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Contents

History of Cadbury
The Cadbury story is a fascinating story of a family business that grew into one of the biggest, most loved chocolate brands in the world. A story that you will remember as the story of the real taste of life as the business grew, it was moved to a larger factory in Bridge Street in 1847. John Cadbury then took his brother Benjamin into a partnership. And the business came to be 'Cadbury Brothers, Birmingham". In 1853, the Cadbury Brothers received a royal warrant as chocolate manufacturers to Queen Victoria, a royal appointment that the company holds to this day. 22-year-old John Cadbury opened a one-man grocery business in Birmingham, selling tea, coffee, hops, mustard and cocoa. To this list he soon added drinking chocolate which he prepared using a mortar and pestle. Young Cadbury had a considerable flair for advertisement, which inspired him to install a pate glass window in his store - the first in Birmingham. This along with a Chinaman in native costume presiding over the counter created quite a stir and drew a lot of attention. The growing sales and popularity of Cadbury's 'superior quality cocoa and chocolates resulted in the business shifting to a larger warehouse in Crooked Street in 1831.
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Dissatisfied with the quality of products produced by all manufacturers, including their own, the brothers Cadbury took a momentous step which was to change the way the chocolate business was done in England. Following a visit to Van Houten in Holland, they introduced a process for pressing the cocoa butter from the beans to produce cocoa essence, which was really the forerunner of the cocoa they know today. This essence was advertised as - 'Absolutely Pure, Therefore Best'. From the mid 1860's, Cadbury introduced many new kinds of eating chocolate. Not only the more refined forms of plain chocolate but chocolate cremes - fruit flavoured centres covered with chocolate. These exotic chocolates were sold in decorated boxes, which Richard Cadbury with his distinct artistic talent designed. In fact, many of his original designs still exist. Elaborate chocolate boxes were extremely popular with the late Victorians, with designs extending from superb velvet covered caskets with beveled mirrors, to pretty boxes showing kittens, flowers, landscapes or beautiful girls. As the company prospered, the brothers implemented new ideas in their work practices like, office picnics to the country, a sports field, kitchen and well heated dressing rooms for the workers. While these practices are common in organisations today, they were unheard of in the 19th century. Among the many innovations in the factory was the appointment of Frederic Kinchelman, a master confectioner from the continent, who was engaged to impart the secrets of his craft to Bournville. Cadbury was soon making nougats, pistache, pate d'abricot, avelines and other delights. All of the quality that 'Fredric the Frenchman', as he was known, was renowned for. Over the next few years, Cadbury opened up chocolate markets in Australia, New Zealand, South Africa, India, the West Indies, South America, the United States and Canada. Every successful company has its famous brands and Dairy Milk, today one of the most popular moulded chocolates in the world, is one of the biggest Cadbury success stories.
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Cadbury has grown from strength to strength with new technologies being introduced to make the Cadbury confectionery business one of the most efficient in the world. The merger in 1969 with Schweppes and the subsequent development of the business have led to Cadbury Schweppes taking the lead in both the confectionery and soft drinks markets in the UK and becoming a major force in international markets. Cadbury Schweppes today manufactures products in 60 countries and trades in a staggering jdjd

CADBURY IN INDIA
Sixty years ago, the real taste of chocolate as we know it today, landed on Indian shores. An event that carried forward the entrepreneurship and vision born as far back as 1824, when John Cadbury set up shop in Birmingham (UK) to sell among other things - his own cocoa invention. From these modest beginnings emerged Cadbury Schweppes - that is today the leading manufacturer of confectionery and beverages in the United Kingdom. A company that has its presence in over 200 countries worldwide and has made the name 'Cadbury' synonymous with cocoa products in countries across the planet. This is the brand that came to India in 1947 - to a nation that was in its infancy, a market that was ready for the world and a people that were open to new ideas, new products. Within a year of being set up as a trading concern, Cadbury Fry India was incorporated as a Private Limited company, set up for processing imported chocolates and
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Bournvita. The same year saw the launch of Cadbury's Milk Chocolate - a brand that till today defines the taste of chocolate for millions of Indians. Through 60 years of investment in capital and marketing, the scale and scope of their operations has expanded to cover a range of brands in the chocolate, sugar confectionery and malted food drinks segments. They have a majority share in the Indian chocolate market and a significant presence in sugar confectionery and food drinks.

