bars.
Lack of market research: Before launching the new product, Boost Guarana into the market, Cadbury is required to consider undertake a market research to understand the customer’s tastes (Bull et al. 2016).
Opportunities of Cadbury and Boost Guarana are as follows:
Increase market share: The emerging market provides opportunities for Cadbury for increasing their global market share within China, Russia.
Cheaper labour cost: The production of chocolate are moved to low cost countries, where there is cheaper labour cost help to save cost and therefore Cadbury benefits from economics of scale (Bull et al. 2016).
Threats of Cadbury and Boost Guarana are as follows:
Impact on profit margin: Due to increase into cost of fuel, packaging as well as sugar as it impacts the profit margin of Cadbury. It impacts the aggressive price as well as promotional activities from the competitors and retailers among increase cost conscious customers (Djohanputro 2016).
Health consciousness on rise: The demand of the company’s products impact by increase concerns regards obesity as well as the customers become health conscious.
Introduction to SWOT analysis
Conclusion
It is concluded that new chocolate energy bar helps Cadbury to reach a peak of achievement. The company is focused on global growth of their products. The company is also looking for other countries to market their products globally. Finally, the company is required to strengthen their brand name of Boost Guarana more in the UK market.
The model is described how efficiently one can able to organize the company holistically. It is based on seven elements to improve performance of company and also examines future changes into the company. The model is categorized as hard and soft elements. Hard elements are those which have physically seen in place such as strategy, structure and systems. Soft elements are intangible and they are not seen such as shared values, skills, staff and style (Alam 2017).
Advantages of the model- Mc Kinsey’s 7s model
Following are the advantages of this model:
- This model helps to understand the change into system and effects of the organization as a whole.
- It plans for a change into the business process.
- It creates strategic cultural changes into the organization.
- It helps to understand the current and future state of the organization (Shiri, Anvari and Soltani 2015).
- This model compares the future framework by means of current state.
The 7S framework of McKinsey to Cadburys stands for:
Structure: Cadbury has head office segment which is responsible to provide direction and support to regional structure. The other executives are responsible for business specialization such as CFO. Cadbury requires meeting with customer’s requirements such as they are organized in regional structure combines centralized organizational structure (Ravanfar 2015). Cadbury follows a matrix structure for each function.
Systems: The Company is focused on process systems where each division can break into manageable tasks as well as provide milestones to initiate for achievement of profits.
Skills: Cadbury requires innovative approaches to meet with the new taste requirement of customer, riding to the health wellness trend, efficiency into innovation and volume.
Style: Cadbury follows of operational style in which the tea is emphasized for cooperation among the regional centres of the company. Passion is emphasized on the sustainability of the products.
Staff: The staffs are encouraged to make profitability of Cadbury and they are provided with attractive incentives to increase employee satisfaction, lower turnover rate (Shiri, Anvari and Soltani 2015).
Shared values: Cadbury develops new energy chocolate bar product to meet with the customer’s preferences to stimulate the brain. The company achieves value to stimulate mind as well as complement of busy lifestyle.
Strategy: Cadbury has adopted marketing strategy to distribute their products and achieve of brand equity for gaining of competitive advantage. The strategies ensures for production efficiency, builds of portfolio and amends of packages.
Conclusion
McKinsey 7-S framework maps with the interrelated factors which influence the ability of the organization for changes. Lack of hierarchy among the factors provides a significant progress into the organizational part which is difficult to work without working on others.
SWOT analysis of Cadburys and Boost Guarana
Strengths of Cadbury: The new energy chocolate bar product of Cadbury adapts new changes into the taste of the customers to meet with new demands of the customers. The new product helps the company to become competitive in the UK market. The new product is an energy simulation of brain by the company which provides of extra energy as the energy drink (Djohanputro 2016).
Weaknesses of Cadbury: Due to increase in tax of sugar, fat foods, there is a huge increase into the cost of chocolate (Bull et al. 2016). The organization should undertake a research on the market so that they can know the taste of their customers as well as their demands.
