Cadbury Porter’s 5 Five Forces: (2022) Detailed Overview

Written by portersfiveforcesteam in Porter's Five Forces Analysis

Key Facts

Name Cadbury, Mondelez International
Industry Confectionary
Founded 1824
Headquarters (C ) Buckinghamshire ,United Kingdom- (MI) Chicago,IL,USA
CEOs Dirk Van de Put
Revenues US $28.7billion,2021
Profit US$ 4.31 billion, 2021
Competitors Mars, Nestle, Ferrero Group, Meiji Co.

 

Company Overview:

Headquartered in Uxbridge, United Kingdom Cadbury is part of Mondelez International offering Biscuits, Chocolates, Gums and Candies, Cheese & Groceries and Beverages globally.It was founded by John Cadburyin 1842, later acquired by Mondelez International in 2010 formerly known as Kraft Foods. It is valued at $ 93.29 billion as of December, 2022.Its reported revenues are US$ 28.7billion surged by 7.4% in 2021, reaching the 3rd place in Consumer Food Products industry on World’s Most Admired Companies list by Fortune in Year 2021. Its brand value is estimated at $ 5.73 billion in 2022.

 

 

 Porter’s Five Forces Analysis

Porter’s Five Forces Analysis is used to determine the company’s competitive position reference to it’s Industry for better strategizing the companies’ operations for higher profits and less competition, defined by Professor Micheal E. Porter in 1979,at Harvard Business School.

 

Cadbury Rivalry among Existing Competitors:

 

  • Global Confectionary & Snacks Industry reported a revenue generation of US $ 1.56tn in 2022 with an annual growth rate of 5.09% respectively. The Global Chocolate Market is projected to cross the revenue generation by 187 billion US$ in Year 2026.

Cadbury, Mondelez International is facing tough competition from Mars,Nestle, Ferrero Group, Meiji Co and other companies.

  • Mondelez International Business Segments is operating in 5 main business segments with following revenue contribution share Biscuits 47%, Chocolates 32%, Gums and Candies 10%, Cheese & Groceries 7% and Beverages 4% respectively.
  • Mondelez International Global Operations Year 2021: Europe is the biggest market for the company with a record sales of 11.15 US$ billion, 38.8% of the total revenue .North America generated 8.30 US$ billion which is 28.9% of the total revenues. The AMEA region sale’s were6.46 US$ billion and Latin America 2.79US$ billion, which are 22.5% and 9.8% respectively. Mondelez is operating in 150+ countries,75% is Non-U.S. Market,65% Developed Markets,35% Emerging Markets with 79000 employees.
  • Cadbury Products Portfolio& Great Britain Market: Cadbury offers a wide portfolio of products including chocolate bars, cakes, desserts,drinks and biscuits.The most famous product is Cadbury Dairy Milk which has 23,920 consumers only in Great Britain. Few other famous products in Great Britain are Cadbury Twirl, Cadbury Wispa and Cadbury Crème Egg etc.
  • Marsranked # 4 as America’s Largest Private Companies,gave tough competition to Cadbury by generated a record sales of 45 billion US$ in Year 2022 declared by Forbes. The famous brands by Mars are M&Ms, Skittles, Snickers and Extra are available in 180 countries, declared by Mars Wrigley.
  • Ferrero: The Ferrero group also gave a record sales of 12.7 billion Euro, a growth of 3.4% compared to previous year, reported by Mr. Giovanni Ferrero, Financial Year end August 31, 2021.The company is present in 50 countries and selling in 170 countries via distributors, offering famous brands are Ferrero Rocher, Kinder Joy and Kinder Chocolate.

 

Cadbury Threat of New Entrants:

 

  • Established Brands: As already big established brands like Mars, Nestle, Ferrero, Hershey and others are present in the market threats from new entrants are minimal.
  • Healthy Life Style Product Offerings: Any new trend development or any product which offers a healthier option can be a new entrant, even competing with giants for market share will be challenging.
  • High Capital Investment – Economies of Scale: New entrant will require high capital investment and even though can’t compete giants which are enjoying economies of scale.

