Cadbury Schweppes: Capturing

Confectionery (A)

Presented by Group no. 7 : Jappreet singh bhatia

Dheeraj rajawat
Gaurav arora
Ritu chaudary
Inamul ahzaan
Chavinder singh
Sumit khatri

History of Cadbury
Cadbury's as we know it today started from
humble beginnings in Bull Street, Birmingham. A
shop was opened by John Cadbury in 1824. It
did not start as a confectionery shop but sold
tea and coffee and home made drinking
chocolate or cocoa which he made himself for
his customers.
John Cadbury moved into the manufacturing of
drinking chocolate and cocoa.
By the early 1840's Cadbury operated from a
factory in Bridge Street and went into
partnership with his brother Benjamin. 'Cadbury
Brothers of Birmingham'

History contd..
Cadbury's moved on to become a limited
company and after the death of Richard
Cadbury the sons of the two brothers joined
the firm headed by George Cadbury. This was
very much a family business in every sense
of the word.
In 1969 the Cadbury Group merged with
Schweppes. Cadbury Schweppes Plc is a
leader in confectionery and soft drinks both in
the UK and abroad. With factories all over the
world and a host of well known brand names
it has become a household name in many
countries.

History of Adams
Adams was started in 1876 by Thomas
Adams , the father of Chewing gum.
In 1962, warner lambert, a pharmaceutical
company , acquired Adams and encouraged it
to develop R & D capabilities for innovative
products with functional benefits.
In 2000, Pfizer acquired Warner- lambert ,
further reduced investment in its core
business and diversified in new product
segments.
It had 40 R & D labs across the world.

Competition
Cadbury was the number three
competitor in the beverage business
after Coca Cola and Pepsi .
Cadbury comes on fourth position in
the competition in the confectionery
business.
Presently it is the second largest
confectionery brand in the world
after Wrigleys.

KEY DECISION MAKERS

The key protagonist of the case is Sir John
Sunderland, Chairman and CEO of
Cadbury Schweppes .
He was encountered with the delimma of
the future of his global confectionery and
beverage company.
The chief strategy officer Mr. Todd Stitzer
proposed the Acquisition of Adams , which
was number Two player in the worldwide
gum business

QUESTION TO BE ANSWERED

As a member of the
Board of Cadbury
Schweppes would you
approve a bid of more
than $4 billion for Adams?
Why? Why not?

ANSWER
As a member of the Board of Cadbury
Scheweppes We would approve a bid of more
than $4 billion due to the following reasons:
1.This deal was an important strategic move for
them to sustain & grow their market share.
2.Many close competitors (Nestle, Mars, Kraft,
PepsiCo, Hershey, etc.) were potential bidders
and it was concluded that if Cadbury fails to get
the bid, Whoever wins will trash our business.

4. Adams was strong in the US and the

developing world where Cadbury
was weak. Also Adams had little or no
presence in the rest of the world
where Cadbury was strong. So, it was
a win-win situation.
5. According to their internal
researchers and planners Adams
was the capstone to reach its aim of
reaching the number one position in
the confectionary Industry.

6. Adams had several material based patents

and trade secrets for potentially
breakthrough innovations, like an improved
gum base & flavour encapsulation that
even wrigley would be pressed to replicate.
7. Adams centre-filled pellet gum lacked
necessary capital investment to bring it to
the market. This acquisition can do that
right!
8. Lastly , geographic and product range
complementarity of the two rganisations
and post merger the organisations will be
culturally fit for operations.
Hence, it is right to go for the BID.