The paper "Understanding Cadbury’ s Market Position against Its Competitors" is an outstanding example of a marketing case study. External market factors are essential in understanding Cadbury’ s market position against its competitors. In this regard, a number of theories and approaches are consolidated in presenting an in-depth analysis of Cadbury’ s market position. 1.0 External Environment 1.1 Pestle Analysis 1.1.1Political The alteration in the UK’ s governing party has a profound effect on Cadbury. Political decision within the UK’ s political arena could positively or negatively affect Cadbury’ s success. An increased tax level would imply a consequent reduction in sales of Cadbury’ s products.
This has a substantial effect on the number of available units sold to consumers. The increased VAT witnessed in 2010 from 17.6 to 20 % affected its price, which resulted in a decrease in consumer purchasing power. The recent acquisition of Cadbury by Kraft has attracted debates within the government pertaining to takeover regulations. A number of principles affect such regulation. For instance, the government stipulates the fundamental importance of reasonability during takeover (Office of Public Sector Information, 2010). A furthered legal notice on employee working hours could reduce the company’ s productivity.
The UK’ s government highly affects the company since it dispels regulations governing Cadbury’ s operations. 1.1.2Economic The country’ s economic performance affects the company’ s market approach. A global economic slowdown affects business operation and international operation. A growing economy creates a stable market poll forces that increase sales and revenue base. Tentatively, unfavourable economic conditions in one of the markets could negatively impact consumer demand. The purchase of the discretionary item by consumers may decline during the recession, given a lower disposable income. Consumers may reduce spending on discretionary items by shifting to lower-priced items.
Moreover, a disruption in the credit market could impact Cadbury normal commercial relationship with consumers (SEC, 2010). 1.1.3Social The social trend among the crisp and snaking industry tends to increase. UK’ s population is inclined to snacks and crisp, as opposed to chocolate, gums and candy products. Such changes have affected the sales of Cadbury’ s products. The introduction of the Cadbury World is garnered towards increasing consumer experience with Cadbury’ s products. Increased health-conscious consumers may positively or negatively impact Cadburys’ business. Consumers tend to buy and pay more on healthy and quality products. 1.1.4Technology Changing technological innovations tend to improve production and the development of R & D strategies is aimed towards developing superior products.
Contrariwise, the introduction of new machinery in provisioning of blended coffee and cocoa improvesCadbury’ s future growth. Kraft takeover has to suggest increased technological advancement in its production line. The cost-cutting approach through lean manufacturing with the kaizen model will potentially reduce the production cost. Introducing new technology will notably increase investment cost for the purchase and the maintenance of the new equipment. 1.2 Porter’ s Five Forces 1.2.1 Buyer’ s bargaining Power (Medium) It is proposed that buyers are less sensitive to pricing in the case where a product is a small fraction of the buyer’ s cost (Porter, 2008).
In this regard, Cadbury is characterized by two types of buyers namely consumers and retailers. The group of retailers have a profound impact on the Cadbury. Some of its large retailers include Asda and Tesco. As such, the products face increased competition for shelf space and a significant threat to backward integration. This competition directly affects its revenue collected from sales against rival confectionery companies.
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