Today Cadbury India Ltd., a subsidiary of Cadbury Schweppes employs over 2000 people across the country. And operates in one of the fastest growing chocolate markets for the Cadbury Schweppes group across the globe. Cadburys went in for intelligent diversification as any other successful company. Cadburys adopted concentric diversification adding new but related products to its existing product line. The company has leading brands in all segments i.e. 5 Star (count lines), Dairy milk (bars), Gems (panned chocolates), Eclairs (toffees), Perk (wafer chocolate), Bournvita (malted food drinks). List of products: 5 Star, Bournvita, Cocoa Powder, Crackle, Dairy Milk, clairs, Fruit And Nut, Gems, Googly, Nut Butterscotch, Perk, Picnic, Tiffins, Truffle, Nutties.

Vision into Action 2007-2011

The VIA plan embodies all aspects of their strategy which they believe will enable them to deliver superior shareholder returns.

Vision into Action plan priorities

Their VIA sets out specific actions for each of its three strategic priorities. Every year these actions are reviewed and updated for changes in market conditions and strategic developments. Here, they describe in more detail the ways in which implementing their priorities over the four years of the plan will enhance their business.

Business Model
They have spent the last five years transforming their company into a focused confectionery business. With their distinct strength across product categories, developed and emerging markets, strong brands, talented people and clear values, they have a business model that is unique to Cadbury. They are confident that in Cadbury plc, they are well-placed to deliver a superior performance, supported by clear opportunities:

The global confectionery category has been growing solidly The strength and breadth of their market positions, across different geographies and categories, help us to capture this growth and deliver high returns; The unexploited potential of their business is significant; and They have the strategy and management to deliver against their plans. Confectionery growth The confectionery market has been growing around 5% p.a., with revenues growing in low single digits in developed markets and in double digits in emerging markets. Brand loyalty, a high level of impulse sales and limited private label penetration mean that confectionery is also a profitable market for companies with strong brands and effective routes to market. Cadburys robust business model Cadburys growth potential is underpinned by its robust business model. They have strong brands and strong competitive positions in the three major confectionery
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categories: chocolate, gum and candy. More importantly, they have a strong presence in faster growing categories such as gum and other better-for-you products. They have strong leadership positions in nearly half of the worlds largest markets. What is more, they have the largest confectionery business in the growing emerging markets with a 10.7% share: a stronger position than that of their key global competitors. In summary, their growth ambitions are underpinned by their favorable category and geographic exposure. Despite near-term economic uncertainty, they continue to believe that in the long-term, confectionery will remain resilient and that by holding or growing their market share they will continue to deliver a strong performance. Their firm intention is to continue to outperform the market by increasing their focus on the highest return areas and reducing the complexity which is evident in many parts of their business. Their vision Their vision is to be the worlds biggest and best confectionery company. Following the acquisition of Wrigley by Mars, they are now the second biggest confectionery business by revenue. However, with significant scale in key markets and a strong global presence, they remain a strong business partner to their customers and suppliers. They continue to reinforce their positions in key markets and maintain their number one position outside the US. While they have every reason to aspire to being the biggest in the long-term, they will focus on being the best in the short-term. Developing their capabilities is a key priority of the business plan, and their progress is evident.
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Deliver superior shareholder returns Their governing objective is to deliver superior shareholder returns. Their VIA plan has created a clear roadmap and focuses the energy and efforts of their teams around the world. They have an advantaged confectionery business which has significant underexploited potential in terms of both revenue and returns. They believe that a balanced delivery of strong growth in revenue and margins, coupled with an increased focus on disciplined capital allocation will allow us to deliver superior returns for their shareholders.

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Organisational Structure
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 It is between hierarchical and flat structure. Flat structure does not have many layers, which means information is sent quickly; with less complications or misunderstandings; therefore it produces the correct result. Due to a Flat Structure communication is easier, with clear information, and there is an understanding between each level. Therefore, when decisions are made, they will be specific to advice/order instructions. Hierarchical structure is based on distinct chain of commands from Managing director to Clerical Support assistants (according to Cadbury). Decisions are made at the top and passed down. Such organizational decisions are usually based on clearly defined procedures and roles. Cadbury organisation is more democratic. Decisions are made as a result of a consultation process involving various members of the organisation. Ideas would be discussed and thought through collectively. Thus, within Cadbury we can find a Democratic structure. Because Cadbury feels that the members of its organization need to understand what theyre doing, the decisions require insividual initiave and team effort by the staff.

