Introduction

The market for chocolate confectionery was valued at USD 137.95 billion globally in 2022,
and it is projected to grow to USD 186.99 billion by 2028. The market is anticipated to
expand between 2023 and 2028 at a compound annual growth rate of 5.20% (Entertainment
Close-up, 2023).

In recent years, the chocolate confectionery has become more and more popular for a variety
of reasons, primarily due to its potential health benefits, the emergency of premium and
artisan chocolates, the expansion of online sales channels, which offer increased accessibility,
and the innovation in flavours and forms, which is driven by successful marketing campaigns
(Entertainment Close-up, 2023). This report’s objective is to provide an overview of the
examination of the internal and external environments within the UK confectionery sector.
To provide a practical example of how to develop a marketing plan for the expanding
confectionery business, this research used Cadbury, Inc. as a case study.

John Cadbury established the British international candy manufacturer Cadbury in

Birmingham, UK, in 1824. Since 2010, Mondelez International has acquired all of Cadbury's
shares. After Mars, it is the second-biggest candy brand globally. With operations in over 50
nations, Cadbury has its global headquarters located in Buckinghamshire. In addition to many
other confectionery goods, it is well-known for its Diary Milk chocolate and Diary Milk Silk,
Bournville, Perk, Éclairs, Bourn Vita, Celebrations, Gems, and Oreo. It is also among the
most well-known British brands internationally (Chattopadhyay, et al., 2023).

Over the previous few decades, Cadbury has done incredibly well and achieved several goals.
Among them is Cadbury, which broke into the world's top 20 brands after increasing the
value of its brand by more than half (47.6%) between 2022 and 2023. It is on the shortlist for
Marketing Week's 2023 "Brand of the Year" award (Niamh, 2023). Additionally, Cadbury
has received recognition for carrying out one of the most prosperous FMCG product
launches. (Sarkar, 2013). Overall, 96% of chocolate consumers in the UK are aware of the
Cadbury brand. (Janouskova, 2017).

Cadbury’s current situation and key challenges

One of Cadbury's challenges is the problem of underage labour. In April 2022, Cadbury was
accused of using child work on its cocoa fields, even though the chocolate business had
promised to end child slavery more than 20 years earlier. (Jon Ungoed, 2022). Cadbury's poor
choice to use child labour was motivated by a desire to increase profits by giving employees
low pay. This infuriated many, who felt that Cadbury ought to admit that claims of child
labour and slavery in the cocoa chain, which are associated with their goods, have severely
hurt the Cadbury Company (Ivy Panda, 2022).

Mission and Value:

Cadbury’s mission statement is, “Cadbury means quality; this is our promise. Our reputation
is built upon quality; our commitment to continuous improvement will ensure that our
promise is delivered.”

To line up with its main goal, Cadbury has characterised its vision as “Working together to
create brands people love”. This exemplifies what it is endeavouring to achieve as a
business. This encapsulates what it is attempting to accomplish as a business.

Mckinsey’s 7S Framework
The fundamental tenet of Mckinsey’s 7s framework is that a business must be able to acquire
and manage important assets, such as non-sustainable resources and capabilities, to gain a
competitive edge and increase its market share (Kraaijenbrin, et al., 2010). Cadbury’s internal
environment capability analysis will be conducted using Strategy, Structure, System, Shared
value, Skills, Staff and Style (Mckinsey’s 7S Framework). This is a well-established model to
identify a company’s strengths and weaknesses.

Strategy
Cadbury provides a distinct environment where values are now a key component of the
company's strategic decision-making process. The Cadbury situation is especially unique
since the company's core principles have survived good decisions about mergers (such as the
deal with Carlyle Group that guaranteed Cadbury a 40% stake in the joint venture and
reinforced and protected Cadbury's distribution network (Yashvi, 2021)), a public listing, and
a hostile takeover (Kraft Foods acquiring Cadbury in 2009). As a result, they are
knowledgeable about business happenings and family choices about mergers and other
strategic decisions, all of which have served as a significant source of information on how
family values and business decisions interact (Suddaby, et al., 2023).

Cadbury’s strategy is the focus on building a world-class supply chain to achieving marketing
and sales excellence. Another strategy Cadbury has used is they have concentrated on their
core product market, which is chocolate and confectionery. Based on this strategy, Cadbury
has outperformed its rivals, ranking among the top performers in 2009 with a 45.6% gross
margin.

