Neil’s Cadbury’s work

7/28/2019 Neils Cadburys work

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Neils Cadburys work.

1.

Closing manufacturing operations in Nigeria, Russia and China in order tosave operation costs.

Quitting of head office in Mayfair and moving to Uxbridge, a cheaperlocation for property/rent.

Radical reshaping of Schweppes leading to axing of more than 5000 jobs.Here Cadbury will be saving cash on wages.

2. The closing of the manufacturing operations in China, Russia and Nigeria will

lead to the loss of many jobs for all people working there. China and Nigeria also

have a poor state of economy and will now lose the economic drive that Cadbury

was providing. Cadbury will also lose many recourses in the process.

Secondly the change in location of the head office will lead to unhappy workerswho live now far away from the new destination. Costs may decrease for the

company but for the workers fuel costs will increase. For those who live too far

away from the new location it may end up forcing them out of a job.

Q.3+4 Neil, I need a lot of assistance in understanding profit margin especially

regarding these questions. As you can see I am tackling this homework early so it

would be great if I could see you before Thursday in order to go over it. If you are

able to help over email that would be even better.

5. Probability is the ability of a business to generate profit or the efficiency of abusiness in generating profit. I have decided that after looking at the evidence in

the article extending the advertising budget will be one of the most effective

strategies. Cadburys advertising team are obviously very innovative and catchy

and the success of the Gorilla advert in 2007 rocketed. It created a 20% approval

in the Cadbury brand according to YouGov and an increase of profit by 9%.

Considering the cost of the advert Cadbury made a large profit out of the advert

and covered the cost with ease. On the other hand cutting the cost of marketing

expenditure administrative costs will have a direct effect on the advertising side.

In order to target an audience and understand consumer interests you need to

carry out extensive market research. Cutting cost in marketing means lessresearch thus making it harder for Cadbury to be completely knowledgeable of

the market. Also considering that Cadburys administrative costs account for 20%

of sales turnover it makes sense to stay in the know and keep the costs thesame.

However the decision to cut operations in Nigeria, Russia and China bring about

various costs for Cadbury in the short term but in the long-term operation in

Poland will be a lot cheaper. The savings here will be very significant and will

save costs in various areas, especially wages and transport costs as it is a lot

closer to the UK. The only risk with this action is that there have been objections

from the trade union and therefore Cadbury cannot rely on this going forward.


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In conclusion I think it would be a good idea for Cadbury to look at 2007s budget

and figures to help decide that the advertising strategies are paying off and cash

spent on general administration should be sustained because it is accounting for

a large portion of the sales revenue.

Exam Questions.

05/06 = 18.06m/1.18 = 15.30 per visitor

06/07 = 17.66m/1.16= 15.20 per visitor

15.30 15.20 = 00.10

1b. Cash flow is the amount of money flowing in and out of a business over a

period of time.

The reason why negative cash flow may have occurred is because the costs have

increased regarding variable costs i.e. wages. This means that the total costs will

increase causing a higher figure.

There also happens to have been liability costs. There are issues that are

unavoidable and often not accounted for. In the case the gas prices have risen

forcing them to invest in a new gas boiler, this is cost number one. On top of that

there were technical difficulties with the gas boiler , this being the second

unexpected cost.

1c. Performance relates to an increase in output dependant on the workforce. To

maximise performance will mean finding a way to encourage the individuals and

give them incentives or maybe finding away to relieve pressure on workers.

The first thing to look at is motivating staff, this can be in the form of financial

incentives or giving employees more responsibility or ownership of the product,

this is known as the motivation theory. One way the managers may motivate

their staff could be using performance related pay. This could involve the

managers giving an employee a 5% pay rise opposed to say 2% for performing

above average. Advantages of this system are that pay is often related to effort,

fewer costs, as less supervision is needed, improvements in motivation and is

useful in getting staff to work towards company objectives. On the other hand

this could cause staff conflict, it may demotivate some staff and it is difficult to

measure performance.

The second thing to look at is the span of control. In the case of the Eden Projectsemployees there is a high span of control. Span of control is the number of

subordinates who a manager is required to supervise directly. The number of

employees at the Eden project is high and includes a varied number of skilled

workers with different responsibilities, this will mean that the level of

supervision will be high considering the fact that there are not many identicaljobs therefore various supervisors will be needed. A narrower span of control is


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considered a lot more beneficial, meaning the number of layers of management

is reduced and each manager has a wider span of control. The benefits of this

approach are that there is more delegation meaning that the staff are given more

responsibility which could result in more opportunity, thus resulting in higher

motivation. Also as you decrease the number of layers between the top and

bottom of the hierarchy the vertical communication improves. Together with thereduction in overhead costs great efficiency will be the result.