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Porters Value Chain

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Marketing Mix
Product Cadbury's offers a wide range of products for many different people. Cadbury's has chocolate aimed at children, 16-25 year olds, 25+, males and females. The products offered by Cadbury's come in many different sizes, the sizes are dependent on the market they are aimed at. Children usually have small appetites so most children's chocolate comes in small packs. A good example of this is the Cadbury's Buttons range. This range started out with just small bags for children and then the bags got even smaller for children. Then Cadbury's released giant buttons and buttons in big bags. This was not only to provide for the whole of the market but to increase sales as well. Giant buttons were aimed at older children and adults, as well as children with very large appetites. Price The main factors that influence the price charged by the company are the costs of they have to pay for advertising, promotion and the market research. The main influencing factors though are the price of the competitors. If the company wants to increase their percentage share of the market, they will have to have competitive prices. It would be no good having the Cadbury's Dairy Milk bar priced at 50p when the Galaxy is only 30p, because the consumers are just going to buy the Galaxy because it's so much cheaper. The price is dependant also on whether the company wants to
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maximize profits or sales. A company wanting to maximise profits would use the cutthroat business of pricing their products at high prices and hoping the consumer buys their product. The price is also dependant on demand. If the product is easily accessible the prices will be very competitive, whereas if the product is difficult to get hold of the prices will be a lot higher. This is same for competition if there is a lot of competition in onearea prices is going to be priced competitively. If there is no competition the prices will be higher. The products tend to be sold where there is demand for them if there is no demand the prices are not going to be very high. The Cadbury's SnowFlake was very difficult to get hold once it was released. This reflected the price it was released at 30p but due to demand the price rose to 38p. Place The products are available everywhere. There is a widely available mass market. After Cadbury's has manufactured the product it is then distributed to wholesalers and supermarket depots. The wholesalers then sell the products to independent retailers and the depots then transport the products to your local supermarkets. Promotion Cadbury uses two methods of advertising. They use above the line and below advertising. Above the line is what the company has to pay for e.g. Television advertisements and newspaper spreads. Below the line is advertising the company does not have to pay for E.g. Point of sale advertising this is advertising where the product is sold, word of mouth, competitions, giving the radio stations free boxes for competitions and asking the DJ's to try one on air and special offers.

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Product Life Cycle The product life cycle shows the sales of a product over time. When the product is launched, sales tend to be slow. If the product succeeds the sales will then grow, until at some point they begin to stabilise. This could be for one of a number of reasons. A rival company could have introduced a similar product or because the market has saturated. Sales will eventually decline because a company will release a new product type. For example when Cadbury's released the 'Fuse' bar it was for people to eat between meals. It was also new because it was the first bar not to use caramel to fuse the ingredients together; instead it used chocolate to fuse the ingredients. Introduction - slow sales to begin with. Growth - Rapid growth Maturity - The market becomes saturated Decline - new products from different company Extension Strategies There are various ways in which we can extend the life of a product. Changing one of the 4P's is the method often chosen, with the promotion of the product being first to be changed to increase slow sales. Releasing the new advert will often boost the sales, but the other methods include aiming the same product at a different area of the market. For example aiming the product at adults by bringing out larger bags. The company could also try putting competitions on the packaging of the product this will encourage people to pick the chocolate bar up and buy it. Cadbury's took Buttons which was struggling and brought out Giant Buttons.
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New Product A product launched by Cadbury's was the 'Fuse' bar. It was released as the first bar to be eaten between meals. The adverts were messed up, to resemble the life of 1625year old. The bar was aimed at that area of the market. The fuse bar had a slightly male bias. The product started out with group discussions, which is where, people in a room talk about the bar. The bar then went through to the marketing strategies and the advertising agency was told to come up with some ideas for the bar. The fuse bar was then released on Fuse day.

SWOT Analysis
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A SWOT analysis is a general and quick examination of a company so they can get accurate information on their strengths, weaknesses, opportunities and threats. It analyses the internal strengths and weaknesses, and the external opportunities and threats.

Internal Strengths Cadbury's has a world known brand name that is associated with quality. Cadbury's also have a large distribution and its bars can be found all over the world. Cadbury's has a very good customer service centre and has a large variety of chocolate bars to suit everyone's taste. Cadbury's is the biggest name in the chocolate market and is the market leader. Cadbury's has very effective promotions on their products. Cadbury's has a very good research and development department leading to new products. Cadbury's has built its name around a high quality almost faultless product quality. Thus, Cadbury is known to follow business ethics. Cadbury offers a large variety of products- chocolates, beverages, malted foods etc. Cadbury products are rich in terms of quality. Considering peoples sentiments, Cadbury offers attractive festive packages. Products are reasonably priced to suit different economic consumer categories. Celebrity endorsements have increased sales and also added glitter to the brand name.
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 Cadbury India has the biggest market share at 60 per cent while Nestle is the second largest at 25 per cent. Amul holds the rest.

