Industry Analysis: Cadbury Schweppes (CS) is comprised of a global confectionery and beverage company. For the purpose of this case we will maintain our focus on the confectionery business and the assessment of adding to their sugar confectionery portfolio. CS is number three in the beverage business but see the opportunity to become the largest confectionery in the world. The categories are chocolates, sugar and chewing gum. At this time Adams is the number two sized in the gum business. This industry operates on “bigger is better in confectionery”. Their strategic discussions and ambitions appear to stay true, in mentality, to this mantra. This mantra could be potentially dangerous to the business. CS had a presence in over 70 …show more content…
Recommendations: Although Adams has clear benefits should the acquisition go through and the Adams strengths would seemingly be a perfect fit for Cadbury Schweppes. I do not assess Cadbury, at this time to be in an ideal situation to acquire Adams. As well, Adams may not prove as lucrative an acquisition that it appears to be. The pros to the Adams acquisition are that CS would more than double its share of the global sugar confectionery market making it the largest sugar confectionery. The key effect would be that CS would then contest Wrigley’s global dominance. Moreover, the acquisition would allow Cadbury Schweppes to go to the front of the grid in the confectionery market. The acquisition would appear to be valuable to Cadbury Schweppes as Adams had higher sales than it in a number of important regions such as Latin America.
However, regardless of the obvious benefits for Cadbury Schweppes, the acquisition presents significant risks that to me outweigh the grandiose potential of becoming number one. Not only would CS being overpaying for Adams but it appears to not be as profitable after the acquisition takes place. Adams would lose $15M in back office services it currently provides. While it is believed there would be a strong cultural fit at these two companies, CS was not prepared to provide leadership for the merged companies in the expanded Americas
Hershey’s began as a single building, creating chocolate, but soon transformed to thousands of companies around the world. “A founder of one of the world’s largest confectionery companies … He [Milton] was a pioneer in the mass production of milk chocolate, turning it to form an expensive luxury into an affordable, everyday treat” (McMahon). Money was not a factor involved with this creation of greatness but much more the quality given to his customers. Even though the quality was a luxury he felt compelled to allow everyone to experience the flavor. Bringing the cost of chocolate down made many more people able to buy the product. “Milton Hershey was a man who measured success not in dollars, but in terms of a good product to pass on the public, and still more in the usefulness of those dollars for the benefit of his fellow man” (Milton S.). Along with the products growth in cost reduction, the company’s development grew as well. More people were buying the product all over the country so that called for an expansion of the industry. Hershey’s creation is what launched the chocolate industry that continues to expand today. The increase in consumers caused growth around the world therefore adding to Hershey’s
In March of 2012 Steve Parkland was hired as the new president at Charles Chocolates. He was immediately faced with numerous decisions about the future of the company. The board of directors had tasked Parkland with doubling or tripling the size of the company over the next decade, but the board and the senior management team had different opinions about the strategy that would accomplish this goal. The main issues that Parkland faced were how to increase the company’s operations while maintaining the traditional culture and support of the board.
In the late 1990’s and early 2000’s the food industry was struggling with weak sales and low inflation which caused waves of consolidation among some of the largest firms in the industry. In 1998 General Mills studied areas of potential growth and value creation for their company which lead to small acquisitions of other firms. Looking to further grow their company, in December 2000, management of General Mills made a recommendation to its shareholders that they authorize the creation of more shares of common stock and approve a proposal for the company to acquire Pillsbury Company, a producer of baked goods, from Diageo PLC.
Cadbury world could use secondary data effectively by drawing a comparison with other brands to find out how successful those brands are doing and to from there self-evaluate and adjust where necessary in order to improve.
