This SWOT analysis of Cadbury dives into the inner-workings of the popular sweet goods brand to better predict its future!
Cadbury is one of the world's best-recognized confectionery brands. With a wide range of chocolate bars in its product range and a geographical presence spanning Europe, Australasia, and North America, the company is extremely well established. As a result, you might think Cadbury is here to stay for good but is it?
In this article, we'll use SWOT analysis — which reviews the Strengths, Weaknesses, Opportunities, and Threats affecting a business — to dive into the inner-workings of Cadbury. With that, we'll be able to better predict the future of this popular sweet goods brand!
Jim Makos
Cadbury's Strengths
Strong Brand
As one of the world's leading confectionery companies, Cadbury has an extremely powerful brand. Consumers across the globe have come to associate its name with a specific taste, meaning that they know exactly what to expect when picking a Cadbury product off the shelves. The value of a strong brand cannot be understated, especially in a market where quality is so important. Importantly, the Cadbury product line also features products with their own equally established brands such as Oreo.
Global Presence
Cadbury's powerful brand and well-established operations are not just limited to the United Kingdom. The confectionery giant operates in over 50 countries with a universally positive reputation, as shown in the PEST analysis of Cadbury. This global presence not only drives additional revenue but also acts as an insurance policy for the company: if one country were to implement unfavorable regulation, Cadbury would still be able to drive revenue across the remaining markets.
Wealthy Parent Company
Cadbury is wholly owned by Mondelez International (better known by its former name, Kraft Foods Inc) — an international food giant. Featuring numerous other brands with household names, Mondelez International drives over $26 billion a year in revenue. These impressive revenue statistics ultimately result in large profits, which can be reinvested into any of the company's subsidiaries. As a result, Cadbury has a significant bankroll behind it in the face of any adversity.
Cadbury's Weaknesses
Limited Product Range
Cadbury has been repeatedly criticized by business analysts for its limited product range. While the brand offers a variety of confectionery products, it has not expanded into developing or manufacturing products of other kinds (food or otherwise). As a result, Cadbury is highly exposed to the confectionery market in times both good and bad. In the face of growing health consciousness, this may have serious consequences (discussed further in the Threats section of this analysis).
Product Recalls
Another weakness Cadbury has battled is that of product recalls. In recent years, the company has had to recall a portion of its confectionery products on numerous occasions. These recalls have had varying causes: in one case, products containing nut residues were labeled allergen-free, while in another case, products were believed to have contained harmful bacteria. Product recalls of this nature can easily tarnish a brand's reputation.
Lack of US Rights
For a Western confectionery company, you would think the United States must be one of Cadbury's biggest markets. However, in 1988, The Hershey Company acquired the rights to produce Cadbury chocolate in the United States. Numerous consumers have complained about this, claiming that original Cadbury's products taste significantly different. In any case, this lack of rights means Cadbury will not be able to expand its core chocolate range in the United States.
Cadbury's Opportunities
Emerging Markets
Perhaps Cadbury's biggest Opportunity is that of emerging markets. Historically, regions such as Far East Asia and Africa have not been significant consumers of conventional, Western confectionery — as offered by Cadbury. However, with the widespread effects of globalization and growing consumer incomes, it's more and more likely that Western food brands will be able to expand into these previously untapped markets. Of course, this presents an additional revenue stream.
Product Range Expansion
As discussed earlier, one of Cadbury's potential Weaknesses is its limited product range. This means that one lucrative opportunity for the multinational confectionery might be to expand its product range. Whether this means introducing new confectionery products or — preferably — experimenting with other markets, it will help Cadbury diversify its current market standings and thus prevent a number of Threats while simultaneously driving additional revenue.
Cadbury's Threats
Sugar Tax
A number of countries have proposed implementing a sugar tax — an additional charge on sugary products designed to curb consumption.
The idea has gained significant traction in some European countries; most notably, Norway has had a longstanding sugar tax which encourages individuals to buy confectionery abroad or in duty-free zones. If such a sugar tax were to be implemented in new areas, it would increase the end cost of confectionery for consumers, thereby thwarting sales volume and thus revenue for Cadbury.
Health Consciousness
Perhaps the scariest threat for a confectionery company like Cadbury is that of consumers' growing health consciousness. With the rapid advance of science, consumers have recently come to learn a great deal about what it means to be healthy (or unhealthy). Unfortunately, numerous studies have proven the negative health effects of sweet, processed foods such as chocolate. As consumer preferences shift due to health consciousness, this might mean a serious decline in revenue for Cadbury.
SWOT Analysis of Cadbury: Final Thoughts
Cadbury is no small fish in the confectionery world. However, like all companies, there are a significant number of Weaknesses and Threats to balance out the many Strengths and Opportunities it is facing.
Cadbury's Strengths include its powerful brand, global presence, and wealthy parent company. On the other hand, Weaknesses included a product range confined to the confectionery space, numerous product recalls, and a lack of US rights. Looking towards the future, Opportunities include emerging markets such as Asia and Africa as well as expansion into new products. Threats mainly relate to the company's dependence on the confectionery market, and include both sugar taxes and consumers' growing health consciousness.
Overall, it seems that Cadbury's greatest issue is its limited product range. By expanding into new products (such as healthy confectionery alternatives), it should be able to maintain its strong market position and continue driving impressive profits.
