CIA – 1-A

Global Business
Topic: Cadbury’s Mode of Foreign Market Entry

Submitted to:
Dr. Gupteswar Patel
Assistant Professor, School of Business and Management
Christ (Deemed to be University), Bengaluru

Submitted by:
Arnav Chandra
2220709
4BBA-G

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 LIST OF CONTENTS

Sl no Particulars Page number

1 Introduction 3

2 Cadbury’s Modes of Foreign Market Entry 4,5

3 Challenges Faced by Cadbury to Enter Foreign Market 6

4 SWOT Analysis of Cadbury to Enter Foreign Market 7,8

5 Suggestions to Cadbury to Enter Foreign Market 8

6 Conclusion 9

7 References 10

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Introduction

1.1 About Cadbury

Cadbury, name synonymous with creamy chocolates

and amazing confectionary products has been
spreading its charm in the world for nearly two
hundred years now. The story started in 1824 when
John Cadbury set about selling tea, coffee and
drinking chocolate from Birmingham England. In
1831, there emerged a legend – Cadbury Dairy Milk.
This sweet white-coloured chocolate bar with its iconic purple wrapping was quickly
embraced by the hearts and palates of Britain, becoming one of their institutions. In time,
Cadbury’s portfolio grew to include such masterpieces as the Egg, fragrance Bunny and
Roses box of delights. All of these creations were a tribute to vice, they showed the blissful
innocent and complete joy. The Cadbury brand reached beyond boundaries, making its cocoa
rich taste spread in more than 50 countries. Cadbury remains a symbol of chocolate’s staying
power even today. It is a brand that makes people look back with fond memories, bring
happiness and companionship. It’s an adventure that has taken Cadbury from a small-town
business in Birmingham to a world powerhouse of the confectionery industry and serves as
just another proof that not all treasures are equally priceless.

1.2 Cadbury’s value analysis from 2018-22

The global brand value of Cadbury continues

increasing at a rapid rate. As per the given graph,
brand value of a company has gone up in 4 years
from 2018 to reach at US$5.73 Bn. nearly fifty-eight
in four years. Several developments are most likely
behind this development. Such factors include
popularity of the Cadbury brand, demand for its
products and competitive landscape. Cadbury is a popular brand and has been regarded for its
quality and taste. This has made it a favourite option for consumption of customers across the
world. The company is also spending a lot on marketing and development. This is preserving
the ‘freshness’ or consumer relevancy of the Cadbury brand. The company has grown in part
owing to the rising interest and demand for chocolate. All people like chocolate, it is a
beautiful treat. The chocolate market is projected to witness a CAGR of 4.3% during the
period till 2027 and achieve an estimated value of US$150.82 billion in calendar year.
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Cadbury’s Modes of Foreign Market Entry

Exporting:

 Cadbury took his first step into foreign markets. It started with a shipment of
chocolates into the neighbouring countries namely Ireland, and Canada in the 19 th
century.
 Cadbury could test the waters in new markets while minimising initial investments
and risk by exporting.
 But it also implied little control over the system of distribution, pricing and marketing
that made this process difficult in order to achieve effective brand name building.

Franchising and Licensing:

 Cadbury licensed its business with many local companies so that they produce and
distribute their chocolates in individual countries.
 This approach offered faster access to the markets and used local knowledge while
on one side, it also involved sharing of profits with a problem of quality control.
 Some of these include Dairy Milk by Mondelez India Foods Pvt. Ltd in India,
which is produced under license from the renowned Cadbury brand.

Joint Ventures:

 Cadbury partnered with local firms to set up production facilities and marketing
channels in other markets.
 This model provided more quality control as well as strategic branding and marketing
while shifting risks and capital assets to the partner’s own.
 For instance, Cadbury Schweppes Beverages Ltd. in India – a joint venture
established with the Indian company Parle Agro by 1996 is an example of such kind
investments (Cadbury

Fully-Owned Affiliates:

 In several instances, Cadbury created its own companies in important areas to have
total operational control.
 Although this approach required the largest expenditure and risk, it also provided the
highest level of control.
 Cadbury Adams USA, founded in 1988, and Cadbury Australia, founded in 1922, are
two instances.

