BS7312C International Business Environment and Trade Assignment Sample
Module code and Title: BS7312C International Business Environment and Trade Assignment Sample
Introduction
Management of a company depends on several areas starting from local to international operations. The current report will be focused on Cadbury, which is considered to be a British Multinational brand under the Confectionery industry and is the second largest brand in this industry worldwide after Mars. The method and reason of Cadbury for abroad expansion will be evaluated along with its relation with the Bartlett and Ghoshal matrix.
Besides, challenges and problems faced by the company along with the aspects of innovation, cross border collaboration and management of specific projects will also be highlighted. Lastly, the company will be critically analysed based on four ethical measures further providing suitable recommendations for future growth.
Findings and analysis
Critical analysis of the reason and method of Cadbury’s abroad expansion
Cadbury is one of the leading brands of confectionery and is having a strong presence in the global scenario. The company consists of high brand awareness and is functioning in several contemporary cultures such as the markets of New Zealand, UK and Australia.
However, the company desires to create the same level of affection and saliency within developing markets that reflect one of the key reasons for expansion abroad (Rogers, 2020). One of the main strategies of the company is to connect different customers in a meaningful way that focuses on chocolate taste. Moreover, the company perceives themselves as a part of the ‘fabric of the nation’, which is one of the most crucial reasons regarding the local and international expansion of the company.
Apart from that, the CEO of the company believes that consuming chocolate is considered to be joyful and the brand needs to be set up in different directions for creating more awareness among the people. However, Khan et al. (2021) argued that gaining international exposure and creating a proper base of demand and supply is another reason for Cadbury to expand abroad. Nonetheless, the company seems to be implementing a different strategy for expanding in different countries. The company has its presence in more than 60 countries worldwide and adopts mainly the strategy of exporting and licensing (Mondelez International, 2022).
For instance, Cadbury used the strategy of exporting and direct licensing to enter the markets of India while exportation and acquisition strategy was adopted by the company to expand within the USA and so on (Jaiswal, 2020). Therefore, the strategy of exporting, direct licensing and others are mainly adopted by Cadbury to expand the company abroad.
Critical evaluation of the appropriateness and relation of Cadbury with the Bartlett & Ghoshal matrix
Currently, the need for globalisation is increasing rapidly that is impacting their operating notion as well. Considering this notion, the Bartlett and Ghoshal Matrix is a framework that deals with clustering businesses in two different criteria such as local responsiveness and global integration (Roque et al. 2019). Business that is highly focused on global integration deals with the objective of reducing cost through the creation of high economic sales by offering standardised products and services worldwide.
On the other hand, Bašic (2022) argued that businesses having high preferences on local responsiveness seem to be adopting the objective of producing products and services that meet the local needs. However, certain companies seem to maintain both the areas and Bartlett and Ghoshal Matrix provides four strategies for those companies. This includes multi-domestic strategy; Global strategy, International strategy and transnational strategy [Refer to Appendix].
From the reports of Cadbury, it can be seen that the company is highly aligned towards local responsiveness while focusing on global integration as well. As a result, Cadbury fits in the model within the area of high local responsiveness and high global integration (Maslin, 2022). It is because the company is observed to be having presence in more than 60 countries that indicates its high global integration nature while launching diverse product ranges based on customers’ preferences indicates high local responsiveness factor of the company.
Nonetheless, this strategic notion is highly appropriate for the company in gaining desired global exposure along with meeting customer satisfaction levels in the local markets. It eventually helps the company to gain high market share that increases the brand value to $5.73 billion in 2022, which is up from $3.87 billion in 2018 (Statista, 2022). Henceforth, the strategy as per Bartlett and Ghoshal is effective for Cadbury.
Ways through which the Cadbury is organised and the way it fits the mentality
Cadbury seems to have a hierarchical structure that clearly shows the person who is in charge within the company along with the person who gives orders and carries them. According to Kanter (2019), hierarchical structure mainly depends on different authority in different levels, which indicates a command chain that connects multiple levels of management within the company.
