Cadbury Schweppes Strategic Dilemma of Trebor Bassett Essay -- Value

Cadbury Schweppes Strategic Dilemma of Trebor BassettCadbury Schweppes is a UK-based beverage and confectionary group founded in 1969 with the merger of two English groups (Cadbury and Schweppes). This family-managed group grew and flourished by dint of the years. It became an international major(ip) player in the late 80s and was admired by its peers for such(prenominal) an ascent. In 1990 the group bought two little entities from the uniform billet and merged them into a single unit Trebor Bassett. The CEO of this unit soon became the CEO of the group (1993) and he then realized that the success of the departed years was seriously in danger and that a real turn needed to be taken. John Sunderland (CSCEO) and John Stake (Human Resources Director) decided to spend time trying to understand the problem and finding the adapted solutions.Let us see how to change from a budget-driven strategy to a sustainable value-driven strategy.The following pages will try to show how the prece dent success was in fact a satisfactory underperformance of CS, then how a real change in the way of see the business helped to recover and finally what became the challenge in 1999. I. Cadbury Schweppes in 1996 a satisfactory underperformance1. An admired orderCadbury Schweppes, born after the merger of two major companies in 1969, was an admired company in 1996. Indeed thanks to Sir Dominic Cadburys governance from 1983 to 1996, based on an international development and several strategic acquisitions, the company had become a truly global player the financial company turnover increased by 30% between 1990 and 1996, the operating profit by 144%. This performance was underlined by the Most Admired UK Company Prize, awarded by the representatives of Britains top 250 publicly traded companies and 10 leading investment dealer companies.In 1996, Cadbury Schweppes gathered activities in two major fields, both consumer-oriented confectionary and beverages. The beverages branch was h ighly competitive, all the more so as few giant players operated on the market. Cadbury Schweppes owned international bottling and partnership operations and sold products in 149 countries. The company, divided into five divisions in 1996, had a varied product portfolio, based on international brands such as Schweppes or Dr. Pepper/Seven Up, acquired by the group in 1995. As for the ... ...over deliver (= Game playing)- The Group was too far extraneous from the BU and markets to appreciate the complex strategy issues- Strategy of achieving market volume and exploiting scale economy in order to protect short-term revenuesGrow bigger through steady volume increases price discounts in an attempt to protect volumes irrational brand and packaging size proliferation with no real marketing strategy (and gamble of cannibalisation)- No Piloting tools (managers comments A lot of data, not a lot of good facts)Opportunities Threats- Fragmentation of the market- Long term potential of the sugar confectionary business - Total sweets market was stagnant- Low end market private labels had already captured 20,000 tons owing to the strength of British major retailers- New ambition entering the market in its most profitable niches- Raw material prices shooting up- Price competitionEXHIBIT 2 COMPETING ENVIRONMENT OF THE British SUGAR CONFECTIONARY MARKETThe five forces model of Porter allows a better analysis of the attractiveness and value of the British sugar confectionary market in the 1990s