A PROJECT REPORT ON “CADBURY” Submitted in the partial fulfillment of the requirement for the award of the Degree of Bachelors of Business Administration SUBMITTED BY: UNDER GUIDANCE OF: RITIKA GULATI BBA (4 TH SEMESTER) BHARATI VIDYAPEETH’s INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI
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A
PROJECT REPORT
ON
“CADBURY”
Submitted in the partial fulfillment of the requirement for the award of the Degree of Bachelors of Business Administration
SUBMITTED BY: UNDER GUIDANCE OF:
RITIKA GULATI
BBA (4TH SEMESTER)
BHARATI VIDYAPEETH’s
INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI
ACKNOWLEDGEMENT
Success is an amalgam of dedication.
Hard work and able guidance of people around us”
I am indebted to my teachers and gurus who molded at this junction of my career
from where I can take off better in the competitive scenario of today’s world .
Working on this project has been a great pleasure & a stimulating experience.
Firstly I would like to express our deep gratitude to God all mighty for his blessings,
which provided me strength & patience to complete my term paper. I would also like
to convey my thanks to Mr. Bill Gates who have developed the Ms Office without his
contribution we would not able to make this type of attractive & in a printed way. I
would also like to thanks my friends who helped me in all possible ways.
I am also thankful to ___________ Who provided me needed information about their
department and guided my term in the right direction.
(SIGNATURE)
PREFACE
The success of any business entity solely depends on how effectively does it utilizes
its optimum resources and how soon does it make arrangements for the removal of the
customer’s grievances. Moreover, the company should always be ready to make
necessary changes according to the requirements in order to attract more customers so
as to maintain a substantial growth in the market. The topic given to me was:
“JOURNEY TO ZENITH OF CADBURY”
I have tried to put my best efforts to complete this task on the basis of skill that I have
achieved during my studies in the institute.
I have tried to put my maximum effort to get the accurate statistical data. If there is
any error or any mistake in collecting the data, please correct it in the best way as I
am still learning.
CONTENTS
CHAPTER 1: INTRODUCTION
• OVERVIEW OF INDIAN ECONOMY AND ITS GROWTH
• OVERVIEW OF INDUSTRY
INDUSTRY INTRODUCTION
COMPANIES CONTRIBUTION WITH IN THE INDUSTRY
• PROFILE OF THE ORGANISATION
HISTORY OF THE COMPANY
VISION AND MISSION STATEMENT OF COMPANY
ORGANISATION STRUCTURE
CHAPTER 2: COMPANY ANALYSIS
• PEST ANALYSIS
• PORTERS 5 FORCES MODEL
• SWOT ANALYSIS
• USP OF ANY DEPARTMENT
CHAPTER3: MARKETING STRATEGIES
• INTRODUCTION AND IMPORTANCE OF MARKETING STRATEGIES
• MARKETING MIX OF THE COMPANY
• STP ANALYSIS OF THE COMPANY
• BCG MATRIX OF THE COMPANY
CHAPTER4: FINANCIAL ANALYSIS
• SOURCES OF FINANCE
• KEY INVESTMENTS
• RATIO
CHAPTER5: HR-POLICIES AND STRATEGIES
• SOURCES OF RECRUITMENT
• PROCESS OF RECRUITMENT
• TRANING AND DEVLOPEMENT
• BENEFITS OF COMPANSATION SYSTEM
CHAPTER6: PRODUCTION POLICIES
CHAPTER 7: FINDINGS AND CONCLUSIONS
BIBLIOGRAPHY
INTRODUCTION TO CADBURY
GEORGE CADBURY FOUNDER OF THE TRUST 1839 –
1922
Cadbury is a leading global confectionery company with an outstanding
portfolio of chocolate, gum and candy brands. We create brands people
love - brands like Cadbury, Trident and Halls.
Our heritage starts back in 1824 when John Cadbury opened a shop in
Birmingham selling cocoa and chocolate. Since then we have expanded
our business throughout the world by a programme of organic and
acquisition led growth. On 7 May 2008, the separation of our
confectionery and Americas Beverages businesses was completed
A pretty teenager; a long line, and hunger! Rings a bell? That was how Cadbury
launched its new offering; Cadbury Perk in 1996. With its light chocolate and wafer
construct, Cadbury Perk targeted the casual snacking space that was dominated
primarily by chips & wafers. With a catchy jingle and tongue in cheek advertising,
this 'anytime, anywhere' snack zoomed right into the hearts of teenagers.
Raageshwari started the trend of advertising that featured mischievous, bubbly
teenagers getting out of their 'stuck and hungry' situations by having a
Cadbury Perk. Cadbury Perk became the new mini snack in town and its
proposition "Thodi si pet pooja" went on to define its role in the category.
CELEBRATIONS
Chocolate lovers for a quarter of a century have indulged their taste buds with a Cadbury 5 Star. A leading knight in the Cadbury portfolio and the second largest after Cadbury Dairy Milk with a market share of 14%, Cadbury 5 Star moves from strength to strength every year by increasing its user base. Launched in 1969 as a bar of chocolate that was hard outside with soft caramel nougat inside, Cadbury 5 Star has re-invented itself over the years to keep satisfying the consumers taste for a high quality & different chocolate eating experience
Cadbury Celebrations was aimed at replacing traditional gifting options like Mithai
and dry- fruits during festive seasons.