Introduction to Porters five forces model
The framework is such a tool to analyze competition of the business. It is focused on industrial organization’s economics for deriving five forces which determine competitive intensity as well as attractiveness of the industry based on profitability (Yunna and Yisheng 2014).
Porters 5 forces model to Cadburys and Boost Guarana
Five forces factor to Cadburys and Boost Guarana are as follows:
Rivalry among the existing players: It is high for Cadbury as there are many businesses companies which are compete against Cadbury such as Nestle, Ferroro. Rivalry is strong for Cadbury as they are selling of same types of stores as well as products (Zhao et al. 2016).
Entry of competitors: It is low as Cadbury is already an established company in UK market. It is difficult for competitors to enter the market as Cadbury launches new chocolate bar, Boost Guarana, which is an innovative energy chocolate product.
Threat of substitutes: It is moderate as the supermarket is tending to copycat popular chocolates products as well as provide own brand into the shelves at cheaper prices. The chocolates are scored high as compared to substitutes as it is easier to preserve (Dalken 2014).
Bargaining power of buyers: It is high as there are many buyers of Cadbury and increasing number of competitors offer same product at lower cost which may affect the loyalty of customers (Maehle and Supphellen 2015). There is no switching cost for the buyers.
Bargaining power of suppliers: It is low as there is large number of suppliers and Cadbury has higher bargaining power as compared to suppliers. Cadbury can buy raw materials with cheaper price and in bulk amount.
Conclusion
It is concluded that it is difficult for the rivalry of Cadbury to overcome with popularity. The brand royalty of the company is maintained. The company is developing of new range of products and new promotions in the market.
Conclusion
Brand extension and strategic alliance
Tjemkes, Vos and Burgers (2017) stated that brand extension is use of established brand name of categories of new product. It increases brand image and save the cost of the developing new brand. Singh, Kalafatis and Ledden (2014) discussed that strategic appliance is arrangement between two of the companies which are decided to share resources for creating a business entity.
Use of brand extension or strategic alliance to counteract the threat of substitutes for Cadburys Boost Guarana
In order to counteract threat of substitutes for Cadburys Boost Guarana, brand extension is used as Cadbury gains a value market share of above 70 percent which is highest brand share for the chocolate sector. The brand extension of Cadbury is based on launching of new energy chocolate bar for stimulate of mind of their customers.
Defend against the threat of industry rivalry
Mass customization: It is a marketing technique which combines flexibility as well as personalization of custom made products with lower units cost that is associated with the production of mass.
Advantages of mass customization: It benefits higher sales of products associated with the mass production. It offers the products and provides customers an option to add features of choice, increase into satisfaction of customers along with providing a business increased sales (Moon and Sprott 2016).
Strategies from Pine’s 5 ways of achieving Mass Customization relate to Cadburys Boost Guarana: For Boost Guarana, the two strategies to achieve the mass customization from Pines five ways are higher level of automation strategies to achieve of lower price and production strategies to achieve of objectives of the company.
Conclusion
It is concluded that mass customization aims to deliver the products as well as services to the customers with best to meet with their needs with mass production efficiency. It is an idea to provide mass production economics to provide further customer value than it delivers one unit which is innovative.
Introduction to Porters Generic strategy model
This model describes how the company is pursuing competitive advantage across the selected market scope. The company chooses of one of the generic strategies to make competitive advantage either by lower cost, by differentiating among dimensions and focusing on customer’s value (Argyres and McGahan 2017).
Cost leadership, Differentiation and Focus
Into the cost leadership, the company sets to become lower cost producer into the industry. The cost advantage sources are varied as well as based on the industry’s structure. It includes of economics of scale, access to the raw materials and others. Into the differentiation strategy, the company seeks to become innovative along with business dimensions to provide values. The focus strategy is based on choice of competitive scope into the industry (Adner, Ruiz-Aliseda and Zemsky 2016). Focus selects segments and groups of segments within the industry to serve the customers to exclusion of others.
Introduction to Mc Kinsey’s 7s model
Strategies to Cadburys Boost Guarana
Cadbury adopts of differentiation strategies for setting unique value into the competitive environment. The company builds brand image throughout extensive advertising with brand emotionally as well as are loyal. By launching of new chocolate bar, Boost Guarana, it helps the company to maintain profitability into long run by differentiating their products as well as loyalty of the customers (Johnson 2016). The new product is claiming of first mainstream chocolate bar within UK with proven energy stimulation properties.