This type of organisation seems to be following a process of formal decision making that flows from the top to down. Concerning this, Cadbury is organised in a hierarchical way where the higher management of the company possess the right of taking decisions which are executed by the lower department within the company.
Apart from that, Cadbury also seems to be having a decentralised operating system, as the company seems to be having more than 75000 workers around the world (Cadbury, 2022). This notion of the company fits with the global strategy within the Bartlett and Ghoshal matrix. It is because; global strategy indicates decentralised operation within a company with low focus on global integration (Dar, 2019).
This notion of company is also justified because Cadbury in the current scenario is mainly focused on local responsiveness rather than global integration as the company has expanded previously and now meets local customer satisfaction. Henceforth, Cadbury fits in both the area of global strategy and transnational strategy considering the current and previous approach analysed from the current and previous section of this report.
Challenges and problems faced by the company
One of the major problems faced by Cadbury includes unhygienic condition or improper packing. The report of 2003 states that, worms have been found in 8 outlets of Cadbury across Maharashtra (Singh, 2020). Customers within Mumbai complained regarding the issues as worms were found within Dairy Milk bars, which lead to seizing of stocks of the company by Maharashtra Food and Drugs Administration.
However, it was assumed by the FDA commissioner that worms got into organisational storage level while packaging was also not proper that further led to manufacturing defects along with improper packaging and unhygienic condition within the company. As a result of this, Cadbury faced a high challenge in recovering their lost reputation within the market as 30% sales of the company in that year went down (Singh, 2020).
On another hand, Cadbury also faced the issue of recalling 1 million of chocolate bars for Salmonella contamination that seems to have affected more than 40 people, further impacting on organisational reputation (Campaign, 2018). However, the cost in terms of dealing with the contamination seems to be high, depicting an amount of £30 million that seems to be a challenging situation for the company (Jones, 2020).
On the other hand, it can also be noticed that the prices of milk alongside cocoa is rising day by day, which also created issues for Cadbury in terms of maintaining operational expenses. This situation also led to a drop of market share of the company by 2.7% (Campaign, 2018). Henceforth, several issues were faced by the company that led to several measures for recovery.
Management and creation of innovation within Cadbury
Cadbury has been operating since 1824 and is one of the leading confectionery companies in the global scenario. However, to reach the Global Position the company has been coming up with a lot of innovations that are improving their reputation and market share gradually. For instance an innovative technique has been proposed by the company for pressing cocoa through which the company created a new product known as cocoa essence, which in turn seems to gain worldwide success (Rathod, 2020). Several other innovative products are also available within the company such as Cadbury bubbles, Cadbury silk Oreo, which is generally a fusion but still considered as an innovative product and many others.
However, the reports state that Cadbury follows the approach of incremental innovation for shaping and managing its innovative nature (Economic Times, 2020). It is because the company has been noticed to be introducing new lines of extensions within their products and services. According to Lennerts et al. (2020), incremental innovation indicates implementing innovation within a company by making minor or major changes to the existing line of products. For instance, Silk bubbly and Silk Oreo launched by Cadbury is a renovation of the old silk brand (Yonder Consulting, 2022).
The company also invests within the area of R&D to manage innovative concepts and grow sales within different regions (Patton, 2020). Henceforth, Cadbury seems to be creating innovation by altering the taste, format and flavour of its existing products and have been managing innovation through incremental processes.
Cross border collaboration
Cadbury in the current scenario seems to be collaborating with several businesses in order to increase market reach and position further satisfying customers within the market. For instance, collaboration of Cadbury with Oreo led to the creation of Silk Oreo that is one of the biggest successes achieved by the company and generated over £19.3 million among which £4 million were achieved within just 12 weeks after the launch of Silk Oreo (Talking Retail, 2020). On the other hand, Cadbury also collaborated with their agency Ogilvy India for launching their celebration through the use of artificial intelligence (AI).
This collaboration also created the first highly personalised advertisement within the domain of India and led to countless combinations and permutations of the same advertisement for highlighting the selling of products to more than 1800 local retailers across the country (Nair, 2020). Moreover, Ogilvy India also trapped down small businesses to offer the celebration product of Cadbury as a gift hamper to their customers.
