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BUSS4: Google & Cadbury's

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by

sarah butler

on 22 November 2011

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Transcript of BUSS4: Google & Cadbury's

Cadbury's Clip: Google's PR Strategy - how does this link to their corporate strategy? Clip: Eric Schmidt talks about technology leadership. Google suffered in recession but used cost-cutting strategy (closed down engineering offices, cutting back on staff cafeterias & staff rewards, cutting jobs). This has helped them recover and they enjoyed total net income of $1.97billion in the 4th qtr of 2009, compared with $382million a year earlier. Google get most of their income from advertising next to related search results. During recession a lot of companies cut back on their advertising expenditure and this directly affected Google. Culture: Google's culture has a feeling of employee ownership - employees get to take ownership of their own projects. There is a culture of innovation and an open source mentality (meaning they have freedom to put their ideas forward) Key Strategy! Google BOUGHT You Tube in 2006 for $1.6billion and this was their first main investment. They have also signed distribution deals with Sony, Warner & CBS. Google have been praised for making an ethical decision to stand up to China about their search restrictions. Since the end of the recession Google have taken on 500 new sales staff and 100 new jobs in London - so they are clearly recovering and starting to expand again... Cadbury's was sold to Kraft for £11.5billion in Feb 2010; valuing each share at £8.40. Because of the merger 4,500 jobs were lost in the UK. Kraft had a record of cutting production and moving it abroad, so there was no guarantee that Cadbury's would not be forced to adopt this strategy. Leadership: the former Cadbury's CEO was Todd Stitzer and he was a man of few words. He is very work focused and serious. He is said to be very greedy as he bagged £40million from the takeover bid, but undervalued the Cadbury brand by selling for less than they were worth. Mid recession (Feb 2009) Cadbury's biggest brands (Dairy Milk & Trident Gum) grew by 11% in sales volume. Cadbury's profits increased by 30% during recession, perhaps because consumers were staying at home more, and because Cadbury's is a trusted British brand. Since Kraft took control 120 of 170 managers and executives have left. This is because Kraft want to change tradition by making Dairy Milk bars smaller and by changing ingredients to lower quality. This could be seen by Kraft as those people resisting change... Cadbury's buy Fair Trade cocoa beans for Dairy Milk and have promoted this by using an advert set in Ghana. Google: ethical that they show their 'sponsored links' very clearly so consumers have have symmetry of information. Google offer grants via their Google Foundation, including work with schools in China which have been affected by earthquakes. Google committed itself to becoming carbon neutral, and they invested $100million in renewable energy. Google developed a search 'platform' for people in China searching for loved ones after earthquakes.
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