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SWOT analysis of Cadbury

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SWOT analysis of Cadbury

Welcome to the home of Cadbury - choc-full of history, news and tasty treats!

- Cadbury

To make the right decisions and form effective strategies, a business needs to understand its strategic position. In doing so, one should do research and conduct analysis. Some useful tools to analyze the strategic position of a business are SWOT and PESTLE analysis. In this case study, we will analyze the strategic position of a famous British brand, Cadbury.

Introduction to Cadbury

Cadbury is a British multinational confectionery company. It was founded in 1824 by John Cadbury who opened a grocery shop in Birmingham, England. Among other things in the shop, there was also cocoa and hot chocolate which were prepared by the founder himself, using a pestle and mortar. Currently, Cadbury offers many chocolates and drinks such as Cadbury Eggs, Cadbury Dairy Milk chocolates, Flake, Wispa, Twirl and Eclairs chocolates, and Cadbury Bournville drinking chocolate. Cadbury is now available in more than 30 countries and its top three markets are the United States, Australia, and India. It is fully owned by Mondelēz International which is one of the world's largest snack companies.

SWOT analysis of Cadbury

SWOT analysis is a tool that assists you in assessing the Strengths, Weaknesses, Opportunities, and Threats of an organization. It can aid you in obtaining insights based on the current position of the company and in figuring out possible outcomes to prevailing or potential problems.

Whereas strengths and weaknesses are internal factors, opportunities and threats are external.

To learn more read our explanation on SWOT analysis.

Strengths

One of the company's biggest strengths is its strong brand. Despite numerous competitors such as Mars, Nestle, Kraft, Ferrero, Hershey and Lindt, Cadbury remains one of the world's leading confectionery brands and is recognizable all around the world. Having said that, consumers from countries from different parts of the world are familiar with Cadbury, its products and their taste.

Secondly, Cadbury has a global presence. Since Cadbury's products are available in many countries besides its home country of the United Kingdom, the company operates internationally. In doing so, Cadbury generates profit from numerous markets worldwide. Moreover, it is at low risk of failure as if it lost one of its markets, there would still be plenty to recover its losses from.

Lastly, Cadbury is owned by a wealthy parent company. It is fully owned by Mondelez International which is one of the world's largest snack companies. Besides generating high profits itself, in case of any adversity, Cadbury is additionally secured by Mondelez that gives it strong backing.

Weaknesses

What makes Cadbury weak, from one aspect, is its limited product range. Although customers enjoy a variety of confectionery products, the company could expand its operations into developing and manufacturing other products, for example, food and beverages. Considering current food trends such as promoting a healthy diet and growing health awareness, the expansion could allow Cadbury to secure a stable position in the market.

Another aspect is that Cadbury tends to recall its products. There have been numerous cases when the company's products were recalled because of various reasons. For example, despite being labelled allergen-free, they contained nuts. Such issues can make consumers lose trust in the brand and negatively influence its reputation.

Finally, Cadbury does not have rights in the US. Cadbury chocolate in the United States is produced by the Hershey Company which acquired the right in 1988, which refrains the company from expanding in the American market. According to complaining customers, Cadbury chocolate produced by Hershey does not have the original Cadbury taste. This way Cadbury loses out on a big market, the US.

Opportunities

A significant opportunity for Cadbury is emerging markets. Whereas in the past, markets in regions such as East Asia and Africa did not play any role for big food brands like Cadbury, they are now becoming more and more attractive. As one of the effects of globalization and economic growth, the incomes of consumers from these regions are growing, which makes them able to afford Cadbury's products. Having said that, emerging markets encourage expansion which is associated with additional revenue streams.

As mentioned previously, one of Cadbury's weaknesses is its limited product range. Therefore, the confectionery company could expand its product range, which not only would solve the weakness but also allow further expansion. Introducing new products such as food and beverages would make Cadbury's offer more diverse and perhaps attract customers other than chocolate lovers. Not to mention additional revenue that would be a huge benefit of such an expansion.

Threats

Cadbury's biggest threat is probably the sugar tax. More and more governments propose to increase taxes on sugary products. Sugar taxes increase the costs of manufacturing and make Cadbury charge higher prices. This could discourage customers from purchasing its products and lead to a reduction in consumer demand, which would lower the company's profits.

Another threat to Cadbury is current food trends. Since Cadbury offers confectionery only, people who try to follow a healthy diet and who are aware of their health are unlikely to buy its products. Moreover, even if they do, it would not be happening on a daily basis. That is why current food trends could potentially reduce consumer demand for Cadbury's products.