Weaknesses Cadbury's has its products priced higher than most of its other competitors. A large range of the Cadbury's products has reached the maturity stage of its life cycle. The costs of the company are too high. Cadbury's are making a low profit per bar due to the high costs. Thus, Cadbury offers a limited variety of products as opposed to other leading competitive brands, e.g. Amul and Nestle that offer an array of products like biscuits, dairy products, etc. One of the major raw materials i.e. cocoa has to be imported, leading to bunched imports & higher inventory. Majority of the markets in india are not a/c, hence can not store chocolates, at least during hot summers, which limits market access Cadbury has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time. The organization has a strong presence in the United States of America, UK and India. It is often argued that they need to look for a portfolio of countries, in order to spread business risk.

External Opportunities
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Cadbury's has still got a lot large room for expansion into South Africa, Asia and South American regions. Cadbury's could look to develop new products in new markets. Due to the growing product range Cadbury's could launch new products. Cadbury's could diversify into new markets e.g. Breakfast Cereal Market. Thus, Infrastructure and potential to expand (other countries and markets) Narrowing down on their most popular and highest selling items (dairy milk) to increase sales (including brand ambassadors) Capabilities to increase range of products manufactured Venture into new segments individually or jointly (food and beverages) Introduce their foreign products in India Targeting urban areas and developing sectors- by working on availability and affordability Increase related category offerings like snacks (cadbury Bytes) Introduce schweppes non carbonic drinks in india Increase the chewing gum market.

Threats Cadbury's have got a lot of competitors in the market and must be wary of their position as market leader. The pricing on their products is too high Cadbury's could lose sales if a competitor was to launch a new product to rival Cadbury's best sellers. Legislation on ingredients could cause huge problems. Healthier options could cause
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problems to Cadbury's with trends tending to favour the new healthier options. New products from competitors could cause problems to Cadbury's as they could begin to lose their market share. Thus, Competitors could use scandals in the past and company problems against the company(worm scandal). This could put the reputation of the company at stake. Stiff competition in the confectionery segment.(Amul, Nestle, etc.) New competition including global majors like mars & hersheys expected to enter the fray due to opening up of the indian economy . The company has large exposure to foreign currency exchange rate risk, mainly on account of imported cocoa beans and cocoa butter in US dollars and Pound Sterling. Significant increase in the food & snacks segmentofferings which means high indirect competition with low cost local players as well as high brand recognition global players. Trends of purchase may change with the ever-changing taste preference of consumers. Changing restrictions and rules from Government quality control boards may result in pressure on the production of the company & cost increase Cadbury is exposed to rise in the cost of cocoa beans, dairy products and other vital ingredients. Increase in modern trade will increase competition especially from global players & will also increase cost pressure thru malls negotiating higher discounts from suppliers.

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PEST Analysis
A PEST analysis shows the external factors outside a company that could affect the business. PEST stands for Political, Economical, Social and Technological. Political This part of the PEST analysis deals with the government influences. These are the laws and the recent changes in the laws: The main laws that will affect Cadbury's are the consumer protection law. These influence changes in food labelling. The food labelling shouldn't be too influential as Cadbury's is expected to label all their goods properly to begin with. Changes in manufacturing laws will also greatly influence Cadbury's as they may have to change the way they produce their cereal. This could lead to the introduction of new mechanical equipment being required or more thorough checks on the current equipment. If new equipment is required it could prove to be very expensive. The Weights and Measures Act, this act should not affect Cadbury's a great deal as all the equipment and scales used should already be at that of the highest standard. The Trade Description Act should not affect Cadbury's, as all the labelling on the products should be correct and thorough giving all the ingredients.
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The Sale of Goods Act, these state that Cadbury's should not mislead the consumer. There are currently 3 conditions. If the government was to introduce a few more it could prove to affect Cadbury's. On the whole though the main act Cadbury's should be aware of is the Weights and Measures Act, and the Food Safety Act. Cadburys should check their equipment regularly and check the food safety regulations. Economic This part of the PEST analysis deals with a range of external factors in the economy. The state of the economy is the main factor. If the country were to go into recession the consumer spending would also drop due to the unemployment. The recession would bring down the sales of a lot of goods mainly the expensive things, which are not a necessity. (E.g. the food manufacture industry would have a major decline in sales, as would the tourism industry and the clothes industry.) The current economy is well in favour of Cadbury's launching a breakfast cereal. The interest rates are low and consumer spending is very high. Other economic factors that could affect Cadbury's launching a product would be a rise in inflation. This is a rise in price over time. Social There is a variety of different social influences, which could affect the consumer, and in turn Cadbury's. A good example of this is the change in eating habits. The primary
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and secondary research both show that consumers are moving towards healthier eating habits. The research shows people want a healthy breakfast cereal. Technological The increase in computers and the Internet could influence sales. The number of transactions taking place over the Internet is high and people can now buy their shopping over the Internet. The use of automation in factories could influence Cadbury's as they could produce more cereal with a smaller work force.