To conclude the managers of the Eden project have many opportunities to

improve the performance of their staff and there are many ways to go about it.

As long as they identify the current issues that may be causing a slower efficiency

they can apply these techniques to help improve performance.

1d.

2a. The promotional mix is the coordination of the various methods of

promotion in order to achieve overall marketing targets.

A variety or things will influence Georges choice of elements incorporated but in

Georges case I think his choice will be influenced mostly by objectives of the

campaign and costs and budgets. The article reads that George argues his

watches are of high Swiss quality and are as good as many watches that sell for

much higher prices. George therefore has an aim of conveying this to the public

domain. The key factor involved with this is product awareness. One of the most

effective ways of achieving this is through investing in media use such as

television, newspapers or the Internet. George should invest in advertisingthrough newspapers and the Internet, as this is a lot more effective when trying

to get across information. The main disadvantage of this is that it is rather costly,

especially the use of television advertising. It would not fall in Georges budget.

The second factor that is likely to influence Georges decision moves away from

product and focuses on inevitable factors, this being Georges costs and budgets.

As I have already said for a small business like Georges using television wouldnot be an option for George because he does not have a high enough budget.

These two reasons all tie in as do all of the promotional mix and Georges budget

will determine what he can afford, e.g. newspaper ads over television ads. It may

not necessarily give George a huge disadvantage over the multi national

companies because he man be able to get his ad into a national paper which will

reach a huge number of people.

To conclude it is unfortunate that George does not have the same budget as his

rivals but he needs to not be too ambitious and work his way up the ladder in

order to slowly increase his income, which will be the result of product

awareness in Georges case.

2b.


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2ci. Example 1. His actual sales revenue is less than his budgets sales revenue.

The difference being 593485

Example 2. His costs in wages and salaries have cost him more than budgeted.

The difference being 86995.

2cii.

Q.2d)

Quality assurance is a system that aims to achieve or improve quality by

organising every process to get the product right first time and prevent

mistakes ever happening. In Georges case he has decided that he will need toredesign job roles of assembly workers so that they get everything correct first

time.

To an extent George is correct. When you look at the benefits of quality

assurance and quality assurance systems the benefits tend to be long term

following on after the duration of retraining and redesigning job roles as George

said. For Georges business the workers will feel more ownership in the productas opposed to the inspectors, which will lead them to take pride in the product

they are manufacturing. Before quality starts to really develop it will take some

time before the system i.e. total quality management (right first time method),

gets flowing. On the other hand although long term benefits with the product will

not be seen as far as quality is concerned Georges employees will immediately

feel more involved as they are playing a much bigger part.

Reduction in costs is also another long-term benefit. In the long term George willfind that his products are and recourses are getting waste a lot less and there

will be less need for reworking with faulty goods. Although the benefit that

George is looking for will come after time quality assurance places a huge

emphasis on employee motivation and satisfaction which will be good for

Georges business considering that he motivates his staff financially leaving them

little involvement with the product. One of the biggest issues with financial

incentives are that not everybody can achieve them, only those performing at the

top of the pile will achieve say a bonus, which therefore for some becomes a de-

motivator.

Herzberg, one of the great theorists in business, argued that there are instantly

positive effects on motivation for workers. In conclusion although the type of

long term effects George is talking about are financial, much like his adopted

method of motivation, it would be wrong to say that there will be no short term

benefits with the workforce. There will be a big difference in pride taken by

workers and a big change in motivation and after all in order to progress quickly

like George hopes he will need his workers to have strong motivation causing

them to work harder and harder everyday.


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Note for Neil: You are probably wondering why I have not attempted some of the

questions above. The reason is that It was only today that I realised we had to

answer all questions and today I have been considerably busy and I am not well

as you are aware. I have therefore answered all I have been able to answer in thetime I have had and have decided to stop working now at 00.08 Thursday. I do

apologise and will enjoy going through the questions I have missed tomorrow. I

will be sure to make notes and fill them in tomorrow.

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Neil’s Cadbury’s work