PESTLE analysis of Cadbury

PESTLE analysis is used to examine the external environment that may have an impact on the business's operations. The analysis includes six factors: political, economic, social, technological, legal and environmental.

To learn more about PESTLE analysis, read our explanation about strategic analysis.

Since SWOT and PESTLE analysis both include the external impacts on a business, some factors mentioned in SWOT can be repeated in the PESTLE analysis.

Political

One of the political factors which could affect Cadbury is the already mentioned sugar tax. In general, any political changes and the implementation of any taxes, regulations and laws by governments in countries where Cadbury operates could have an impact on the company.

Because of Brexit a lot of the labor force from the European Union left the United Kingdom. As a result, Cadbury lost many employees.

Economy

As already mentioned, emerging markets are a great opportunity for Cadbury to expand. The economic growth of developing countries makes their citizens generate more income and consequently, customers being able to afford Cadbury's products.

Social

Drawing from the SWOT analysis, current food trends such as promoting a healthy diet and growing health awareness can increasingly affect Cadbury. If more and more people cut down on or even give up sweets, Cadbury's profits will slowly decrease. However, the brand can also adjust its products to fulfill customers' needs.

Cadbury has recently launched its vegan bar to supply the increasing consumer demand for plant-based products.

Technological

When it comes to technology and its development, this is a factor that has had and probably will continue to have a positive impact on the company. Technological developments such as the introduction of new machines and general automation has changed Cadbury's production and packing processes. It has not only made them quicker but also cheaper and more effective.

Legal

In general, legal factors are similar to political factors. For example, a legal factor affecting Cadbury is the sugar tax and any other taxes and regulations in the countries it operates in. Additionally, laws in some countries may require companies to keep certain standards of their products.

Foods produced in the United States are allowed to be more calorie-heavy than those in the UK.

Environment

The production of any good is associated with environmental pollution. Therefore, Cadbury has to pay attention to laws and policies in every country it operates in and adjust its processes to them.

The company might have to make its packaging recyclable to reduce waste or switch to renewable energy sources in its factories to reduce its carbon footprint.

Having analyzed Cadbury's strategic position, both SWOT and PESTLE analyzes identified some positives and negatives.

When it comes to SWOT analysis, there are many strengths and opportunities, and weaknesses and threats affecting the brand. Along with Oreo, Cadbury being a huge booster in Mondelez's revenue seems to be doing well. However, it is worth bearing in mind that some of the negatives are yet to come and can potentially pose a danger to the future existence of the company. Therefore, the company should use some of its strengths and take advantage of opportunities in order to reduce weaknesses and minimize threats.

Regarding PESTLE analysis, some of the external factors, especially the economy and technology, can have a positive impact on the company. Nevertheless, Cadbury should pay attention to any laws, taxes, regulations, political changes and social trends in order to keep prospering.

SWOT Analysis of Cadbury - Key takeaways

  • Cadbury is a British multinational confectionery company that offers many chocolates and drinks such as Cadbury Eggs, Cadbury Dairy Milk chocolates, Flake, Wispa, Twirl and Eclairs chocolates, and Cadbury Bournville drinking chocolate.
  • SWOT analysis is a tool that assists you to assess the Strengths, Weaknesses, Opportunities, and Threats involved in any organization.
  • Cadbury's strengths are its strong brand, global presence and ownership by a wealthy parent company, whereas weaknesses are limited product range, product recall and lack of US rights.
  • Cadbury's opportunities are emerging markets and product range expansion, whereas its threats are sugar tax and new food trends.
  • PESTLE analysis is used to examine the external environment that may have an impact on the business's operations. The analysis includes six factors: political, economic, social, technological, legal and environmental.

Sources:

https://www.mondelezinternational.com/Our-Brands/Cadbury

https://www.cadbury.co.uk/

https://www.ft.com/content/1cb06d30-332f-11e1-a51e-00144feabdc0

https://www.marketingweek.com/kraft-completes-takeover-of-cadbury/

https://www.marketingweek.com/cadbury-ditches-free-the-joy-in-favor-of-tastes-like-this-feels-as-it-launches-new-brand-campaign/

https://www.food.gov.uk/news-alerts/alert/fsa-aa-95-2019#:~:text=Mondelez%20UK%20is%20recalling%20Cadbury,with%20an%20allergy%20to%20nuts .

https://www.businessinsider.com/cadbury-chocolate-different-in-us-vs-uk-evidence-2018-5?r=US&IR=T

https://www.kerry.com/insights/kerrydigest/2018/the-state-of-sugar-and-health-taxes-around-the-world

https://www.confectionerynews.com/Article/2021/04/28/Cadbury-and-Oreo-brands-boost-Mondelez-s-revenue-in-first-quarter#:~:text=With%20net%20revenue %20to%20%247.24,of%20Give%20%26%20Go%20and%20Hu.