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Ansoff Matrix
The Ansoff Matrix is a model made for companies which want to emphasise on growth. It has four categories which can help the company grow in the market. Existing Product Existing Market New Market MARKET PENETRATION MARKET DEVELOPMENT New Product PRODUCT DEVELOPMENT DIVERSIFICATION

The Ansoff Matrix looks at the growth of a product. Each box represents a different stage: Market Penetration is to sell the existing product to the existing market. Increasing brand loyalty, and the product more often carry this out. Cadbury's have done this by putting emphasis on their glass and half of milk. They believe no other product has the same taste.

Product Development is to sell a new product to the existing market. Cadbury's have done this by releasing the Dairy Milk Orange.

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Market Development is to sell existing products in new markets. Cadbury's have done this by marketing the very successful Cadbury's buttons range and tried selling them to adults. Diversification is to sell a new product to a new market this is a very risky strategy. This is where a breakfast cereal would appear if Cadbury's were to launch one. The Cadbury's breakfast cereal would not be expected to be very successful to begin with due to the more experienced competitors already in the market. A new breakfast cereal from Cadbury's would appear in diversification, as it would be a new product and a new market that Cadbury's are trying to exploit.

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Performance in 2009

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Case Studies
HOW CADBURY WON THE BATTLE OF WORMS

Three years back, Cadbury's found itself in the eye of a storm, when a few instances of worms in its Dairy Milk bars were reported in Maharashtra. In less than two weeks, the company launched a PR campaign for the trade. And three months later, came an ad campaign featuring Big Band a revamped poly-flow packaging. Marketing and communications experts brought together by AICAR and the Subhash Ghoshal Foundation say that Cadbury moved quickly to bear the cost of damage. And thanks to its equity with the consumers, Cadbury's won back consumer confidence, with hit on sales notwithstanding. In October 2003, just a month before Diwali, customers in Mumbai complained about finding worms in Cadbury Dairy Milk chocolates. Quick to respond, the Maharashtra Food and Drug Administration seized the chocolate stocks manufactured at Cadbury's Pune plant. In defense, Cadbury issued a statement that the infestation was not possible at the manufacturing stage and poor storage at the retailers was the most likely cause of the reported case of worms.

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But the FDA didn't buy that. FDA commissioner, Uttam Khobragade told CNBC-TV18, "It was presumed that worms got into it at the storage level, but then what about the packing - packaging was not proper or airtight, either ways it's a manufacturing defect with unhygienic conditions or improper packaging." That was followed by allegations and counter-allegations between Cadbury and FDA. The heat of negative publicity melted Cadbury's sales by 30 per cent, at a time when it sees a festive spike of 15 per cent. For the first time, Cadbury's advertising went off air for a month and a half after Diwali, following the controversy. Consumers seemed to ignore their chocolate cravings. As a brand under fire, in October itself, Cadbury's launched project 'Vishwas' - a education initiative covering 190,000 retailers in key states. But what the company did in January 2004 is what really helped de-worm the brand. By investing up to Rs 15 crore (Rs 150 million) on imported machinery, Cadbury's revamped the packaging of Dairy Milk. The metallic poly-flow, was costlier by 10-15 per cent, but Cadbury didn't hike the pack price. Bharat Puri, managing director, Cadbury's India says, "While we're talking about a few bars of the 30 million we sell every month - we believe that to be a responsible company, consumers need to have complete faith in products. So even if it calls for substantial investment and change, one must not let the consumers confidence erodes."
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Simultaneously, Cadbury's roped in brand ambassador Amitabh Bachchan to do some heavy duty endorsement putting his personal equity on the line for the brand. The company upped ad spends for the Jan-March quarter by over 15 per cent. The recovery began in May 2004, and by June, Cadbury's claimed that consumer confidence was back. These experts believe that the reason for Cadbury's success was that it took crisis head-on. And the consumers were more forgiving, because the brand enjoyed an emotional equity in India. Santosh Desai, former president, McCann-Erickson says, "The nature of the relationship that Cadbury's has built with the consumer is responsible for latitude the consumers are giving it. "They are seeing it as a lapse, not a breach of trust - this difference is key. What Cadbury's set out to deliver, it goofed up once but it seemed to be very sincere in its intent to get things right." Even so, other experts felt Cadbury's was itself to blame for the worm crisis. Mahnaz Curmally, PR counsel, explains, "Cadbury's had known for a long time that
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packaging needed change, so in a sense, they waited for something to happen before they made that change and perhaps in hindsight, they could have made that change voluntarily."

Cadbury's could be case study of a sweet recovery from a crisis. It continues to lead the Indian chocolate market with over 70 per cent market share. However, the experts feel that today's constantly changing environment should keep the company on guard.