Introduction to the Ansoff matrix
Ansoff matrix is considered as strategic planning tool which provides framework to help the marketers and managers to devise strategies for future growth of company. The matrix is based on firm’s present as well as potential products, markets (Dawes 2018). Mainly, Ansoff’s matrix is useful for determine the product as well as market growth strategies of business.
Market Penetration, Product Development, Market Development and Diversification
Market penetration: It is a growth strategy where the business is focused on selling of the existing products into the existing markets. It achieves four objectives such as increase into market share of products, secure the growth of market, restructure the mature market and increase use of existing markets (Yin 2016).
Product development: The business is aimed to introduce of new products in existing markets. This strategy requires development of competencies and needs business to develop modified products.
Market development: The business seeks to sell their existing products to the new market.
Diversification: This growth strategy aims to provide business markets, new products into new markets.
Two strategies from the Ansoff matrix and relate to Cadburys Boost Guarana
Following are the two strategies Cadburys Boost Guarana should use from the Ansoff matrix as:
Product development: If Cadbury uses of product development for their products, then it would be successful as after failure of their previous products, the customers may not buy the new products (Vignali 2015).
Differentiation: Cadbury aims to produce new product into the market such as Boost Guarana, an energy chocolate bar. This new product will meet with the customer’s requirements which are done throughout extensive market research help to collect idea of customers those are regularly purchase their chocolate products.
Conclusion
It is concluded that Cadbury’s Boost Guarana decides to achieve of competitive advantage into the market by considering of product development and differentiation strategies which set help the business to become successful in the future.
Mission statement for Cadburys
Advantages of the model- Mc Kinsey’s 7s model
The mission statement of Cadbury is “Cadbury means quality”, this is our promise. The reputation of business is based on quality; commitment to continuous improvement ensures their promise.
Objectives for Cadbury Boost Guarana
- To become world best confectionery company
- To increase share of Cadbury when launching new product in the market
- To increase consumption of chocolate among all ages of customers
Segmentation, targeting and positioning strategies for Cadburys Boost Guarana
Segmentation of Cadbury is based on mixing of demographics and psychographic factors. Cadbury targets people from all age groups but it distinguishes product offerings to particular class of the customer’s groups. The target market is based on how the customers are buying their products such as 80 percent of revenue is being generated by 20 percent of the customers. The targeting strategies is focused on the new product, Boost Guarana meets with the customer’s requirements to stimulate mind and complement of their busy lifestyle (Gould and Desjardins 2015). It targets 16-30 years of old males. Cadburys Boost Guarana identifies brand value as positioning strategies and adjusts advertising strategies to focus on value into various markets. The strategy is varied from increase into brand awareness, education of customers about the products, increase into seasonal purchases and highlight of positive emotional values of the brands.
Product: The product range of Cadbury Boost Guarana is pretty large. The products are being classified based on seasons and varied on sales into the country. The products are also based on festive occasions.
Price: As quality of Cadbury products is high, therefore the price is high in some cases and it is quite reasonable. The products such as perk, éclairs provide taste of Cadbury even at low price. Daily milk is considered as premium brand of Cadbury due to low price of chocolates. The price of each product is based on type of customers desire to buy the particular product.
Place: The distribution of Cadbury Boost Guarana is fantastic as it is present strongly into urban areas and towns. The products have strong presence into the market.
Promotion: The promotion of new product is done throughout television, online, newspaper and social media sites. Various taglines are also used to promote their brand among the marketplace.
Marketing implementation is such processes which execute the strategies to create specific actions ensure that the marketing objectives are being achieved (Zhao et al. 2016). The implementation is such an action follows preliminary thinking to actually do something.
Control is an attempt to get particular economical and political goals throughout manipulation of some factors such as supply, demand, price, transportation as well as taxation (Bull et al. 2016).
Explanation of Mc Kinsey’s 7s model to Cadburys
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