Frequently Asked Questions about SWOT analysis of Cadbury

 The weaknesses of Cadbury are limited product range, product recall and lack of US rights. 

SWOT analysis is a tool that assists you to assess the Strengths, Weaknesses, Opportunities, and Threats involved in any organization.

Cadbury is a British multinational confectionery company that offers many chocolates and drinks such as Cadbury Eggs, Cadbury Dairy Milk chocolates, Flake, Wispa, Twirl and Eclairs chocolates, and Cadbury Bournville drinking chocolate.

SWOT analysis is a tool that assists you to assess the Strengths, Weaknesses, Opportunities, and Threats involved in any organization. SWOT analysis of Cadbury is one such example.

Some competitors of Cadbury's are Mars, Nestle, Kraft, Ferrero, Hershey and Lindt.

Final SWOT analysis of Cadbury Quiz

Question

What products does Cadbury offer?

Show answer

Answer

Cadbury is a British multinational confectionery company that offers many chocolates and drinks such as Cadbury Eggs, Cadbury Dairy Milk chocolates, Flake, Wispa, Twirl and Eclairs chocolates, and Cadbury Bournville drinking chocolate.

Show question

Question

What is SWOT analysis?

Show answer

Answer

SWOT analysis is a tool that assists you to assess the Strengths, Weaknesses, Opportunities, and Threats involved in any organization. It can aid you to obtain insights from the prior situations and figure out possible outcomes to prevailing or potential problems.

Show question

Question

What kind of factors can SWOT analysis help to identify?


Show answer

Answer

Internal and external

Show question

Question

What are some strengths of Cadbury?

Show answer

Answer

  • strong brand
  • global presence
  • its ownership by a wealthy company

Show question

Question

What are some weaknesses of Cadbury?


Show answer

Answer

  • limited product range
  • product recall
  • lack of US rights

Show question

Question

What are some opportunities for Cadbury?


Show answer

Answer

  • emerging markets
  • product range expansion

Show question

Question

What are some threats to Cadbury?


Show answer

Answer

  • sugar tax
  • food trends

Show question

Question

Give an example of a brand competing with Cadbury.


Show answer

Answer

Any of:

  • Mars
  • Nestle
  • Kraft
  • Ferrero
  • Hershey
  • Lindt

Show question

Question

What are the six factors of PESTLE analysis?

Show answer

Answer

  • political
  • economic
  • social
  • technological
  • legal
  • environmental

Show question

Question

How can Brexit influence companies such as Cadbury?


Show answer

Answer

Because of Brexit a lot of labour from the European Union left the United Kingdom. As a result, Cadbury lost many employees.

Show question

Question

Give an example of a region with emerging markets.

Show answer

Answer

Any of:

  • East Asia
  • Africa

Show question

Question

How does technology affect Cadbury?


Show answer

Answer

Technological development such as the introduction of new machines and general automation has changed Cadbury’s production and packing processes. It not only made them quicker but also cheaper and more effective. 

Show question

Question

What did Cadbury do to adjust to the current food trends?


Show answer

Answer

It has recently launched its vegan bar to supply the increasing demand for plant-based products.

Show question

Question

What can Cadbury do regarding the environment?


Show answer

Answer

  • make their packaging recyclable to reduce waste
  • switch to renewable energy sources in its factories to reduce its carbon footprint.

Show question

Question

What are the top three markets of Cadbury?

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Answer

United States, Australia and India

Show question

Question

Who owns Cadbury?

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Answer

Mondelez International - one of the world's largest snack companies.  

Show question

Question

Why does Cadbury lose its market in the US?

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Answer

It is produced by Hershey in the US, which does not have the authentic Cadbury taste.

Show question

Question

Name an instance which has led to customers losing their trust in the company.

Show answer

Answer

Despite being labelled allergen-free, they contained nuts. 

Show question

Question

What is the sugar tax?

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Answer

It is the tax imposed on sugary items.

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Question

The changing food habits pose a threat to Cadbury.

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Answer

True

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Question

Name a few markets Cadbury could explore.

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Answer

East Asia and Africa.

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Question

The sugar tax is a threat as well as a political factor that affects the brand.

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Answer

True

Show question

Question

How do emerging markets help Cadbury economically?

Show answer

Answer

The economic growth of developing countries makes their citizens generate more income and consequently, customers being able to afford Cadbury's products.  

Show question

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