INCREASING CONSUMER FRANCHISE Background: Cadbury dominates the chocolate market in India with a 70% share of the market. Cadbury Dairy Milk is its largest chocolate brand which accounts fro a third of every chocolate bar consumed. The Task: In 2005 the task before Cadbury Dairy Milk was to increase its consumer franchise. The Strategy: The task was to get the youth audience to adopt Cadbury Dairy Milk in the sweet eating or " muh meetha karna" moments The campaign of " Jab Pappu Pass Ho jaye, Kuch Meetha Ho jaye" captured the thought of celebrating a moment of delight with Dairy Milk
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 A campaign was built around the idea of how "pappu" celebrated passing his exams with Dairy Milk Aaj pehli tareek hai campaign was built around the idea that on the first of every month, something good happens (ie, the salary arrives) because of which people should celebrate by eating chocolates. The Media: A multi-media campaign was launched on TV, Internet, Radio and Outdoor The key was how do own the moment of " pappu passing his exams" in the media space An innovative tie -up with Reliance webworld was executed, wherein students across 66 examination boards across the company could access their results on Rworld through their Reliance mobiles. If they passed a message congratulating them on their moment of delight from Dairy Milk was displayed The Results: The activity contacted 20 MN students across the country and was awarded a Bronze Lion at the Cannes Media awards in 2005

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Competition
By participant, the market is relatively fragmented, with the five largest confectionery companies accounting for around 40% of the market. There are a large number of companies which participate in the markets on only a regional or local basis.

Before the Cadbury-Kraft buyout, Cadbury was the highest market shareholder. However, after the buyout, which has been explained in the next section, Kraft has become the leading shareholder.
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Cadbury Kraft
Kraft Foods Inc sweetened its 10.2 billion pound ($16.4 billion) offer for Britain's Cadbury Plc with cash, as the U.S. food company's hostile takeover attempt entered its final month. Jan 5 (DAY 32) - First closing date for Kraft's bid at 1300 GMT. Kraft raised the cash portion of its offer by 60 pence per share, with cash from a deal to sell its North American pizza unit to Swiss food giant Nestle. Nestle said it had no intention to bid for Cadbury, ending speculation about one potential rival bidder. Jan 12 (DAY 39) - Last date for Cadbury to publish new information such as profit forecasts and future outlooks, but Britain's Takeover Panel has allowed a three-day extension for Cadbury to include further information. Cadbury expected to publish key financial figures for 2009. Jan 15 (DAY 42) - Cadbury is allowed to publish final information on its defence in this three-day extension. Jan 19 (DAY 46) - Last date for Kraft to give detailed terms of its sweetened offer. Also last date for Kraft to raise its offer unless any competing offer is submitted.
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Jan 23 (DAY 50) - Last date for potential bidders, who have already expressed interest in Cadbury such as Hershey and Italy's Ferrero, to submit a fully financed bid. If either these fail to bid then they have to wait six months before bidding again for Cadbury. Feb 2 (DAY 60) - Date by which acceptances from Cadbury shareholders have to be in to count towards the 50.01 percent which Kraft will need to win. If Kraft fails, it has to wait twelve months before bidding again for Cadbury. This is also the last date for a new bidder to enter the fray. Entry of a new bidder would reset the timetable clock, allowing this new bidder up to 28 days to post an offer document and set the 60-day timetable going again.

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Most acquisitions don't deliver the expected results, according to RHR Intl's research. Here's how both companies' leadership can boost the chances for success:

After months of negotiations, Kraft (KFT) announced that it would acquire U.K. confection giant Cadbury (CBY) with a revised bid of $19.5 billion. The acquisition of Cadbury by Kraft will generate a joint portfolio of more than 40 confectionary brands, each with annual sales in excess of $100 million, essentially creating the world's biggest confectionary company. Both Kraft and Cadbury have a lot at stake to make this deal work. Statistically, deals this complex have a high rate of failure. In fact, research conducted by RHR International found that 70% of acquisitions fail to deliver the expected results. Despite the discouraging data, there is much the leadership teams at both Kraft and Cadbury can do to put the odds in their favor.