Cadbury Celebrations is available in several assortments: An assortment of chocolates
like 5 Star, Perk, Gems, Dairy Milk and Nutties and rich dry fruits enrobed in
Satisfaction suffices. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. But the winner will surpass them by constantly exceeding her expectation, delivering to her door step additional benefits which she would never have imagined possible. Cadbury’s offer such product. The wide variety products offered by the company include:
I. Chocolate & Confectionary
II. Beverages
III. Food Drinks
Pricing
Make no mistake. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Cadbury’s is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them.
Cadbury’s has launched various products which cater to all customer segments. So every customer segment has different price expectation from the product. Therefore maximizing the returns involves identifying right price level for each segment, and then progressively moving through them.
“Place”
BRAND ISN’T THE ONLY ANY MORE. Marketers and finance manager need a new term to evaluate their business:
Distribution Equity. It takes much more time and effort to build, but once built, distribution equity is much together to erode.
The fundamental axiom of Indian consumer market is this:
You can set up a state-of –the-art manufacturing facility, hire the hottest strategies on the block, swamp prime television with best Ads, but the end of it all, you would be know of selling your products. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. Buyers are paying for distribution equity not brand equity and market shares.
Why does the company need distribution equity more anything in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique product differentiation for ling period. In a product and price parity situation, the brand that sells more is the one that reaches the highest number of customers.
India – 1 billion people, 155 million household has over 4 million retail outlets in 5351 urban markets and 552725 villages, spread cross 3.28 million sq. km. television has already primed and population for consumption, and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. But getting their means managing wildly different terrains-climate, language, value system, life style, transport and communication network. And your brand equity isn’t going to help when it comes to tackling these issues.
Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly.
Once the stock product reaches retailers, the prospective customers can have access to the product.
Cadbury’s distributes the product in the manner stated above.
Cadbury’s distribution network has expanded from 1990 distributors last year to 2100 distributors and 4,50,000 retailers. Beside use of TI tom improves logistics, Cadbury is also attempting to improve the distribution quality. To address the issue of product stability, it has installed visi colors at several outlets. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes.
Looking at the low penetration of the chocolate, a distribution expansion would itself being incremental volume. The other reason is arch rival Nestle reaches more than a million retailers.
This increase in distribution is going to be accompanied by reduction in channel costs. Cadbury’s marketing costs, at 18% of total costs, is much higher than Nestlé’s 12% or even pure sugar confectionery major Parry’s 11%. The company is looking to reduce this parity level. At Cadbury, they believe that selling confectionery is it like selling soft drinks.
Promotion
If an advertisement is to communicate effectively, the receiver must at least half want it to, and be prepared too take step toward the sender. Effective advertising is rarely hectoring or loudly explicit…. It often both attracts and generates arm feelings. More often than not, a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature.
To penetrate into the inner recesses of her memory, communication must first ensure exposure, grab her attention evoke her comprehension, grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same.
Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. The strategic response address the emotional appeal of the band to the child within the adult. Naturally, that produced just the value vacuum that Cadbury was looking to fill. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful, unself conscious, pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “Khane Walon Ko Khane Ka Bahana Chahiye” for CMD and “Thodi Si Pet Pooja – Kabhi Bhi Kahin Bhi” for Perk have been sure shot winner with the audience.
Whirl with the new launched temptations with the slogan “Too To Share” the communication resolves around the reluctance of a person who’s got their hand on a bar of temptation to let anyone else to have a bite. As well as outdoor and radio ads, ad agency contract has created communication for cinemas and even ATM machines for the brand.
All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. It tells the customer that this would be good time to get out of her temptation since he/she is bound to be alone. Something familiar is planned for phone-book as well. In cinemas, Cadbury has a message on-screen just before the lights are dimmed to give them a chance to get their temptations. There will also be after dinner sampling in restaurants – to begin with, 30 catteries in Mumbai have been selected.
The next round of activity will include the wafer-chocolate Perk and the Picnic bar, which has faced problems with its taste, because of the peanut it contains. Milk treat has also been launched in a module bar form, just in time of Diwali gifting market. Éclairs has got potential for much wide distribution, in a small sweets that airlines, hostels, and up market retail outlet offer to guest and customers.
Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend at this level in the current year also.
Ad since any discussion today would be incomplete without mention ‘e’ word, the management plans to tap this new channel of marketing. Beside three company website (i.e. www.cadburyindia .com, wwww.bourvita.com, www.cadburygift.com that the company has launched, it had also entered into various marketing relationship with other portals, specially targeted during festivals and events such as Valentines day , etc….
It’s a combination of spiffing up its key brand, researching and improving the newer products that haven’t taken off, supported with high ad – spends that Cadbury hopes will see it emerges stronger after the current slowdown, as well as expand the market.
Positioning
In the 1970s consumers were ready to pay “more for more”, and luxury goods flourished. In the 1980s, consumers began to demand “more for same”, and the discounting era grew strong. Today’s consumer demanding “more for less”, and the winner will be that super value marketers…. Some of today’s most successful companies recognize those customers are more educated and able to recognize true customer value…
Positioning is simply concentrating on an idea – or – even a word defines that company in the mind of the consumer. It is more efficient to market one successful concept to one large group of people than 50 product or service ideas to 50 separate group… repositioning is a must when customer attitude have changed and product have strayed away from the consumer’s long standing perception of them…
STP ANALYSIS OF THE COMPANY
Segmentation
CADBURY has segmented its customer in the following ways:-
Understanding needs and preferences of consumers -- Having housing,
infrastructure, and commercial construction, as demand drivers, the company analyze
the needs and preferences of consumers in these sectors.