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Accquistion:

 In several areas, Cadbury intentionally purchased established candy firms in order to

quickly increase its market share and establish its brand.
 Although this approach provided a quick access point, it might be costly and provide
difficult integration issues.
 One instance is the 2010 acquisition of Holding, a Turkish chocolate producer, which
greatly increased Cadbury's market share in the Middle East and Eastern Europe.

Changing and Adapting:

Cadbury's capacity to modify its entrance strategy in response to particular market conditions,
risks, and opportunities is the key to its success in international markets. Throughout the
years, they have deftly moved between many strategies, beginning with low-risk exporting
and then advancing towards more control through joint ventures and acquisitions.

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Challenges Faced by Cadbury to Enter Foreign Market

 Cultural Disparities:Cultural differences in taste are enormous. In other markets,

what wins people over in the UK might not have the same effect. There have been
times when Cadbury's traditional flavours haven't appealed to regional palates,
necessitating the introduction of new flavours and product modifications.
 Serious Rivalry:Global behemoths like Nestle and Mars as well as well-established
regional competitors present Cadbury with severe competition. It is challenging for
Cadbury to capture a sizable market share from these competitors as they frequently
have more developed distribution networks and greater market knowledge,
particularly in price-sensitive markets.
 Handling Supply Chains: Keeping up a convoluted international supply chain can be
logistically challenging. It is extremely difficult to guarantee the same level of
freshness, quality, and ethical sourcing of components across a variety of markets,
particularly in light of growing commodity costs and volatile exchange rates.
 Regulatory Obstacles: It can be costly and time-consuming to navigate the many
food safety laws, labelling specifications, and import prohibitions of other nations.
Growth and profitability in new markets can be severely impacted by delays and
compliance problems.
 Brand Dilution and Piracy: It may be challenging to establish and preserve a strong
brand identity in a variety of marketplaces. Local copycats have caused confusion and
brand dilution for Cadbury by copying its designs and packaging.
 Handling Integrations and Acquisitions: It can be difficult to integrate acquired
businesses with disparate systems, cultures, and management philosophies. In certain
post-acquisition circumstances, Cadbury has encountered pushback from employees,
operational difficulties, and cultural conflicts.
 Political and Economic Instability: Expansion can be hazardous in some markets
due to political and economic unpredictability. In some places, changes in
government regulations, inflation, and exchange rates can have an effect on long-term
viability and profitability.
 Shifting Preferences and Consumer Health Concerns: The chocolate business has
been influenced by rising health consciousness around sugar intake. Cadbury has had
to adjust to shifting consumer tastes without sacrificing flavour by launching sugar-
free and healthier choices.

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SWOT Analysis of Cadbury to Enter Foreign Market

Strength:

 Good reputation and brand recognition:

Cadbury's recognisable purple packaging and well-
liked goods like Dairy Milk and Creme Egg have
made a lasting impression on people all over the
world. When they enter new markets, their
tremendous brand awareness offers them a competitive advantage.
 Global reach and well-established distribution networks: Cadbury now has
operations in more than 50 nations, providing them with invaluable expertise and a
solid foundation for future growth. They have solid connections with retailers and
distributors across several markets.

Weakness:

 Restricted product selection: Because chocolate is Cadbury's main focus, they

are susceptible to changes in customer tastes for healthier choices and swings in
the confectionery industry. Their product portfolio might be diversified across
related sectors to lessen this risk.
 High dependency on sugar: Cadbury is susceptible to growing sugar tariffs and
health concerns around sugar intake because of their reliance on sugar-based
goods. Further development of healthier and sugar-free alternatives is essential for
future expansion.

