Cadbury is one of the biggest and the most trusted brands that provide chocolates, foods and beverages to the customers. The aim of the company is to increase its profit, sales and customer base. It aims at providing tasty and healthy chocolates to its customers. To achieve the goals the company plans to fund the entre operations personally, franchise the stores and take up an option of joint venture. To analyze the strategic analysis by reviewing the current market performance it is essential to analyze the Swot analysis.
Strengths
Weakness
Opportunities
Threats
The mission statement of the company is that “By 2016, Cadbury will have its significance presence in every Australian capital city, starting with 22 stores in Melbourne it now aims at expanding 100 stores over Australia”. The goal and mission of Cadbury chocolates is to expand its operations in Australia by providing high quality chocolates and products to its customers.
The company plans to raise the funds for fulfilling its objectives personally. It also considers of taking a joint venture to fulfill its objectives. The retails stored would be expanded all over Australia through franchise. The company has a joint venture option from Haigh’s chocolates and hence it is essential for the company to analyze the performance of the company before collaborating with the company.
The major competitors of Cadbury chocolates are Nestle, Mars and Hershey’s. Analyzing the competitor’s performance in the Australian market is essential before expanding its stores in the Australian market. The two main competitive advantages for Cadbury chocolates is its wide distribution channel and strong brand equity and customer loyalty. After establishing the retail stores in Australian capital city the concentration of the company should be on promotion and advertisement of chocolates in respective markets. This is necessary to achieve competitive advantage (Bansal 2014).
The company should focus on sustainability by producing the chocolates without hampering the environment. The environmental issues pertain to waste management, and energy conservation.
The performance of the company is measured by taking into consideration the profit, sales and growth of the company. The market performance is measured by analyzing the number of customers consuming Cadbury chocolates, the market share that the company holds and the expansion of stores and employee strengths (Muigai 2013).
The store growth, sales and gross profit improved with a margin of forty six percent. The average gross profit for the chocolates and drinks is predicted to rise by sixty three percent. The company was successful in achieving 34,500 loyal customers that indicate a 58% of people in the target market (Spry and Lukas 2016).
The main requirement for the Cadbury chocolates is sustainability that is to produce the chocolates without hampering the environment. The products provided by the company should be healthy in nature so that all can consume it. Hence, since people now days are becoming more health conscious the company should concentrate on more organic production of commodities. It is essential for the stakeholders to follow moral code of conduct. The company is involved in ethical practice by following sustainability (Ward 2014). For the employees it aims at maintaining high level of safety. The raw materials are imported from countries with ethics and high quality requirements. The employees are required to maintain ethics by complying with the rules and regulations set by the organization. In order to ensure that the products are sustainable it is essential for the suppliers to be sustainable.
The marketing objectives are as follows:
The contribution of chocolates towards the market share of Cadbury has been improving and risings since 2010. The number of employees and customers are also rising. The gross profit of the company is also expected to rise by increasing its sales and growth. Though the profit of the company is rising, the cost of marketing is also rising due to expenditure on promotion and advertisement of products. The company started its operations in twenty-two stores in Greater Melbourne that is expected to rise to hundred stores (Modi 2013). The gross margin profit is sitting at forty six percent that captures fifty percent of the target market. The main criticism is from the rise in the unemployment rate by 5.8%. However, it is expected that the retail stores is to expand in five to seven years. This performance was compared with the actual results for the year 2015-2016.
The company can improve its quality of product in order to attract larger customer base. The strategies of the company should focus more on the competitors in order to achieve competitive advantage. The company should also concentrate on its distribution channel especially rural distribution channel (Telang and Deshpande 2016).
Pest analysis helps on analyzing the external factors that affect the business.
Political factors: the politics of Australia is calm and hence the business operates in a calm and peaceful environment. Political factors have little impact on the Cadbury chocolates.
Economic factors: economic factors have a great impact on the business. The interest rate is rising and the unemployment rate is rising that will greatly affect the business. The rise in the inflation rates is also expected to rise that is likely to affect the business of Cadbury chocolates. This is likely to affect the business in a negative way (Soni 2015).
Social factors: social factors such as lifestyle, attitude, belief and income of people affect the business. People now days are becoming more health conscious that will affect the consumption of chocolates in a negative way. Hence, it is essential for the company to manufacture the products that is organic and healthy (Jobber and Ellis-Chadwick 2012).
Technological factors: technology such as internet will affect the business greatly. With the improvement of technologies and introduction of e-commerce, the business is greatly affected. The involvement of Cadbury in online sale has improved the sales and profit of the organization.
Businesses include various types of risks in the management of organization and operations such as risks of profit, sales, revenue, investment, supply and production. The risk can be managed by evaluating its operations and business cycle using key performance indicators, business objectives and the strategies (Kotler et al. 2015). The risk that Cadbury is likely to face while expanding its operations in the Australian market is of decline in sales and profit in the Australian market, Hence, in order to avoid risks it is essential to analyze the market of Australia before expanding its operations. The rise in the price of raw materials is also likely to increase the risk of business. The risk can be managed by using proper strategy of evaluation and implementation.
Viability of marketing opportunities
Cadbury chocolates have a great opportunity to expand its operations in Australian market. This is so because the economy of Australia is growing with the rise in income and revenue of customers. With the rise of income of consumers, the demand for chocolates is likely to rise in Australia that will be profitable for the company. The marketing opportunities of Australia are likely to be favorable and viable. However, the rise in the interest rate and unemployment rate will affect the business in a negative way. The marketing opportunities have helped in increasing the customer base that are loyal. It has led to an increase in sixty percent of the target market (De Mooij 2013).
The financial techniques and improvement will help in increasing sales and marketing. The financial performance should be measured using key performance indicators. These include gross profit margins, net profit, net profit margin, current ration, average, and annual growth. The gross profit margins are currently sitting on forty six percent. This is measured to measure sales and growth (Ndung’u 2013). The financial techniques used are viable in nature. The main financial strength of the company is to provide the chocolates at the price that is affordable by the consumers so that it is able to provide the organization with required margins ad financial returns.
The company wants to expand its store in the Australian capital market. The key issues with this are the rise in the cost. The company has spent $60,000 on radio advertisement and $280,000 on the promotion of the products. This cost was not planned that greatly affected the profit of the organization. The benefit of this opportunity is that it has led to an increase in customer base by attracting loyal customers by capturing the target market to fifty eight percent.
The marketing opportunities is likely to increase the customer base that are loyal in nature.
In consultation with the key internal stakeholders the marketing objectives of Cadbury chocolates is to improve the taste and quality of product in order to attract larger customer that are loyal. It also aims at increasing the profit and sales by establishing the retail stores in Australia.
Risk management plan is a document that is used to manage the project in the organization that includes the risks, its impacts on the organization and the issues that the organizations are likely to face with the use of the strategies formulated. It contains the risk assessment matrix that addresses the risks that the organization is likely to encounter due to the strategies that it is likely to execute (Hill et al. 2014).
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