Grouping customers based on their needs and preferences -- Customers with
similar needs and preferences are included in this segment.
Targeting the segment that the company can best meet the needs and
preferences of - The Company targets the customers, of which it can meet the needs
and preferences. I.e. customer needs higher- strength or low price.
Branding the commodity -- Though being a commodity product, branding is
important for a company. The company positions its brand among Architects and
Builders rather than household individuals.
Provide required product to meet targeted customers' needs and preferences --
Delivering up to the expectations of the targeted segment.
Targeting
Its customer base represents the masses of India - individual homebuilders in small
towns, rural and semi-urban India.
The company targets on the important projects like dams, roads in the country
It targets the Manufacturing companies like L&T etc
It Targets Indian Railways.
It targets an individual building his home(Retail Marketing)
Positioning
A good brand positioning help guide marketing strategy by clarifying the brands essence but
goals it help the consumer achieve and how it does so in a unique way. The result of the
positioning is the successful creation of a customer focused value proposition, a cogent reason
why the target market should buy the product.
Swot analysis
Cadbury Plc
Strengths
• Cadbury is the largest global confectionery supplier, with 9.9% of global market share.
• High financial strength (Sales turnover 1997, £7971.4 million and 9.4%)[1]• Strong manufacturing competence, established brand name and leader in innovation.
• Advantage that it is totally focused on chocolate, candy, chewing gum, unique understanding of consumer in these segments.
• Successfully grown through its acquisition strategy. Recent acquisitions, including Adams, 2003, enabled it to expand into important markets like the US market.
• The company is dependent on the confectionery and beverage market, whereas other competitors e.g. Nestle[2] have a more diverse product portfolio, where profits can be used to invest in other areas of the business and R&D.• Other competitors have greater international experience - Cadbury has traditionally been strong in Europe. New to the US, possible lack of understanding of the new emerging markets compared to competitors[3].
Threats
• Worldwide - there is an increasingly demanding cost environment, particularly for energy, transport, packaging and sugar. Global supply chain in low cost locations[4].• Competitive pressures from other branded suppliers (national and global). Aggressive price and promotion activity by competitors - possible price wars in developed markets.
• Social changes - Rising obesity and consumers obsession with calories counting. Nutrition and healthier lifestyles affecting demand for core Cadbury products.[5]
Opportunities
• New markets. Significant opportunities exist to expand into the emerging markets of China, Russia, India, where populations are growing, consumer wealth is increasing and demand for confectionery products is increasing.
• The confectionery market is characterized by a high degree of merger and acquisition activity in recent years. Opportunities exist to increase share through targeted acquisitions[6].• Key to survival within the FMCG market is increasing efficiency and reducing costs. Cadbury Fuel for Growth[7] and cost efficiency programmes seek to bring cost savings by: 1) Moving production to low cost countries, where raw materials and labour is cheaper ii) reduce internal costs - supply chain efficiency, global sourcing and procurement, and wise investment in R&D.• Innovation is key driver. To respond to changes in consumer tastes and preferences - healthier snacks with lower calories need to be developed. R&D and product launches have led to sugar-free & center filled chewing gum varieties and Cadbury premium indulgence treat. Low-fat, organic and natural confectionery demand appears strong.
But the question is, how do we exactly find out what phase our product is in,and how
do we classify what we sell? Furthermore, we also ask, where doeseach of our
products fit into our product mix? Should we promote oneproduct more than the other
one? The BCG matrix can help with this.
The BCG matrix reaches further behind product mix. Knowing what we areselling
helps managers to make decisions about what priorities to assign tonot only products
but also company departments and business units.These groups are explained below:
BCG STARS (high growth, high market share)Here you're well-established, and growth is exciting! These are fantasticopportunities, and you should work hard to realize them.Stars are defined by having high market share in a growing market.
•Stars are the leaders in the business but still need a lot of support forpromotion a placement.•If market share is kept, Stars are likely to grow into cash cows.
BCG QUESTION MARKS (high growth, low market share)
These are the opportunities no one knows what to do with. They aren'tgenerating
much revenue right now because you don't have a large marketshare. But, they are in
high growth markets so the potential to make money is there.
Question Marks might become Stars and eventual Cash Cows, but theycould just as
easily absorb effort with little return. These opportunities needserious thought as to
whether increased investment is warranted.•These products are in growing markets but have low market share.•Question marks are essentially new products where buyers have yet todiscover them.•The marketing strategy is to get markets to adopt these products.•Question marks have high demands and low returns due to low market share.•These products need to increase their market share quickly or they becomedogs.•The best way to handle Question marks is to either invest heavily in them togain market share or to sell them.
BCG CASH COWS (low growth, high market share)
Here, you're well-established, so it's easy to get attention and exploit new
opportunities. However it's only worth expending a certain amount of effort,because
the market isn't growing and your opportunities are limited.•Cash cows are in a position of high market share in a mature market.•If competitive advantage has been achieved, cash cows have high profitmargins and generate a lot of cash flow.•Because of the low growth, promotion and placement investments are low.•Investments into supporting infrastructure can improve efficiency andincrease cash flow more.•Cash cows are the products that businesses strive for.