 

 

Cadbury Bargaining Power of Suppliers:

 

  • Sustainable Supply Chain: The Company is paying special attention for sustainable sourcing of the raw materials which is 75% in cocoa sourcing, Year 2021. The Company launched Cocoa Life Program with aim to source 100% cocoa sourcing by 2025, from Cote d’Ivoire,Ghana, Indonesia, Brazil, the Dominican Republic and India.
  • Sourcing Raw Material: Other ingredients including Palm Oil is sourced from Malaysia and Indonesia with a goal to maintain a 100% traceability, Wheat from Europe (Belgium ,the Czech Republic ,France ,Italy ,Poland, Spain and Hungary) and Hazelnut from Turkey with initiatives to address human rights risks.
  • Supplies Industry Influencer &Educator: Due to the nature of the Supply Chain and majority of the raw materials are sourcing from farmers and developing sector Cadbury, Mondeleze is the terms dictator so there are no threats from Suppliers or forward integration.

 

Cadbury Bargaining Power of Buyers:

 

  • Largest Buying Pool: Due to largest Confectionary company Mondeleze holds a largest buyer’s pool also which is scattered worldwide ,but due to the nature of product any controversy may grab the media and regulatory authorities attention and affect the company’s present competitive position.
  • Boycott Cadbury Twitter Trend faced by the company in Oct, 2022 in India due to a misunderstanding that beef is included in the product. Later Cadbury issued a report and declare all their products are 100% vegetarian.
  • Outbreak of Salmonella Typhimurium: Chocolate Industry face a global product call back after the outbreak of Salmonella Typhimurium sequence type 34 infection in March,2022 after UK notified to WHO. This outbreak has been experienced in Europe and United States of America. Any such events increase bargain power of buyers.
  • Price Sensitivity is not very important for the customers, but as increasing competitors are offering the same product may affect the brand loyalty.

 

Cadbury Threat of Substitute Products or Services:

 

  • Cereal & Fruit Bars: New alternates like Cereal bars and fruit bars are potential threat as substitution. Chocolate industry also should try to make their products more health prone by including vitamins and anti-oxidants.
  • Obesity and Post-Pandemic Consumer Patterns: Obesity is one of the increasing issue, which surged by COVID-19 and there is huge change happened in life style and consumption patterns of the consumers.
  • Product Differentiation is one of the important factor which should be continuously focused on by adding more organic raw-material rather than using synthetic colours. Increasing trend of diabetics and allergy sufferers should be target by Product differentiation to retain the consumer base.

 

References

 

  1. Statista (May,16 2022).Mondelez International’s net revenue worldwide 2011-2021| Statista. [online] .Available at: Statista.
  2. Macro Trends, December 05, 2022, Mondelez Net Worth 2010-2022 / Macro Trends. Available at Macro Trends
  3. Confectionary & Snacks–WorldwideStatista. [online]  Statista.  Statista. Available at:Statista
  4. Fortune 2021 World’s Most Admired Companies
  5. Statista (Oct ,12 2022).Brand value of Cadbury worldwide from 2018 to 2022| Statista. [online] .Available atStatista
  6. Statista (Nov 30, 2022).Cadbury products ranked by number of users in Great Britain from 2018 to 2020 | Statista. [online] .Available atStatista
  7. Mondelez Slavery Report
  8. Statista (July 27, 2022).Market share of leading chocolate companies worldwide in 2016| Statista. [online] .Available at.Statista.
  9. Forbes Profile Mars
  10. Ferrero Group Growth in 2020/21
  11. Mars, Home , Our Brands, Mars Wrigley
  12. Hindustan Times ,Oct 20,2022“Boycott Cadbury” trending as Twitter users claim ad has link with PM Modi
  13. Multi-country outbreak of Salmonella Typhimurium linked to chocolate products –Europe and the United States of America, April 27,2022, WHO

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