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Cadbury Schweppes: Capturing Confectionary

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Brandi McDonald

on 13 October 2015

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Transcript of Cadbury Schweppes: Capturing Confectionary

Cadbury Schweppes: Capturing Confectionary
Toya White- Intern #1
Niasha Lowe- Intern #2
Dimitric Brown- Intern #3
Brandi McDonald- Intern #4

Table of Contents
Introduction
Synopsis
History of Cadbury
History of Adams
To bid or Not to bid?
The Bid Process
Is this a plausible idea?
After Purchase Positives
After Purchase Negatives
Financial Information
Research and Development
The Importance Behind This Bid


Synopsis
In October 2002, Sir John Sunderland, chairman and CEO of Cadbury Schweppes, contemplated the future of his global confectionery and beverage company. Over the previous decade, the company had made several acquisitions to complement its portfolio of chocolate, soft drinks, sugar confectionery (candy), and gum. Now it was considering a bid for Adams, the number two player in the worldwide gum business and, with its Halls brand, a leader in sugar confectionery. After researching the acquisition for many months, his Chief Strategy Officer Todd Stitzer and the Adams deal team were approaching the point of no return. Sunderland knew that they would have to bid more than $4 million to have any chance of winning Adams.
History of Cadbury
Founded in 1783 as a beverage company
-Mixers and Tonic Water
Started a chocolate business in 1824
-Biscuit cookies and Creme filled eggs
Introduced the gum business in 2002
-Pellet filled gum product
To bid or Not to bid?
Potential to be the main player in confectionery business
Long-term success
Confectionery is greater than just chocolate
Total funds needed to bid
What happens after the bid?

The Bid Process
Who is Cadbury’s competition?
Between $4.1 and 4.3 billion
Options
Preemptive bid

Is this a plausible Idea?
No. 1 leader in Confectionery
Financial loss is less for Adam's bid than for projected annual loss
Provides lucrative benefits long term
After Purchase Positives
Profit
Potential to be #1 in confectionery business
Wider consumer base
Opportunities to grow
After Purchase Negatives
New employees
Risk of market decline
Consumers not adapting to the name change
Breakeven then profit
Financial Information
Research and Development
Conducting Unbiased Surveys
Product Trials
New products
The importance behind this bid brings new opportunities to Cadbury.
What this basically means?
Number three competitor in the beverage business after Coca-Cola and PepsiCo.
Fourth player is the global chocolate business
Adams second leader in confectionery; gum is next best product with R&D efforts
Cadbury is weak in geographics where Adams is strong
Steady decline in revenue no innovation
Adams can increase revenue over the years
History of Adams
Founded in 1962 by Thomas Adams of Warner-Lambert
Developed Trident White and Recaldent
Launched Body Smarts in 2001
By 2002 there were 3 main gum brands by Adams
22 production facilities, 12.9K employees
Introduction
Industry Analysis
"The U.S. Department of Agriculture predicts the overall price of food and beverages will increase 3% to 4% in 2013, which is higher than the 2.5% increase in 2012."
Full transcript