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Here is a look at the immediate challenges and what leadership at each company can do to mitigate them: The negotiation process was hostile. Cadbury declined Kraft's initial offer. Compounding the issue was that the dialogue (which was hostile at times) between the two companies played out in the news for months prior to inking the final deal. Fence-mending will need to take place before any real integration can begin. They are iconic brands that have long pursued different positioning. Corporate and national pride behind both companies is strong. For Cadbury, coming to terms with the fact that it may have to merge some of its identity with Kraft could be especially difficult. (Let's face itCadbury is nearly as important to British culture as the Beatles.) Although this issue is largely a marketing/positioning question, it will have impact on the reaction of both organizations to the acquisition. Perceived dominance. Cadbury executives might assume that Kraft will adopt a dominant approach. Kraft will have to make their intentions with Cadbury clear as soon as possible to avoid unnecessary speculation.
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 There is a learning curve. Kraft purchased Cadbury to break into emerging markets, and it will take Kraft some time to learn the nuances of working in those markets. Tough decisions are inevitable. Because Kraft borrowed heavily to buy Cadbury, it may be focused on revenue in the short term. Some difficult decisions could be on the horizon. MAKING THE DEAL WORK Putting the challenges aside, the first 100 days after a deal is announced can determine the success or failure of the acquisition. In this situation, one of the best strategies to bring the two teams together is to identify common goals. Experience shows that the more quickly individuals from both companies get to work together on common projects with common goals, the better the integration will work. At the same time, management must make quick, yet considerate, decisions on divisive issues. There has already been speculation around pending layoffs at both Kraft and Cadbury, which diminishes productivity at all levels. Management will need
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time to determine the best blend of talent, but it is a top priority and must be executed swiftly so that people can move on as soon as possible. At first glance, Kraft and Cadbury appear to be very different companies. But the reality is that they have much in common; after all, they are both consumer-product companies that specialize in confection and packaged foods. The leadership team can capitalize on this by having talent from both organizations work jointly on projects. This will encourage employees to focus on their similarities, rather than their differences.

Finally, employees at Kraft and Cadbury most likely have preconceived notions about the other based on what they have read in the news or heard through industry chatter. It is essential that the leadership team takes the time to discuss the differences in culture sooner rather than later, so that they can focus on similarities. Our experience shows that these differences begin to pale very quickly if they can be addressed early on.

CHALLENGE TO KRAFT'S LEADERSHIP To be successful, Kraft needs to have an open and honest dialogue with Cadbury. This will give people a realistic understanding of what is going to happen, allowing them to make informed decisions about future prospects. Building trust is the only way to prevent the defection of talented people. Kraft will face an immediate disadvantage if Cadbury's top talent leaves because no one knows the details of making a company successful better than those who had a role in its success.
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As the acquirer, Kraft also has the responsibility to provide a detailed road map for integration. This will ensure that everyone understands the process for joining the companies, which will free up the leadership team to address hidden issues. The plan should provide guidance on the effectiveness of executives and managers, the performance of work units and processes, and the management of organizational change. Finally, Kraft will have to unite the two companies under one vision. Communications programs that support the new vision must be planned, initiated, and sustained, and employees that support the vision should be rewarded. Executives and work units must be redeployed where they will be the most efficient. Departments will have to be restructured and processes redesigned in order to align with the new company. A system should be put in place for development of team effectiveness, so that teams are cohesive. Conflict-resolution methods must be developed to ensure quick and effective solutions, while workforce standards are sharpened and common business practices established. Adjustments to the culture should be made when necessary. CHALLENGE TO CADBURY'S LEADERSHIP Integrating after a merger or acquisition is challenging for any organization, even under the best of circumstances. But after the deal is done, it's critical for leadership of the acquired company to publicly embrace the acquisition and show enthusiasm about the future. By focusing on the benefits of the acquisition, Cadbury executives will be better equipped to communicate the value that Kraft brings to the brand.
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Senior executives at Cadbury will need to take symbolic steps to demonstrate their openness to the merger. This might be in the form of meetings, handshakes, companywide memos, public speeches, and even positive quotes about the acquisition in the media. Ultimately, Cadbury should be proud of its accomplishments over the years. Companies become acquisition targets because they have a reached a high level of success.

Executives can retain that pride while still keeping other emotions in check. One thing is for certain: There is no room for egos during the integration process. While there are many challenges to overcome on both sides of the Kraft-Cadbury deal, strong leadership can help to smooth the process. Executives from both Kraft and Cadbury must remember that if the integration is successful, it will be a boon to both the companies, and to consumers.

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CSR
This is the Corporate Social Responsibility shown by Cadbury over the years: Migratory birds stop over at our Bangalore factory! Water is a precious resource. As part of Cadbury India's efforts to continuously increase water conservation our Bangalore factory has constructed a check dam to store the rainwater. This dam not only acts as a major ground water replenishing source for the bore wells in the factories and surrounding community, but is also a stopover location for some of the migratory birds!