Structure
Corporate governance and reporting structure, in Cadbury's opinion, is essential to
humankind's equity and stability. Accordingly, concerns over issues like accountability, the
veracity of financial reporting, and the hazy relationship between director compensation and
business success have become more prevalent. This impacted the establishment of the
Cadbury Committee to address these problems and suggested a specific governance model
that UK-quoted corporations should follow. Preferred corporate governance arrangements
were recognised in a Code of Best Practise that outlined this paradigm. Therefore, the
Cadbury Report made several important recommendations relating to the desirability, or
otherwise of certain internal monitoring mechanisms (Weir & Laing, 2001).

System
Cadbury has a defined and well-demarcated systems in place to ensure that the business
operations are managed effectively and that there are no conflicts or disputes. Highly
departmental in nature and include HR, finance, marketing, operations, sales, supply chain
management, strategic leadership, and public relation management. The strategic leadership
ensures that all systems are allocated with resources and set specific targets to achieve similar
business goals in any specific period.

For instance, Cadbury has built a world-class supply chain system to achieving marketing and
sales excellence (Mondelez, 2023). They have a distribution network which includes 2,100
distributors (including super stockists) and 450,000 retailers which makes Cadbury have a
strong distribution in urban areas but is still in the process of setting up a robust rural
distribution network (Sarkar, 2013). Furthermore, they have enhanced and maintained a
robust manufacturing system especially after the Cadbury Salmonella (a bacteria that can be
found in variety of food) scare that happened in June 2006. Based on this, Cadbury has used
many novel technologies to screen for microorganisms that might pose a threat to food safety
(Carroll, 2009). Therefore, with a well-designed 360-degree marketing plan, similarly
successful distribution plan and strategic leadership, Cadbury can achieve more market
penetration and coverage.

Shared value
Cadbury has developed a few common values that highlight the company's advantages.
Corporate social responsibility, which includes initiatives like the Cadbury Cocoa Partnership
(CCP) to improve the lives of cocoa producers and advance sustainability, is one of their
common principles. For instance, the CCP that took place in Ghana resulted in 40% of
farmers who expressed a desire for their offspring to carry on the family's cocoa growing
legacy (this percentage ranged from 21% in the Western region to 52% in the Eastern region)
(Hainmueller, et al., 2011). Also, the Cadbury Foundation has helped hundreds of local
causes over the last fifteen years by growing its first contribution of £40 to the Stirchley Girls
Club by £10 million.

Cadbury is no stranger to ethical responsibility. Cadbury’s partnership with the Fairtrade

Foundation, according to Mark Palmer (2009), director of Green & Blacks, he acknowledged
that the company is now firmly placing ethical business at the forefront of its business and
brand communications, rather than simply abruptly shifting to an ethical business model.
Cadbury's Diary Milk became the first mass-produced Fairtrade chocolate bar because of the
partnership's influence (Freedman, 2009).

Style
In addition to its unique managerial culture and strategy, Cadbury's approach is characterised
by practical compassion without dictatorship, pursuing efficiency without turning employees
into living instruments, and a search for methodical organisation (Dellheim, 1987). This was
evidently demonstrated in an interview with Todd Stitzer (2008), the former CEO of
Cadbury, who described his leadership style as inclusive, dynamic, and focused. In addition,
he thought that productivity and teamwork were essential. Therefore, individuals are greatly
motivated to be happy at work by the excellent work environment at Cadbury.

Staff
Cadbury boasts a robust labour force. The company employs over 4,500 employees in more
than 60 countries around the world. However, mostly in Europe, the US, Central and
Southern America, Australia and other parts of Asia Pacific which makes them have a huge
workforce (Janouskova, 2017). Furthermore, Cadbury has a culture that values investing in
human resources. For instance, Cadbury negotiated a wage agreement worth up to 17.5% for
more than 1,000 UK workers to recognise employees' noteworthy accomplishments and
preserve competitiveness in the manufacturing operations (BBC, 2022). In addition, a
majority of almost 90% of participants in the UK Cadbury employee review on Indeed (2023)
expressed their contentment with the company’s work culture. Therefore, Cadbury is a great
company to work for—to a limited extent, given its moderation in terms of wellbeing and
compassion.