Opportunity

 Growing chocolate demand in developing nations: China, India, and Brazil

are just a few of the emerging economies where chocolate demand is growing,
offering Cadbury substantial growth prospects. It's critical that they develop
their distribution networks in these areas and tailor their services to local
interests.
 Online platforms and e-commerce: These growing industries give Cadbury
new ways to interact with customers directly and increase their worldwide
presence. Effective use of digital marketing can lead to the acquisition of new
client groups.

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 Threats

 Global and Local Competitors Provide a Serious Threat to Cadbury: well-known

rivals such as Nestle and Mars, as well as smaller competitors with well-established
local brands, are all formidable opponents. Success requires differentiating their
products and developing a strong sense of brand loyalty.
 Variations in Foreign Exchange Rates and Commodity Prices: Cadbury's
expansion goals and profitability may be impacted by changes in cocoa prices and
currency exchange rates. It is important to put into practice efficient risk management
techniques.

Suggestions to Cadbury to Enter Foreign Market

 Meet Local Tastes and Preferences: Create product forms and flavours that are unique
to a certain area. Carry out market research to identify local preferences, then launch
goods that meet those needs. In price-sensitive areas, provide sugar-free choices or
lesser quantities.
 Use Sustainability and Innovation: Go beyond chocolate: To meet shifting customer
demands, provide sustainable and healthful snack choices like energy bars or fruit-
based snacks.
 Maximise Pricing and Distribution Strategies: Employ strategic alliances: To get
access to current networks and increase your market share in new areas, collaborate
with regional distributors or merchants.
 Boost Credibility and Brand Presence: Put an emphasis on community involvement:
Take part in neighbourhood gatherings and lend your support to charitable initiatives
to foster customer trust and brand loyalty.
 Handle Market Volatility and Competition: Make a difference with quality and
innovation: To set yourself apart from the competition, highlight premium
ingredients, distinctive flavours, and cutting-edge product features.

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Conclusion

For almost 200 years, Cadbury, the well-known chocolate champion, has captivated palates.
Selling tea and coffee at first, its journey took a modest start in 1824 before taking off with
the introduction of the renowned Dairy Milk in 1831. Over 50 nations still enjoy Cadbury's
creamy delights today, which is evidence of its lasting impact.

Even with its widespread success, Cadbury still has difficulties in other countries. Constant
adaptation is required due to cultural diversity, intense rivalry, and shifting customer
preferences. In order to manage these challenges, Cadbury has used a variety of entrance
strategies, including joint ventures, acquisitions, and exporting its traditional products.

A SWOT analysis identifies Cadbury's advantages—such as its well-known brand and

extensive distribution system—but also its disadvantages, such as its narrow range of
products and reliance on sugar. Opportunities can be found in using e-commerce platforms
and satisfying the growing demand for chocolate in new areas. The most significant risks
stem from fierce rivalry and unstable market circumstances.

Cadbury needs to adapt its products to regional preferences, embrace innovation and
sustainability, improve pricing and distribution tactics, and cultivate brand loyalty through
community involvement in order to overcome these obstacles. Cadbury can continue to melt
hearts and markets by distinguishing itself through quality and innovation, demonstrating that
sometimes the finest successes come from embracing change.

Essentially, Cadbury's international market venture is a delectable story of perseverance,

flexibility, and the timeless value of a well-made chocolate bar. Cadbury can guarantee that
the next chapter of its story is even sweeter than the previous by embracing innovation,
embracing cultural complexity, and keeping ahead of the curve.

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References

A. (n.d.). a project report on Cadbury Chocolate. Scribd.

https://www.scribd.com/document/264888958/a-project-report-on-Cadbury-Chocolate

Cadbury’s audited financial statements. (n.d.).

https://www.sec.gov/Archives/edgar/data/1103982/000119312510020243/dex991.htm

Cadbury. (2024, January 14). Wikipedia. https://en.wikipedia.org/wiki/Cadbury

Cadbury. (2024, January 14). Wikipedia. https://en.wikipedia.org/wiki/Cadbury

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