BCG DOGS (low growth, low market share)
In these areas, your market presence is weak, so it's going to take a lot ofhard work to
get noticed. Also, you won't enjoy the scale economies of thelarger players, so it's
going to be difficult to make a profit.•Dogs are in low growth markets and have low market share.•Dogs should be avoided and minimized.• Expensive turn-around plans usually do not help
Extra
RESEARCH METHODOLOGYAchieving accuracy in any research requires in depth study regarding the subject. As the prime objective of the project is to compare Cadbury with the existing competitors in the market and the impact of Nestle on Cadbury, the research methodology adopted is basically based on primary data via which the most recent and accurate piece of first hand information could be collected. Secondary data has been used to support primary data wherever needed.Primary data was collected using the following techniques Questionnaire MethodObservation MethodThe main tool used was, the questionnaire method, observation method has been continuous with the questionnaire method, as one continuously observes the surrounding environment he works in.Procedure of research methodology# Target geographic area was Delhi. NCR and Aligarh. # To these geographical area questionnaire was given.# Finally the collected data and information was analyzed and compiled to arrive at data the conclusion and recommendations given.Sources of secondary Used to obtain information on , Cadbury and its competitor history, current issues, policies, procedures etc, wherever required.# Internet# Magazines# Newspapers
PEST ANALYSIS
Political factor:-
• If government increases the tax rate on chocolates than customer have to pay
more for it
If tax increase by10% than normal dairy milk of 5 Rs will be of 5.50.
• If some party such as congress comes into power than it will affect positively or
Negatively depending on tax and norms.
• If inflation rate increases than it will affect fmcg sector so dairy milk also will be
affected.
Economic:-
• In festival seasons the demand of chocolates increases.
• More demand will depend upon the buying power of consumers.
• Willingness to buy:-demand of chocolates will depend on the persons
willingness to buy, this will depend on the quality of the dairy milk and need.
• Taste and preference:- Cadbury has wide variety of products and 1 of them is
dairy milk. Its different varieties are fruit and nut, raisins, almond. So the
demand will be according to the taste and preferences of the variety.
• Income:-variation in income will affect positively or negatively on dairy milk.
More the income than more will people buy.
Social:-
Cadbury India has a tradition of caring for the environment and enriching the quality
of lives of the communities we live and work in, through a variety of result-oriented
programs.
Various steps taken by Cadbury India are:
MIGRATORY BIRDS STOP OVER AT OUR BANGALORE FACTORY! Water is
a precious resource. As part of Cadbury India's efforts to continuously increase water
conservation its Bangalore factory has constructed a check dam to store the rainwater.
This dam not only acts as a major ground water replenishing source for the bore wells
in the factories and surrounding community, but is also a stopover location for some
of the migratory birds!
PIONEERING COCOA CULTIVATION IN INDIA :-Since 1974 Cadbury has
pioneered the development of cocoa cultivation in India. For over two decades, it has
worked with the Kerala Agriculture University to undertake cocoa research and
released hybrids that improve the cocoa yield. its efforts have increased cocoa
productivity and touched the lives of thousands of farmers. Hardly surprising then that
the Cocoa tree is called the Cadbury tree!
Technological: -
• Milk quality can be improved much by technology.
• Refrigeration power can be improved by new technology so that cold storage
product such as dairy milk and other milk products can be stored well and long
for much more time
PORTERS 5 FORCES MODEL
Cadbury’s Market Segment
Market place for any product is comprised of many different segments of consumers,
each with different needs and wants. Markets segmentation can be defined in a
number of ways such as:
Demographic variables (e.g. Consumers are groups, gender, material states
income etc…)
The lifestyle of consumers (i.e. their interests and activities) the benefits which
consumers look for in a product or on the occasions when the product might
be consumed.
Cadbury takes into account all these factors when producing a range of
products. It targets different segments within the market, such as the.
Break segment – products which are normally consume as a snatched break
and often with tea and coffee, for example Cadbury’s Perk and snack range.
Impulse segment – these products are often purchase on impulse, eating these
and then. They include product such as Cadbury’s Dairy Milk.
Take home segment – this describes product that are normally purchased in
supermarkets, taken home consumed at a later stage.
Chocolate Market Share
The Indian chocolate market is getting bigger and better. While on one hand, the premium
segment (composing imported varieties) is opening up on the other, companies like Cadbury
India are launching indigenous product made to international standards. Of the 20,000 tonne
chocolate market worth about
Rs. 400 crore, Cadbury account for about 70% followed by Nestle, with a share of around
20%. Amul has about 5% of the market, with minor player taking the rest. The battle, though,
is between Cadbury and Nestle. Though with a much smaller portfolio, Nestle is putting up a
tough fight.
From a treat for kids, chocolate are now being positioned near meal substitutes, thanks to the
initiative taken by the Cadbury India during early nineties. The market itself has become more
broad based, in the sense adults are an important target segment now. The reposting of
Cadbury’s Dairy Milk in 1994 as the ‘real taste of life (through the Slice of Life and Cricket
commercial by Ogilvy and Mather) grew the entire milk chocolate by 20%, and gave the
Cadbury’s range – 5 Star, Gems, Éclairs, Fruit & Nut, Crackle, Nutties, Butterscotch & Tiffns
– a new lease of life. In other words, it facilitated the repositioning of Cadbury’s sub brands in
the basket. Some o the strategic clicked, while other did not quite take off.
The company is pushing the gifting segment, through occasion linked gifts. Chocolates
contribute to 64% of Cadbury’s turnover. Confectionary sales accounting for 12% of turnover
is contributed largely by Éclairs. The company attempted expanding its confectionary product
portfolio, with launch of sugar based confectionary goodly and fruits, without much success.
Cadbury also has a strong brand vita in the malted health drink category which account for
24% of turnover.