For instance, jewellery stores and other businesses have also collaborated with Cadbury for offering their customers the product of Cadbury as a gift hamper. Another local collaboration of Cadbury reflex DeltaX that helped the company to promote several advertisements for gaining exposure within the markets (Nair, 2020). Other than that, collaboration of Cadbury with local stores and selling their products also helped the company to achieve their targeted sales and revenue margin within the market.
Ways through which Cadbury manages specific projects.
Projects within Cadbury are managed with proper ease and planning. Most importantly, the company performs as a team in order to execute the targeted goals and provide the desired value of the products and services. For instance, the project of implementing Cadbury Schweppes aims at growing the market share of the company by satisfying customers within the market (Food Processing, 2020). However, it also aims at deriving value through performance and thus the quality, performance, value and integrity were managed within the project.
The company adopted the strategy of working as one team under different geographical locations and executed the project through 50 different organisational tools. On the other hand, the project of operational expansion of the company in New Zealand on the South Island in the city of Dunedin was also executed with proper ease. Total investment of the project was $69 million, which was supported by the New Zealand Strategic Investment Fund with a contribution of $2 million (Food Processing, 2020).
Moreover, the project was also managed by the company with a contribution of $17.5 million for the purpose of environmental works, plants and new buildings. Apart from that, R&D also supported the execution of the project, which was supported by $500000 investment of the company. Apart from that, proper teamwork and collaboration was the base of the project that helped in gaining a successful outcome.
It is because the project increased the production of chocolate crumb by three times and generated revenue of $30 million per year (Food Processing, 2020). Moreover, proper change management concepts were also adopted by the company in order to manage different instances related to the project. Henceforth, the high revenue gained from the project reflects its success in project management and execution by the company.
Critical analysis of the company through four ethical measures
Ethics plays an important role in managing different areas within a business. According to Ferrell and Fraedrich (2021), business needs to comply with several areas in order to maintain ethics such as honesty, integrity, trustworthiness, and loyalty. Cadbury in this area will be analysed through the four ethical measures. In the opinion of Carroll and Brown (2022), Cadbury seems to be maintaining a high level of transparency within its business environment.
For instance, ingredients used within the chocolates are mentioned behind the packaging that reflects honesty of the company in doing business. However, as argued by Ferrell et al. (2019), the scandal of worms found within the chocolate questioned the honesty, trustworthiness and loyalty of the company as Cadbury did not accept the claim of improper packaging.
On the other hand, Cadbury also seems to be maintaining transparency regarding the framing of cocoa and making chocolates from it with a measure of helping farmers to cultivate cocoa. This reflects the loyalty and trustworthiness of the company in making and manufacturing the products and per customer’s need (WordPress, 2019).
On the other hand, Cadbury have also been accused of implementing child labour based on the footage of child working in the farms of cocoa within the supply chain (Thomas, 2022). This questions the integrity of the company along with honesty, trustworthiness and loyalty. However, the company seems to be using proper raw materials and conducting the business in a proper way, still there are certain issues that emerged within the company that questions its ethical measures.
Conclusion and recommendations
From the current report it can be concluded that Cadbury expanded abroad as it wanted to give everyone the taste of chocolates and the CEO also decided to expand for gaining proper market share and business opportunity. The company expanded with the help of exporting direct licence and other considering the nation of expansion. Considering the Bartlett and Ghoshal matrix, Cadbury fits in the position of global strategy and transnational strategy as previously the company used to have high global integrity along with high local responsiveness but currently the company is focused on local responsiveness more as compared to global integration.
Ethical issues in terms of improper packaging, finding worms within the chocolate, contamination of Salmonella and others were faced by the company that in turn questions its ethical aspects of honesty, integrity, trustworthiness and loyalty. Nonetheless, the company also seems to be collaborating with local businesses such as Oreo, Ogilvy India and others that help in achieving high revenue margins within the market.
Most importantly, the company also manages its different projects through teamwork and investment, which reflects the current success of the company. Therefore, it can be recommended that proper quality inspection along with training and development of the workforce can help in overcoming the issue faced by the company.
Reference list
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