Cadbury on the Irish market

Résumé du document

Cadbury Schweppes is a global confectionery manufacturer and a soft drink producer in North America. The company is the number-one worldwide for confectionery products. The company is headed by Todd Stitzer, the Chief Executive Officer (CEO), and Sir John Sunderland, the Non-Executive chairman. In March 2008, Cadbury Schweppes has decided to split up its two business lines: soft drinks and confectionery. The confectionery business is organized into four market segments which are called regions. These four regions are BIMA (Britain, Ireland, Middle East and Africa); Europe; Americas; Asia and Pacific. Each region is focused on commercial operations within its geographical and product area. We will focus this paper on the Irish market, which is part of the BIMA region, and its development for the next three years. Cadbury is a chocolate confectionery supplier on the Irish market. We can characterize the Irish chocolate market in terms of products: boxed chocolates, chocolate countlines, chocolate straightlines, molded bars, novelties and others chocolates. The market is valued according to retail selling price (RSP) and includes any applicable taxes. Before we begin to consider new strategies of the company for the period 2008-2011, we need to look at the results of 2007.

Extraits

[...] Chocolate addiction is more socially acceptable than it is healthy. Some chocolate eaters become quite ill and quite obese. Women often report chocolate cravings in the premenstrual week. Chocolate also serves as a surrogate for companionship or affection. The addictive molecules in chocolate include caffeine and another speed-like drug, phenyethylamine (PEA). PEA is related to our own catecholamine neurotransmitters and their amino acid precursors, tyrosine and phenylalanine. PEA has arousal properties similar to catecholamines and may be one of the pleasure substances in the brain. [...]

[...] Nestlé SA is the world number one on the nutrition market. The current CEO of Nestlé SA is Peter Brabeck-Letmathe since April 2005. In 1868, Nestlé set up a sales office in London, and then it became Nestlé UK Limited. In 2006, Nestlé hold of the Irish confectionery market share in value. This means that Nestlé is the second biggest confectionery manufacturer on the Irish market. In 2006, the revenues of Nestlé SA in Ireland were equal at 108.997 million. [...]

[...] Most PEA absorbed from the bowel is destroyed in the blood or liver by the enzyme MAO-B. [...]

[...] Having an external analysis of the actual market and knowing what Cadbury is capable of, the main and obvious development direction which could be interesting for Cadbury would be to reach the sugar-free and/or fitness market. The new direction need to be part of a logical incrementalism. That mean that the development of a strategy, like entering in the fitness market for a confectionary manufacturer such as Cadbury, need to be made by experimentation and learning from partial commitments rather than through global formulations of total strategies (Quinn, 1980). Thus Cadbury need to avoid executing a complete drift with the fitness product. [...]

[...] Overall, the threat of substitutes is moderate. The Irish chocolate confectionery market is extremely concentrated, with the three leading players: Cadbury-Schweppes, Nestle, and Mars collectively accounting for market share in value terms. These companies have diverse product lines, and they are present in many geographical markets. These factors defend their margins against local fluctuations. Switching costs for consumers and retailers are low, however, products differentiated both by inherent characteristics and by strong branding should allow players to maintain their hold on consumers, and so weaken rivalry. [...]