The acquisition of SC has also the potential to add on unique liquor which is mixed by a secret formula and has exclusive rights which (see Appendix?) have a huge synergic benefit to the present BF product mix-line offerings and brand equity. Besides, SC has strengthened channels of foreign distribution and tremendous brand growth in 1977 compared with competitor brands in the same product line. Because SC is not aggressively marketed and that it is wrongly positioned market, because they think it is a whiskey. If acquired, SC could bring in the foreign penetration capabilities and know-how to BF. If aggressively marketed and repositioned SC could add a lot of vale to BF too. SC also has a well reputable brand offering and the management is well run and efficient, equal to that of BF thus the acquisition of SC would fit well in BF style of management philosophy.
2. Kraft’s marketing strategy will benefit significantly from buying Cadbury in two different ways. Firstly, when we look at the brand portfolio of Kraft, which is the world’s second biggest food company. It is clear that there are plenty of old-timer cash cows, such as cheese, Nabisco and Suchard, but there are only very few rising stars. According to the Boston Matrix, cash cow means a product with a high share of a slow growth market, which can generate a stable
The main threat to Rogers’ chocolate is the competition. Not being able to keep up with the competition or current trends can lead to lost market share. With Godiva having superior packaging, distribution, and price points, and Bernard Callebaut having superior packaging and seasonal influence, Rogers’ Chocolate could be falling behind soon if they do not join the ranks. Rogers’ must find their niche in order to be able to compete not just locally, but globally.
Mondelez, who is responsible in making Oreo cookies and Cadbury chocolates, recently sent a letter to Hershey’s proposing a tie-up. In that letter, Mondelez proposed a $23 billion bid for Hershey Co. to create a partnership between both the world’s largest candy making companies during a time when their companies’ sales are both under pressure.
The proposed sale of Hershey Foods Corporation (HFC) during the summer of 2002 captured headlines and imaginations. After all, Hershey was an American icon, and when the company’s largest shareholder, the Hershey Trust Company (HSY), asked HFC management to explore a sale, the story drew national and international attention. The company’s unusual governance structure put the Hershey Trust’s board in the difficult position of making both an economic and a governance decision. On the one hand, the board faced a challenging economic decision that centered on determining whether the solicited bids provided a fair premium for HFC
* Taxes could increase which in theory would lead to sales decreasing and profit therefore decreasing but as chocolate is such a small purchase this is unlikely
The decision to sell the shared faced strong opposition from Hershey employees, local businesses, and politicians. The community did not want foreign company to take over Hershey Company due to the legacy of Hershey involvement in the community will be compromised and many jobs might be lost.
The Scharffen Berger Chocolate Maker is experiencing an exponential year over year growth rate of their premium product. This is a situation that all new businesses strive for and although Scharffen Berger is pleased with their growth, they are facing a potential dilemma. The company must consider how they will keep up with growing demand while having enough capacity to handle the increase in production and maintain their high quality standards.
The two main methods of Polish market data would be to follow primary and/or secondary methods (Baines & Fill, 2014). Due to communication barriers and physical distance between Cadburys UK
The success the Snapple Beverage Company had achieved by the early 1990s drew the attention of the Quaker Oats Company which bought it in 1994 for $1.7 billion, and planned on maximizing the professedly unequivocal synergies between the “funky” iced tea brand and their established Gatorade brand. Despite Quaker’s efforts and ambition, which some might classify as hubris, the company’s decision to acquire Snapple is often regarded as a clamorous example of a merger and acquisition disaster. This paper analyzes Quaker’s failures using the 4 P’s framework, and proposes an action plan for Triarc’s turn-around of the Snapple brand, tailoring it to a modern market setting.
The proposed sale of Hershey Foods Corporation (HFC) during the summer of 2002 captured headlines and imaginations. After all, Hershey was an American icon, and when the company’s largest shareholder, the Hershey Trust Company (HSY), asked HFC management to explore a sale, the story drew national and international attention. The company’s unusual governance structure put the Hershey Trust’s board in the difficult position of making both an economic and a governance decision. On the one hand, the board faced a challenging economic decision that centered on determining whether the solicited bids provided a fair premium for HFC shareholders. On the other hand, the governance decision required the