There exists an even larger unorganized market in the confectionary segment. Cadbury has
4% of the market share in this segment. Leading national players are nutrine, Pary’s
Ravalgoan, Candico, Parle, Joyoco India and Perfetti, the MNCs such as Joyco and Perfetti
have aggressively expanded their presence in the country in the last few years.
Malted food drinks category consists of white drink and down drink. White drinks accounts
for almost two third market of the 82,000 for market south and east are large market for
drinks, accounting for largest proportion of all India’s sale. Cadbury’s Bourn Vita is leader in
the down drink coca based segment in the white drink segment Smith Kline’s Horlicks in the
Nestle Milo , GCMMF nitramul and other Smith Kline brand Boost, Maltova and Viva
Cadbury bold 14% market share in food drinks segment.
Despite tough market condition and increased competition Cadbury managed to record a
double digit (11%) top line growth in 2000. The company achieved a volume growth of 5.2%.
This was achieved through innovative marketing strategies and focused advertising campaign
foe flagship brand Dairy Milk. Net profit rose sharply by 41.8% to Rs. 520 million. Reduced
material and energy cost and tioter control over working capital over working capital and
capital expenditure enabled the company to improve the profitability. Company added 8
million new consumers and saw its outlets grow to 4.5 lakhs and consumer to 60 million.In
the food segment, Britannia is the leader brand with 21% among those who expressed an
opinion saying that they like advertising for the brand Cadbury was clearly No.2 with 18% to
which CDM throw in its weight with 13% and pork with 4%. For the Chowlate company,
Khane Walo Lo, Khane Ka Bhanna and the Karwa Cauth, Sports are clear winners.
Tied for the brand place are Amul, Parle and south based Arun Le Gram with 5% each.
Disappointment among bid brands Kissan and Maggi and Kwality Walls (1%) each.
Future Strategy
In the branded impulse market, the share of chocolate in 6.6% and Cadbury’s share in the
impulse segment is 4.8% factor like changing attitude, higher disposable income, a large
youth population, and low penetration of chocolate (22% of urban population) point towards a
big opportunity of increasing the share of chocolate in the branded impulse among the costly
alternative in the branded impulse market.
It appears that company is likely to play the value game to expand the market encouraged by
the recent success of its low priced ‘value for many packs’.
Various measures are undertaken in all areas of operation to create value for the future.
New channel of marketing such as gifting and child connectivity and low end value for
money product for expanding the consumer base have been identified.
In terms of manufacturing management focus is on optimizing manufacturing efficiencies and
creating a world class manufacturing location for CDM and Éclairs. The company is today the
second best manufacturing location of Cadbury’s Schweppes in the world.
Efficient sourcing of key raw material i.e. coca through forward purchase of imports, higher
local consumption by entering long term contract with farmer and undertaking efforts in
expanding local coca area developing. The initiatives in the terms of development a long term
domestic coca a sourcing base would field maximum gains when commodity prices start
moving up.
• Use of it to improve logistic and distribution competitiveness
• Utilizing mass media to create and maintain brands.
• Expand the consumer base. The company has added 8 million new consumer in
the current year and how has consumer base of 60 million although the growth
in absolute numbers is lower than targeted, the company has been able to
increase the width of its consumer base through launch of low priced products.
• Improving distribution quality by addressing issues of product stability by
installation of visi coolers at several outlets. This would be really effective in
maintaining consumption in summer, when sales usually dip due to the fact that
the heat effects product quality and thereby consumption.
• The above are some steps being taken internally to improve future operation
and profitability. At the same time the management is also aware of external
changes taking place in the competitive environment and is taking steps to
remain competitive in the future environment of free imports, lower barrier to
trade and the advent of all global players in to the country. The management is
not unduly concerned about the huge deluge of imported chocolate brands in the
market place.
It is of the view that size of this imported premium market is look small to threaten its own
volumes or sales in fact, the company looks at the tree important as an opportunity, where it
could optimally use the global Cadbury Schweppes portfolio. The company would be able to
not only provide greater variety, but it would also be more cost effective to test market new
product as well as improve speed of response to change in consumer preference through
imports. The only concerns that the company has in this regard is the current high level of
duties, which limit the opportunity to launch value for money products.
Changing Product Mix
Contributing to turnover
1995
Contributing to turnover
2010
Chocolate 59% 64%
Sugar Confecting 9% 12%
Food Drink 32% 24%
Current Market Share
Chocolate 69.2%
Sugar Confectionary 4.0%
Food Drink 14.2%
Expanding Distribution Reach
2001 + Distribution
450000 Retail Outlet
60 Million Consumers
FINANCIAL ANALYSIS
SOURCES OF FINANCE
Share holders Fund
Shareholder funds is all the money belonging to common stock shareholders which includes
the balance of share capital, all profits retained and money classified as reserves.
Loan Funds
A Loan Fund is a source of money from which loans are made for small business
development projects. A loan is made to one person or business at a time and, as repayments
are made, funds become available for new loans to other businesses. Hence, the money
revolves from one person or business to another.
Deferred Tax Liabilities
An CADBURYount on a company's balance sheet that is a result of temporary differences
between the company's CADBURYounting and tax carrying values, the anticipated and
enacted income tax rate, and estimated taxes payable for the current year. This liability may
or may not be realized during any given year, which makes the deferred status appropriate.
RATIO ANALYSIS
Current Ratio shows an average ratio of 1.21which is less than the ideal ratio is 2:1.
Cash Ratio shows as average greater than its ideal ratio that is 0.5.
