23082015 PEST Analysis of Cadbury

httppestleanalysiscompest-analysis-cadbury 14

P H O T O L E E M C C O Y

By Jim Makos | Dec 31 2014

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Cadbury is synonymous with chocolateconsumption worldwide Openingshop in the early 19th century Cadburyhas emerged as a global brand withfactories and offices the UnitedKingdom and North America and anotable presence in Asia and Africa aswell In 2008 the Schweppes brandwas sold to the Dr Pepper Group andin 2010 Cadbury was acquired by Kraftfoods in the US Hence Cadbury andits range of products are now owned by

the American confectionary giant

The following is a PEST analysis of Cadbury which also will help to shed light onvarious external factors that affect the chocolate industry We will make specialemphasis on Cadbury UK as this is where the company originally began

In the context of the UK the change of government from the Labour party to theConservativeLiberal Democrat is bound to influence Cadburyrsquos operations By lastestimates the 8 Cadbury factories in the UK had employed 3000 workers Howeverthe stringent restrictions on the entry of skilled workers from rest of Europe can affectCadburyrsquos hiring decisions in the future

The imposition of taxes is yet another political factor that will determine how Cadbury

P E S T A N A L Y S I S

PEST Analysis of Cadbury

POLITICAL

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23082015 PEST Analysis of Cadbury

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manages its investment and payment to shareholders For example Value-added Taxrose by 25 in 2010 and increased chocolate prices and reduced sales And even beforethat in 2007 Cadbury Schweppes decided to outsource a major portion of itsaccounting and HR to an Indian firm in the face of increasing operational expenses andreducing margins If other business units follow suit this can result in a loss ofhundreds of jobs across the globe But conversely it will also create new employmentopportunities in countries like India

Even though the global economic downturn did affect Cadburyrsquos expansion plans(owing to a reduction in disposable income of customers and other stakeholders) salesactually remained quiet steady

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In fact Cadbury was able to gain a 30 increase in its annual profits predominantlyfrom the sales of Dairy Milk and Trident But even then recession did play its part asthe company managed only to hit the lower end of its 4-6 revenue for 2009 thepeak of the recession And while Dairy Milk chocolate and Trident Gum sold well otherbrands like Halls also saw a rise in their annual sales

In one respect Cadbury was born as a result of social factors Being run by a Quakerfamily their opposition to alcohol served as the basis of running a business that soldtea coffee cocoa and liquid chocolate But while chocolate and other products sold bythe company are socially acceptable worldwide Cadbury has been on the receiving endof controversies the recent one involving Cadbury products being lsquoHalal Certifiedrsquo tocater to Muslim markets around the world

In addition there are also concerns in the western world owing to rising cases ofobesity especially among children Many nutritionists recommend people to reducetheir consumption of chocolate and candy which is likely to affect Cadbury sales in thefuture

Finally technology has changed Cadburyrsquos production and packing process over theyears starting with the introduction of new brew machines to blend coffee and cocoagains Recent moves in this regard include the use of pathogen testing systems andfiling patents for heat-resistant chocolate

In this PEST analysis of Cadbury we saw how this leading chocolate company hasdealt with external factors in the UK and in many other countries as well Of course theformat of the presentation barred us from discussing how the acquisition of Kraft Foodswill affect company performance in the future

ECONOMIC

SOCIAL

TECHNOLOGY

CONCLUSION

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23082015 PEST Analysis of Cadbury

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23082015 PEST Analysis of Cadbury

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