Skill
Cadbury boasts an impressive staff with excellent levels of abilities and capabilities. For
instance, board members take part in both internal and external training programmes to get
them ready for their positions (Plessis, 1994). Therefore, the company has been dedicated to
training and development, succession planning, merit-based promotion, dealing with
underperformance in an honest but fair manner, and their distinction as “Investor in People,”
has been at the forefront of human relations practices.

PESTEL
The acronym PESTEL stands for political, economic, social, technological, legal, and
environmental factors that are outside the organization’s control and have an impact on
decision-making. The PESTEL technique offers a framework to improve one’s capacity to
examine the external environment of an organization. Marketers frequently use this tool to
track and assess external factors, or macroenvironmental factors, that have an impact on
organizational decision-making. The final product offers the chance to evaluate critical
threats and weaknesses that are incorporated into SWOT analysis (Okyere, et al., 2018)
Political
The way the state operates is reflected in the political climate. Laws and regulations are tools
that organisations may use to adhere to (Ivory, et al., 2012). A political situation may
influence society and the economy. The political environment cannot be separated from
legislative frameworks or from economic realities (Song, et al., 2017).

The fact that government worries over obesity have prompted calls for a sugar tax and
pressure on procedures to lower the quality of sugar in their goods (Butler, 2015). After
Kraft’s hostile acquisition of Cadbury, more political responses to corporate activity were put
out (Morris, 2014). As a result of political policies like restraint and the ensuing decline in
disposable income, Cadbury has also resorted to “shrinkflation”, in which the size of a
chocolate bar is decreased as opposed to remaining the same and passing along the higher
cost to the customer (Ruddick, 2017). There are indications that this trend, which commenced
showing the 2008 recession, will continue throughout the Brexit process (Mondelez, 2008).

Economic
Despite the impact of the worldwide economic crisis on Cadbury’s development ambitions,
revenues remained reasonably consistent due to a fall in the disposal income of consumers
and other stakeholders. In-fact, Cadbury's yearly profits increased by 30%, mostly due to the
sales of Trident and Diary Milk (Pestel analysis , SWOT and business analysis tools, 2014).
Cadbury's UK market grew by 2% in 2006 despite the salmonella epidemic that the company
caused and the possible health danger to the population. Furthermore, Cadbury announced a
4% rise in revenue and a 9% profit gain, which the company attributed to its performance in
other product categories (Carroll, 2009).

Furthermore, Cadbury's 2008 underlying profits per share increased from 10.2 pence to 24.9
pence, mostly due to share consolidation, higher underlying performance, and exchange rate
movements. The base business sales increase of 7% exceeded the target range of 4%–6%.
Changes in exchange rates had a positive effect on revenues, with reported revenue rising by
15%. With a market share of over 10%, Cadbury has demonstrated solid progress in realising
some of the initial advantages of its Vision into Action approach. Therefore, Cadbury has met
all its performance targets for 2008 and is in the process of putting many of the initiatives that
will provide major returns starting in 2010 into action (Cadbury, 2008). Moreover, the year
before to Cadbury's 2009 takeover by Kraft, the company's sales levelled at £5.98 billion,
representing an 11% increase over 2008. (Kraft & Cadbury, 2011). As a result, the brands’
goodwill contributes roughly 50% of the company’s revenue, suggesting that the brand is
more profitable than other confectioners.

Social
According to Jobber & Ellis-Chadwick (2016) book ‘Principles and practice of marketing’
they refer to the social context as “psychic distance”. It relates to societal attitudes and
common beliefs and differs from country to country.

Cadbury has a strong brand equity and decades of brand heritage, making it a beloved brand
throughout the UK (Carroll, 2009). The impact of its strong strength also led Prime Minister
Gordon Brown acknowledging Cadbury as a business that has been very significant to Britain
(Inman & Moya, 2009). Additionally, Cadbury has diverse product line comprises a selection
of items, which is one of their strong points. They also have the broadest influence over
emerging markets of any confectionery company worldwide. Over the course of its lengthy
existence, Trident, Halls, Cadbury Éclairs, and Cadbury Diary Milk are just a few of their
widely known trademarks across many demographics. Every British chocolate aficionado
adores the brand (Kraft & Cadbury, 2011). Furthermore, Cadbury’s position in the rising
market helped them defeat Hershey in the Kraft Foods takeover. Therefore, Cadbury has
positioned its brand in high-growth geographic countries and has a strong product market
(Downward, 2016).

