Now these days Cadbury and Schweppes the business is functional it is owned by many shareholders (some of whom are members of staff). The company employs around 38,000 people worldwide but in Britain 12,000 employees. The company owns 7,500 vehicles that are used for the business (delivery) in Britain. In Britain there are 17 Cadbury and Schweppes sites.
Ownership
Cadbury is a public limited company. It has the opportunity to become larger than the other forms of private business organisation. It is allowed to raise capital through the medium of the Stock Exchange, which quotes their share prices, and this creates a fullness of financial possibilities. The initials “PLC” (or plc) appear after the name of the public limited company. Only two people are needed to form a public limited company and there is no stated maximum of shareholders. In Cadbury’s case it is owned by many shareowners, some of whom are members of staff.
Cadburys business advantage is:
- Shareholders have limited liability, so it means that the shareowners lose what they put in the business and they receive annual dividends.
- It is easier to raise finance from banks, because Cadbury has many assets, which means banks are insured their money back or Cadbury’s assets instead of the money.
- Since it has many assets, it is possible to operate on large scale, which means more production and promotion for the product. This leads to Cadbury’s objective to grow the business and also to operate in a wide range of markets. This leads Cadbury to have a high income, which is a success to Cadburys objective, which is to maximise profits.
- Suppliers feel more confident about trading with legally established bodies
- There are tax advantages associated with giving shares to employees
The disadvantages are:
- Since Cadbury is a plc, its affairs are public; e.g., accounts and annual returns must be audited. This gives opportunities to competitors to get information about Cadbury. For example if Cadbury makes a loss, investors (competitors) will know about it and use it to their advantage.
- It’s a complicated business. Cadbury is a large business it has many different departments for different jobs, all these departments have to work together. Information passes between departments can be confusing.
- Cadbury has many assets, which contain many capitals, which are very costly to use.
- Since Cadbury is a large business, formatting and running, its costs can be expensive
- Since Cadbury is a plc, Heavy penalties are imposed if “rules” are broken.
Objectives
Cadbury objectives are:
- Maximise profit
- To be the number one product in a given market
- To maximise sales
- To grow
- To operate in a wide range of markets
- To give satisfaction to customers
- Have a good reputation
- To provide the freedom for workers to express them selves and suggest ideas to help the business
- Achieve best possible financial return on capital
- Boost or maintain share market values
These objectives will ensure Cadburys success as a business. From the statistics I have, it shows that Cadbury is a very successful business.
The statistics from the financial overview show the finance has just been increasing positively.
They have satisfied shareholders because their share increased by 6%.
There has been a boost in the share market value, earning 37.2 pence from 1994 and 39.4 pence in 1998, which was a 6 % increase with in four years.
Cadbury has been having an increase in profit from 1994 to 2000. From 1994 to 2000 the profit has increased from £575 million to £609 million, an increase of 6 %.
In 1997, the group introduced Managing for Value ("MFV") with the aim of producing superior and sustainable returns for its shareowners. Since 1997, we have set ourselves three medium term targets against which our progress can be measured. Primarily, these targets are growth in underlying earnings per share, free cash flow generation and superior growth in total shareowner return ("TSR"). The targets have been set over four year periods, the first from 1997 to 2000 and currently 2001 to 2004.
The table above shows that the group met its objectives of growth in underlying earnings per share and free cash flow generation. Our TSR grew 84% over the same period, and by 11% 2001.
Strategic Development
The introduction of Managing for Value in 1997 fostered a deeper understanding of, and commitment to, the optimal allocation of resources throughout the business. In the early years of the programme, management was focused on increasing returns and the profit being made on the Group's operations comfortably exceeded the cost of the capital deployed in the business. This improvement was achieved through various portfolio changes and improvements in efficiency. In the last few years, we have continued with this process while providing additional resources to accelerate top-line growth.
The re-engineering of the Group's portfolio has seen the disposal of low return or non-strategic assets including, for example, a departure from soft drink bottling in the UK in 1997. In addition, we have strengthened our existing positions with the acquisition of businesses such as Wedel in Poland in 1998. Furthermore, we have been expanding our presence in higher growth and higher return sectors of the market - for instance, the expansion of our non-carbonates presence in the US through the purchase of Snapple and our entry into European gum by acquiring Hollywood in France.
In 2001, our beverage business was significantly strengthened in Europe through the acquisitions of La Casera in Spain and Orangina in France. In the US, ReaLemon/ReaLime was a useful addition to Mott's speciality product line-up. Early in 2002, we announced that we were acquiring a 51% stake, since increased to 65%, in Kent, the leading sugar confectionery business in Turkey.