Dam at our Bangalore factory

Pioneering cocoa cultivation in India Since 1974 Cadbury has pioneered the development of cocoa cultivation in India. For over two decades, we have worked with the Kerala Agriculture
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University to undertake cocoa research and released hybrids that improve the cocoa yield. Our efforts have increased cocoa productivity and touched the lives of thousands of farmers. Hardly surprising then that the Cocoa tree is called the Cadbury tree!

Bangalore factory: the sun shines at night Acknowledged as 'Preserver of Environment' Sunshine now lights the pathways on streets outside our Bangalore factory at night. Rising energy costs, and 300 sunny days a year, inspired the factory to install 28 solar powered streetlights. It will reduce annual carbon dioxide (a major greenhouse gas) emissions by ten tonnes, playing a part in the effort to reduce global warming. In appreciation of our commitment to implement environment friendly initiatives, the Karnataka State Pollution Control Board has honoured the Bangalore factory with the Parisara Premi (Preserver of the Environment) Award for the second year in a row.

Growing Community Value Everything needs a little nurturing to help it to grow. Our communities are no different. Cadbury India is committed to growing community value
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around the world. For our employees, this is about making a difference in the community. Non-formal school set up by Cadbury for children of migrant workers in Baddi

Thanks to the efforts of the Baddi factory team over 50 children of migrant workers living in and around our Baddi factory will now have daily access to non-formal education. Cadbury has set up a non-formal school as part of our commitment to create prosperous, inclusive and healthy communities. This is the first phase of Project SAHYOG an 18 month project which
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commenced in January this year in partnership with an NGO RUCHI. The project reaches out to over 400 poor & marginalized families in Sandholi village near our Baddi factory and apart from education, the other key interventions will be on village health, sanitation, education & water harvesting. The project was recently inaugurated by Mr B R Verma, Labour Commissioner cum Chief Inspectorate of Factories & Directorate of Employment; Himachal Pradesh in the presence of Mr Sudhir Sharma, Dy Director Industries and senior officials of BBN Industries Association. The Chief Guest appreciated Cadbury's effort to make a difference in the community and encouraged the villagers to come forward and support the initiative. In the coming months the project through a group of 12 SAHYOG CHAMPIONS (colleagues from the Baddi factory) will undergo an orientation program with the NGO RUCHI and will subsequently mobilize Baddi colleagues to volunteer their time in the community on aspects of village health, sanitation and education.

Cadbury in tie-up with Bharti-Walmart to support education needs of underprivileged children

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In an effort to make a small difference to the communities in which we operate we recently tied-up with Bharti-Wal-Mart to support the infrastructure of a government school for underprivileged children in Gurgaon. As part this initiative, we have provided safe and clean facilities to create an environment conducive to learning for the 80 odd children enrolled in the school. This included re-painting the building, cleaning and developing the gardens in the school premises, planting trees and installing swing-sets in the play area. A team of 16 sales colleagues spent a day in the school and truly made a difference!

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Conclusions and Suggestions

By doing a thorough analysis we conclude that Cadbury-Kraft is a company that realizes its dreams responsibly. Points that highlight this are-

1. All operations of the company are in consonance with the vision of being the biggest and the best confectionery company in the world. 2. It has shown remarkable growth because of its enterprising spirit. It has successfully tapped opportunities by utilizing resources, including its human resources, optimally. 3. The company has not lost sight of the long term while addressing short term issues like how it won the battle of worms. 4. Its policies like CSR policy and quality maintenance policy give the best to its customers, employees, shareholders and the community at large. 5. It has undertaken community development, educational programmes, healthcare initiatives and steps to mitigate environmental problems like global warming. 6. It has also kept investors happy by respecting norms of corporate governance and making proper disclosures.
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7. Cadbury has proved its mettle to take on new challenges. Researches conducted by RHR International found that 70% of acquisitions fail to deliver the expected results. Despite the discouraging data, there is much the leadership teams at both Kraft and Cadbury can do to put the odds in their favor. 8. Innovation has also been a key factor in its strategy for survival. Its continuously endeavours to increase the portfolio of its value added products. 9. Establishment of a SA (social accountability) system as a measure to become an increasingly aware and conscientious corporate member of society.

We believe that Cadbury's can launch a new breakfast cereal. The main findings from the PEST analysis and external influences have told us that Cadbury's should be very wary when they choose to launch there breakfast cereal. The main legal factors that should worry Cadbury's are, well there are none. Cadbury's are more than capable of staying on top of any new regulations introduced by the government. If Cadbury's produce a healthy cereal that is also chocolaty I see no reason why they shouldn't be able to take a share of a market that is very biased towards three companies. As for any advertising problems that may arise I can see no reason why Cadbury's cannot over come them.

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Bibliography

www.docshare.com www.cadburyindia.com www.karvy.com www.slideshare.net www.valueexpectations.com

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