However, the Cadbury sales team, had over the years held onto more display space than the
company's moulded and count line brands' sales rate warranted since they lacked effective
tools. Selling the powerful Cadbury seasonal collections required a great deal of face time
with key customers, but the firm gained from the relationships that were formed with all its
significant clients. Cadbury convinced retailers to let the three companies—Mars, Cadbury,
and the united Rowntree Mackintosh—occupy around 30% of the area available for year-
round operations, with the smaller rivals taking up the other 10%. But with just
approximately 20% of the market consisting of products offered in 30% of the area, that
reasoning was beginning to look a little shaky. Given that rivals might occupy up to one-third
of Cadbury's display area, the company was not especially susceptible (Bradley, 2008)).
Consequently, this poses a risk to Cadbury since consumers may begin purchasing rival
candies in place of Cadbury's offerings.

Technological

Environmental
The environmental value of sustainable packaging has increased. In 2003, Cadbury
transitioned into a business that focuses on building a stronger and more sustainable platform
for future growth (The Grocer, 2003). The impact of this led Cadbury take out the acrylic
windows from every chocolate shell egg they sold in March 2021. Additionally, they stopped
selling 108 tonnes of cardboard and switched to cardboard made entirely from sustainable
sources. Also, they used 15% less plastic in their large sharing bags. Additionally, the
packaging for two of their sharing bar brands- which together account for over 28 million
sharing bars- now contain 30% recycled plastic (Cadbury, 2023). Therefore, to have a more
beneficial influence on the community in which they live and work, Cadbury has also chosen
to obtain more sustainably produced raw materials because of environmental sustainability.
Legal

SWOT
The SWOT analysis outlines the methodology for comprehending an organisation’s strength
and weaknesses and for establishing a framework for evaluating both the possibilities that are
accessible and the external dangers that the organisation must contend with. This tool is used
by entrepreneurs to develop long-term commercial prospects in the international market
(Okyere, et al., 2018).

Strength
Cadbury’s primary marketing advantages are its market placement, brand loyalty, and Diary
Milk’s iconic reputation as a brand. This product, which debuted in 1905, continues to be the
best-selling chocolate bar in the United Kingdom (Ritz, 2006). Also, Cadbury spearheads
industry-wide change by collaborating with the Consumer Goods Forum to promote human
rights and advance a future that is forest positive (Mondelez, 2008).

Furthermore, to balance its income statement, Cadbury concentrates on sales and earnings,
which gives the business a solid financial framework (Hidiroglu, 2019). Additionally,
according to Ritz (2006), Cadbury Schweppes, the parent company of Cadbury, has a strong
financial position. In 2006, Cadbury’s goods had an international retail value of over 7,000
million pounds. To sum up, Cadbury has successfully diversified through business
acquisitions, benefited from successful internal reorganisations, and sold off underperforming
brands across the UK (Ritz, 2006).

Weaknesses
There was a cost associated with Cadbury’s numerous acquisitions. As a result, inefficiencies
in the company and product started to show which has further led to the UK addressing these
issues (Ritz, 2006). Along with its inefficiencies, Cadbury also had further difficulties in
February 2007, when it had to recall a line of Easter chocolate goods due to a packaging error
that failed to alert consumers who were allergic to nuts. The recall had an impact on some
brands, including Cadbury's Crème Egg, which prompted the company to apologise in the
media for yet another food safety mishap (Carroll, 2009). Also, the situation of worms being
found in Cadbury Diary Milk led to a brief decrease in deals (Aujla, 2021).

Unexpectedly, Cadbury's major brand, Diary Milk, is so strong that it has created another
vulnerability in its product line. In the past, the business has dominated the UK market for
decadent chocolate bars. However, chocolate for snacks makes up a bigger portion. Cadbury
has made many attempts to develop a rival to the popular chocolate nibbles KitKat and Mars
bar. In the UK, Cadbury hasn't been able to create a product to counteract this portfolio
deficit (Ritz, 2006).