Debtors Turnover Ratio shows the amount of credit sales has been increased,
collection period is derived as 18 days
In the calculation of Working capital Turnover Ratio there is an adequacy of fund
except the year 2009-2010.
Gross profit ratio is fluctuating during the period of study.
Inventory Turnover ratio implies that the Inventory has been utilized efficiently.
RATIO FY’09 FY’10
CURRENT RATIO 1.31 1.07
QUICK RATIO 0.91 0.72
CASH RATIO 0.95 0.76
DEBTORS TURNOVER RATIO 27.12 24.22
NETASSETS TURNOVER RATIO 1.33 1.41
CURRENT ASSETS TURNOVER RATIO 2.89 3.18
INVENTORY TURNOVER RATIO 7.49 6.79
DEBT EQUITY RATIO 0.49 0.50
EQUITY RATIO 0.72 0.84
NET PROFIT RATIO 20.92 20.53
1.
Methods or Devices of Financial Analysis:
A Number of methods or devices are used to study the relationship between
different statements. The following methods of analysis are generally used:
i. Comparative statements
ii. Trend analysis
iii. Common –size statements
iv. Funds flow analysis
v. Cash flow analysis
vi. Ratio analysis
vii. Cost-volume-profit analysis
In this project the Comparative Statement and Ratio Analysis is used to study the
financial statement of Orissa State Co-operative Bank Ltd.
Comparative statements:
The comparative financial statements are statements of the financial position at different
periods of time. The elements of financial position are shown in a comparative form so as to
give an idea of financial position at two or more periods. Any statement prepared in a
comparative form will be covered in comparative statements. From practical point of view
generally, two financial statements
1. Balance Sheet
2. Income Statement
Comparative balance sheet
The comparative balance sheet analysis is the study of the trend of the same items,
group of items and computed items, group of items and computed items in two or more
balance sheets of the same business enterprise on different dates. The changes in periodic
balance sheet items reflect the conduct of a business. The changes can be observed by
comparison of the balance sheet at the beginning and at the end of a period and these changes
can help in forming an opinion about the progress of an enterprise. The comparative balance
sheet has two columns for the data of original balance sheets. A third column is used to show
this increase in figures. The fourth column may be added for giving percentage of increases
and decreases.
Guidelines for Interpretation of Comparative Balance Sheet:
While interpreting comparative balance sheet the interpreter is expected to study the
following aspects:
1. Current Financial Position and Liquidity Position
2. Long term Financial Position
3. Profitability of the Concern
1. For studying the Financial Position and short term Financial Position of a concern,
one sees the working capital in both the years. The excess of current assets over
current liabilities will give the figure of working capital. The increase in working
capital means improvement in the current financial position of the business. An
increase in current assets CADBURYompanied by the increase in current liabilities of
the same amount will not show any improvement in short term financial position.
One should study the increase or decrease in current assets and current liabilities and
this will enable him to analyse the current financial position.
The second aspect which should be studied in current financial position is the
liquidity position of the concern. If liquid assets like cash in hand, cash at bank, bills
receivable, debtors, etc. show an increase in the second year over the first year, this
will improve the liquidity position of the concern. The increase in inventory can be on
CADBURYount of CADBURYumulation of stocks for want of customers, decrease
in demand or inadequate sales promotion efforts. An increase in inventory may
increase working capital of the business but it will not be good for business.
2. The long term financial position of the concern can be analysed by studying the
changes in fixed assets, long term liabilities and capital. The proper financial policy
of concern will be to finance fixed assets by the issue of either long-term securities
such as debentures, bonds, loans from financial institutions or issue of fresh share
capital. An increase in fixed assets should be compared to the increase in long term
loans and capital. If the increase in fixed assets is more than the long term securities
then parts of fixed assets have not only been financed from long term sources. A wise
policy will be to finance fixed assets by raising long term funds.
3. The new aspects to be studied in a comparative balance sheet questions is the
profitability of the concern. The study of increase or decrease in retained earnings,
various resources and surpluses, etc. will enable the interpreter to see whether the
profitability has improved or not. An increase in the balance of profit and loss
CADBURYount and the other resources created from profits will mean an increase in
profitability to the concern. The decrease in such CADBURYounts may mean issue
dividend, issue of bonus share or deterioration in profitability of the concern.
4. After studying various assets and liabilities an opinion should be formed about the
financial position of the concern. One cannot say if short term financial position is
good then long term financial position will also be good or vice versa. A concluding
word about the overall financial position must be given at the end.
Comparative Income Statement:
The income statement gives the results of the operation of a business. The comparative
income statement gives an idea of the progress of a business over a period of time. The
changes in absolute data in money values and percentages can be determined to analyse the
profitability of the business. Like comparative balance sheet income statement also has four
columns. First two columns give figures of various items for two years. Third and fourth
columns are used to show increase or decrease in figures in absolute amounts and percentages
respectively.
Guidelines for Interpretation of Comparative Income Statement:
The analysis and interpretation of income statement will involve the following steps:
1. The increase or decrease in sales should be compared with the increase or decrease in
costs of goods sold. An increase in sales will not always mean an increase in profit.
The profitability will improve if increase in sales is more than increase in costs of
goods sold. The amount of gross profit should be studied in the first step.
2. The second step of analysis should be the operational profits. The operating expenses
such as office and administrative expenses, selling and distribution expenses should
be deducted from gross profit to find out operating profits. An increase in operating
profit will result from the increase in sales position and control of operating expenses.
