INTERNATIONAL

BUSINESS AND TRADE

(Monday/Wednesday 10:30AM-12:00NN)

Group Members:
Nuda, Regine G.
Rafol, Alyana Jane A.
Redston, Stephanie L.
Rosalejos, Mary Ann Allyn B.
Villanueva, Angelie E.
I. COMPANY

Cadbury Nigeria Plc (Chocolate and cocoa products company)

II. SHORT HISTORICAL BACKGROUND

Cadbury Nigeria is the market leader in sugar confectionery, gum, and food beverages in Nigeria with

strong market shares across all three categories. The company operates through two segments,

Confectionery and Food Drinks, and Intermediate Cocoa Products. 

• Cadbury Nigeria was incorporated in 1965 as a 100% owned subsidiary of Cadbury Schweppes. 

•In 1976, 40% of the business was sold to private Nigerian investors through a listing on the Nigerian

Stock Market and the Group's holding was reduced to 40% in 1978.

• Following changes to foreign company ownership regulations in Nigeria in 1995, the Group has sought

to increase its holding in Cadbury Nigeria as part of a long-term strategic aim to grow its confectionery

business in Africa and use Nigeria as a base for further expansion in West Africa.

• In February 2006, the Group took majority control of Cadbury Nigeria through an increase in its stake

from 46.4% to 50.02%.

• June 30, 2021, The company in its unaudited result and accounts for nine months ended September 30,

2021, was unable to manage the rising cost of sales, which was the main challenge that caused a net

loss of N516 million in the half year ended

• Cost of sales in nine months ended September 30, 2021, grew by 19.04 percent to N24.4billion from

N20.52billion in nine months of 2020, to drive the proportion of the cost of sales/revenue to 81.28 percent

in nine months of 2021 from 79.53 percent in nine months of 2020 to drive the proportion of the cost of

sales/revenue to 81.28 percent in nine months of 2021 from 79.53 percent in nine months of 2020.

III. VIEWPOINT

Oyeyimika Adeboye - CEO/Managing Director, Cadbury Nigeria PLC

IV. TIME CONTENT

September 30, 2021

V. STATEMENT OF THE PROBLEM

How will the business handle rising costs associated with enduring less intense competition in the

consumer goods industry given the fact that it also threatened Cadbury Nigeria Plc's profit and dividend

payout to shareholders in the financial year results and accounts for 2021?

VI. SWOT AREAS OF CONSIDERATION

Strengths

1. Available in many countries across the world 

2. Strong brand

3. Aggressive Marketing

4. Positive perception of customer to the brand

5. Partnership
Weaknesses

1. Inefficient process of management

2. Cash flow problems

3. Contains high sugar level

4. Limited product range

5. Quality of product

Opportunities

1. Support of business partners

2. Global business expansion

3. Increase share through investment

4. Brand promotion

5. Innovation

Threats

1. Increasing Competition

2. Rising costs of Sale

3. Competition with other brands

4. Controversies and scandal

5. Purchase Power

VII. ALTERNATIVE COURSES OF ACTION (3)

ACA 1 - Cadbury Nigeria Plc must make price adjustments and expand its route to market capabilities.

Pros:
• Cadbury can get out of rising inflation and higher cost.

• Entered new segments in the candy category and deployed new technology to improve business

operations as part of the strategy.

Cons:

• There is a chance that customers will switch to other brands and causing a decrease in sales.

• It crates the largest potential markets which head to the lowest cost, which in turn results in a higher

margin.

ACA 2 - Cadbury Nigeria Plc may request the assistance of its business partners. They can help the

company financially and through business expertise.

Pros:

• Cadbury Nigeria Plc will handle rising costs that will attract more customers which will increase their

profit and can be a huge advantage to deal with increasing competition.

• Cadbury Nigeria Plc will address its cash flow problems, which may allow them to guarantee dividend

payments to shareholders.

Cons:

• Cadbury Nigeria Plc will be more at risk if ever the business partner helps them with an inefficient

strategy.

• Cadbury Nigeria Plc and business partners can have a disagreement on how business finance and

strategy should be operated.

ACA 3 - Cadbury Nigeria Plc must identify the material misstatement and maintain less error in Financial

Statement that cost high risk to the company

Pros:
• The company Financial Statement give a true fair view in accordance with International Financial

Reporting Standards and the request of the companies.

• Cadbury Nigeria Plc investors will look to the less error financial information and check the capability of

the company's financial management.

Cons:

• As the directors determine its necessary to enable the preparation of Financial Statement that are free

from material misstatement, whether due to fraud or error.

• There's a potential that financial management make an errors in the financial statements.

VIII. CONCLUSION

ACA 1

To sustain the current inflation and high cost of material. Price adjustment is the most ideal and quick

solution to cater the cost. And expanding its route to other market capabilities will increase its audience

and provide new opportunities and

ACA 3

To provide the long-term and consistent solution to handle the financial management and lessen the error

in Financial statement.

IX. RECOMMENDATION

For initial and quicker solution ACA 1 to sustain the cost for production and expanding its route to market

capabilities. And then for the long and consistent solution ACA 3 to handle the material misstatements.