Opportunities

Cadbury has an undeniably unique platform. They are No 1 or No 2 in the world by virtue of
being strong in one or two of the three confectionery categories. This offers them a great
opportunity for growth by rolling out a second or third category. Also, they offer people
affordable moments of pleasure, which means they get a lot of repeat business and good
cashflow. This means they have the money to invest in innovation, efficiency, and people to
ensure they keep growing their footprint and earnings (Cadbury, 2008).

Threats

Marketing strategies

Pricing strategies of Cadbury

Cadbury Diary Milk is produced in different sizes; therefore, it is priced economically to
attract different customer segments. Some of the mini chocolate packs are also sold at a
slightly lower price. The company also sells products as bundles and gift packs during the
festive season. The packs are decorated in line with the festivities and customers could
purchase a multiple number of products at a lower price than purchasing them each
individually. This increases the sales of the products during the festive seasons (Rahman,
2023).

Promotion strategies of Cadbury

Cadbury has drastically changed its production system especially after the situation of worms
being found in its Diary Milk. Cadbury launched a PR campaign for the trade and later came
an ad campaign and a revamped poly-flow packaging (Vaid, 2006). Cadbury also uses
different marketing slogans for different products. It uses Televisión, social media, radio and
print media to promote its products. It aims to gain more customers by showing them how
chocolate can bring happiness into their lives. Social media has become an integral part of
modern marketing strategies, and Cadbury is no exception. It has a strong presence on social
media platforms such as Facebook, Twitter, YouTube, and Instagram (Rahman, 2023)

REFERENCES
Assessment Task Detail and Instructions:

Task: You are required to prepare a company and market situation analysis report for a
company of your choice operating in the Chocolate (confectionery) industry. You can focus
on either a UK or non-UK company.

Some of the sub-markets in the chocolate industry are as follows: Chocolate confectionary,
Chocolate assortments, Seasonal chocolate, Chocolate biscuits, Chocolate cakes and cake
bars, Cocoa powder, Chocolate drinks, Chocolate chilled desserts, Chocolate ice-cream,
Chocolate spread, and Cereal bars. Some chocolate manufacturers also provide services in the
form of factory tours / attractions, or have their stores / e-commerce sites. Your report should
focus on one sub-market within the chocolate industry.

The report should be 4,000 words (maximum) and must be completed individually. The
assignment must contain the following components:

1. Internal environment analysis – 30% of the total mark

 The company's current situation and the key challenges it needs to overcome (if
any)
 Any existing purpose statements the company has e.g. vision and mission
statements, core values and strategic objectives and how the purpose statements
inform the company’s challenge(s).
 Using appropriate marketing models such as McKinsey’s 7S Framework and/or
Barney’s VRIN Framework to conduct company’s internal environment capability
analysis, including resources, core competencies, sustainable competitive
advantage, etc. These analyses should point to the
company’s strengths and weaknesses.

2. External environment analysis – 30% of the total mark

Using appropriate marketing models, such as PESTLE, Porters Five Forces- Benchmarking,
competitor analysis, to include the analysis of:

 MACRO environment analysis:

- (PESTLE) analysis to identify key drivers of change

(based on possible level of impact)

 MICRO environment analysis:

- Industry (Five Forces) analysis to understand intensity of competition and relative

attractiveness of market.
- Customer (Segmentation) analysis to share a summary of current customers/users utilising
segmentation variables.

Summarise the macro and micro analyses by clearly articulating what they represent in terms
of opportunities and threats for the company.

3. Recommendation – 30% of the total mark

Taking into account the analysis of the internal and external environment conducted,
recommend a new product or service (or modification/improvement or expansion of an
existing product/service) for the chosen company. You need to discuss the following:

 SWOT analysis which summarises the main findings from your internal and
external analyses. The SWOT analysis will facilitate identification of key
marketing opportunities.
 new marketing idea, which includes the details of the new proposed
product/service, the opportunity this is responding to, the target market, the
marketing activities best suited to reaching the intended target audience/s.

Presentation – 10% of the total mark

Range and quality of sources, use of Harvard style referencing, correct spelling and grammar,
clarity of writing and presentation, quality of discussion