A decrease in operating profit may be due to an increase in operating expenses or
decrease in sales. The change in individual expenses should also be studied. Some
expenses may increase due to the expansion of business activities while others may
go up due to managerial inefficiency.
3. The increase or decrease in net profit will give an idea about the overall profitability
of the concern. Non operating expenses such as interest paid, losses from sales of
assets, writing off deferred expenses, payment of tax, etc. decrease the figure of
operating profit. When all non-operating expenses are deducted from operational
profit, we get a figure of net profit. Some non operating incomes may also be there
which will increase net profit. An increase in net profit will gave us an idea about the
progress of the concern.
4. An opinion should be formed about profitability of the concern and it should be given
at the end. It should be mentioned whether the overall profitability of the concern is
good or not.
Focus of Financial Statement Analysis:
Financial statement analysis involves evaluating different aspects of a business enterprise,
which are of great importance to different users such as management, investors, creditors,
bankers, analyst, investment advisers, etc. generally, the following analyses are made while
making Financial Statement Analysis.
1. Liquidity or short term solvency analysis
2. Profitability analysis
3. Capital structure or gearing analysis
4. Market strength or investor analysis
5. Growth and stability analysis
Application of Financial Analysis:
Following are the application of financial analysis:
1. Assessing Corporate Excellence
2. Judging credit worthiness
3. Forecasting bankruptcy
4. Valuing equity shares
5. Predicting bonds ratings
6. Estimating market risk
Limitations of Financial Statement Analysis:
Financial analysis is a powerful mechanism of determining financial strengths and
weakness of a firm. But, the analysis is based on the information available in the financial
statements. Thus, the financial analysis suffers from serious inherent limitations of financial
statements. The financial analyst has also be careful about the impact of price level changes,
windows dressing of financial statements, changes in the CADBURYounting policies of a
firm, CADBURYounting concepts and conventions, and personal judgement, etc. The readers
are advised to relate the limitations of financial statements as given in the previous chapter
and also the limitations of ratios as a tool of financial analysis as discussed in Ratio Analysis.
Some of the important limitations of financial analysis are, however, summed up as below:
i. It is only a study of interim reports.
ii. Financial analysis is based upon only monetary information and non-monetary factors
are ignored.
iii. It does not consider changes in price levels.
iv. As the financial statements are prepared on the basis of a going concern, it does not
give exact position. Thus CADBURYounting concepts and conventions cause a
serious limitation to financial analysis.
v. Changes in CADBURYounting procedure by a firm may often make financial
analysis misleading.
vi. Analysis is only a means and not an end in itself. The analyst has to make
interpretation and draw his own conclusions. Different people may interpret the
same analysis in different ways.
Overview of Ratio Analysis
Introduction:
Ratio analysis is one of the techniques used to analyse the financial statements. It is one of
the most powerful tools of financial analysis. It is the process of establishing and interpreting
various ratios (quantitative relationship between figures and group of figures). Through ratio
analysis financial statement can analyse more clearly and decision made from such analysis.
CADBURYording to CADBURYountant’s Handbook by Wixon Kell and Bedford, a ratio
“is an expression, of the quantitative relationship between the numbers”.
Nature of Ratio Analysis:
Ratio analysis is a technique of analysis and interpretation of financial statements. It is the
process of establishing and interpreting various ratios for helping in making certain decision.
However, ratio analysis is not an end in itself. It is only a means of better understanding of
financial strength and weaknesses of affirm. Calculation of mere ratios does not serve any
purpose, unless several appropriate ratio are analysed and interpreted. There are a number of
ratios which can be calculated from the information given in the financial statements, but the
analyst select the appropriate data and calculate only a few appropriate ratios from the same
keeping in mind the objective of analysis. The ratios may be used as a symptom like blood
pressure, the pulse rate or the body temperature and their interpretation depends upon the
caliber and competence of the analyst. The following are the four steps involved in the ratio
analysis:
i. Selection of relevant data from the financial statements depending upon the objective
of the analysis.
ii. Calculation of appropriate ratios from the above data.
iii. Comparison of the calculated ratios with the ratios of the same firm in the past, or the
ratios developed from projected financial statements or the ratio of some other firms
or the comparison with ratios of the industry to which the firm belongs.
iv. Interpretation of the ratios.
Use and Significance of Ratio Analysis:
Helpful in decision making.
Helpful in financial forecasting and planning.
Helpful in communication.
Helpful in co-ordination.
Helpful in Control.
Helpful in efficiency appraisal.
Helpful in evaluation of financial position.
Helpful to investors, financial institution, employee.
HR POLICIES & STRATEGIES
SOURCES OF RECRUITMENT
CADBURY offers employment opportunities in a wide range of functions. The process of
recruitment in CADBURY is fair and transparent, with adequate opportunities to look for
suitable candidates both internally and from outside.
Recruitment is a continuous process in CADBURY. They regularly hold walk-in interviews
in principal cities. Campus interviews are arranged in leading institutes and universities. In
other cases, applications are invited for specific vacancies announced through advertisements
in leading newspapers or announced in this website. However some of the sources are as
follows:-
TRANSFERS
The employees are transferred from one department to another CADBURYording to
their efficiency and experience in CADBURY limited
PROMOTIONS
the employees are promoted from one department to another with more benefits and
greater responsibility based on efficiency and experience.
