Survival of Cadbury from the Hostile Takeover Attempt of Kraft

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Since 2002, the company has undertaken major steps to improve its future prospects. The company made layoffs of about 6,750 employees worldwide and repaid the debt outstanding. Through innovative marketing techniques and product innovation such as the Wispa chocolate re-launch, the company continues to capture more and more markets.
The future prospects for the company are bright as it has shown a growth rate of 12% in the UK and is number one in many countries. The company is currently operating as the market leader in half of the largest confectionery markets in the world. The chief executive of Cadbury Stitzer commented on October 22, 2009, that “the business has great momentum and the new confectionery strategy has yielded results beyond expectations.” This was evident in the sales of the third quarter of 2009, which showed a seven percent rise since the second quarter. As the sales rise in the future and the business grows, the rise in the share price is also expected.

Kraft is the second-largest food group after Nestle and generates US$ 42 billion in sales each year. The company has almost 98,000 employees and 168 plants. Unlike Cadbury, Kraft is not focused on any fast-growing business. Although the sales of Kraft’s frozen pizza have been growing it is losing sales on many other brands. Many of its products are prone to heavy competition from smaller firms (Hughlett, 2009). This makes difficult for Kraft to concentrate on so many products and to come up with innovative ideas of marketing and making products. Many brands of the company have lost their market shares and the future prospects for Kraft do not look very bright either.

Cadbury has been growing because of the employment of its robust business model. The company focuses on three major categories of confectioneries which are chocolate, gum, and candy. The company has strong brands and excellent competitive positions in these categories (Cadbury, 2008).