PRESS ADVERTISEMENTS
Advertisements of the vacancy in newspapers and journals are a widely used source
of recruitment in the company. The main advantage of this method is that it has a
wide reach, so it is used by CADBURY limited
EDUCATIONAL INSTITUTES
various management institutes, engineering colleges, medical Colleges etc. are a good
source of recruiting well qualified executives, engineers, etc. They provide facilities
for campus interviews and plas. This source is known as Campus Recruitment and it
is also used by the company
LABOUR CONTRACTORS
Manual workers can be recruited through contractors who maintain close contacts
with the sources of such workers. This source is used to recruit labor for construction
jobs. however child labor is not used by the company
OF RECRUITMENT
Recruitment in CADBURY is a very fair and transparent process with adequate opportunities
to look for suitable candidates internally as well as from outside. Applicants are generally
invited on the basis of specific advertisements in newspapers and websites. A Committee of
officers called the Central Recruitment Committee handles the entire recruitment process
comprising screening of applications, preliminary short-listing, interviews and final selection.
Every attempt is made to make the selection process as objective as possible by incorporating
tests of competence. In some cases, outside consultants are retained. All decisions of the
recruitment committee are recorded in respect of each candidate. Candidates are informed of
their short-listing and selection immediately after the interview or at the earliest thereafter.
The process of Recruitment in CADBURY Ltd
1. Identify
vacancy
2. Prepare
job description
and person
specification
3. Advertising the vacancy
4. Managing the response
5. Short-listing
6. Arrange interviews
TRAINING AND DEVELOPMENT PROGRAMME OF
THE COMPANY
Our new Performance Management System incorporates a process called Competency
Assessment and Training and Developmental Needs wherein appraisers are specifically called
upon to identify and assess training needs of employees at specific intervals that do not
coincide with Performance Appraisals. This is so that training needs can be assessed
objectively. Training is imparted to take care of an individual’s career development as well as
functional and skill enhan. Competency and Development training inputs include Skill and
general performance enhan, communication skills and Career development. Functional
training needs are identified and conducted by functional departments while Corporate HR
organizes competency and developmental inputs.
BENEFITS OF COMPENSATION SYSTEM
Employee welfare receives prime attention at CADBURY. We have several schemes for
general welfare of employees and their families. These cover education, healthcare,
retirement benefits, loans and financial assistance and recreation facilities.
Education
Education is imparted not only to children of CADBURY employees but also more
importantly to children from rural areas who do not have CADBURYess to any medium
of information or education. CADBURY schools maintain high standards and are open to
other children of the vicinity. Often these schools are the most preferred centres of
learning in the district and adjoining areas. Wherever possible, CADBURY provides
funds and infrastructure to help set up local schools, colleges and centres for learning and
education.CADBURY townships have excellent schools that are often the best in the
district. Education at these schools is subsidized for employees’ wards. They offer
attractive scholarship allowances for children studying at places away from their parents,
merit scholarships for outstanding children and financial assistance for employees’
children to pursue higher professional education.
Health Care
Liberal medical benefits are made available to employees and their family members by way
of reimbursements towards normal medical treatment, domiciliary treatments and special
sanctions for serious illness. Each of their townships has well-equipped health care centres
with qualified medical staff and facilities, ambulance, referrals and tie-ups with reputed
hospitals for specialised treatment. In addition, there are regular health checkups, camps and
programmes. CADBURY takes pride in providing various forms of medical assistance to the
families of their employees and also to all those living in surrounding villages. Each factory
has a medical centre with full-fledged doctors and the latest of basic equipment. Mobile
medical services are provided in the vicinity and regular medical camps are held to eradicate
diseases, offer medical help, treatment and preventive care.
Financial Assistance
Employees are eligible to apply for loans and financial assistance for various purposes such as
purchase of assets, residential premises as well as a scheme that provides for supply of at
subsidized rates to those building their own houses.
CADBURYommodation
At our plants and factories, employees are provided furnished and unfurnished
CADBURYommodation based on their entitlements. At many locations, the employees are
given free electricity, free water supply and free bus facility for nearby places and schools.
These houses are well-maintained and periodically upgraded.
Employee Satisfaction
In addition to periodic internal Employee Satisfaction Surveys, They participate in Employee
Satisfaction and Work Places Surveys conducted by reputed external agencies and
organisations like Hewitt Associates Grow Talent. And from time to time, CADBURY has
also retained reputed firms like Mercer and Boston Consulting Group to study our internal
work environment and employee policies and suggest areas of improvement.
They share below salient points of the latest survey of employees:
People are treated fairly regardless of religion and gender
CADBURY is a safe place to work
Management is competent in running business
Employees feel good about what we do for society
Proud to tell others I work here
Management thinks positively
The overall findings show significant job satisfaction at all levels as also deep respect for the
company, its performance management system and its overall business performance.
Recruitment for CADBURY
The recruitment and selection is the major function of the human resource department and
recruitment process is the first step towards creating the competitive strength and the
recruitment strategic advantage for the organisations. Recruitment process involves a
systematic procedure from sourcing the candidates to arranging and conducting the interviews
and requires many resources and time. A general recruitment process is as follows:
Identifying the vacancy:
The recruitment process begins with the human resource department receiving requisitions for
recruitment from any department of the company. These contain:
• Posts to be filled
• Number of persons
• Duties to be performed
• Qualifications required
• Preparing the job description and person specification.
• Locating and developing the sources of required number and type of employees
(Advertising etc).
• Short-listing and identifying the prospective employee with required characteristics.
• Arranging the interviews with the selected candidates.
• Conducting the interview and decision making
1. Identify vacancy
2. Prepare job description and person specification