Cadbury Schweppes - Corporate Choice and Management "The role of the parent is to add value to the business units"

Cadbury Schweppes: Corporate Choice and Management

“The role of the parent is to add value to the business units” (Johnson and Scholes, 1999:296)

Corporate Governance

The Board of Directors of Cadbury Schweppes is responsible for ensuring that the Group competes successfully in an ever-changing environment, achieves its objectives and meets the needs of its stakeholders. During the last few years the Board has had to make many strategic decisions in order to best meet the needs of their customers and stakeholders. These decisions have included the sale of beverage brands in 160 markets to The Coca Cola Company so that the Group could concentrate on core products and provide better shareholder value. In order to meet shareholder expectations it was also decided to restructure the business management hierarchy and to make a number of acquisitions.

This is a preview of the whole essay

The Board of Directors of Cadbury Schweppes is responsible for balancing the Groups diverse product range, as it owns many brands that are at different stages of the product life cycle. It had to ensure that the product portfolio is well balanced, complements each other, and matches the skills and competences of the Group to maintain competitive advantage. It focuses on heartland businesses that are easy to develop and enhance Strategic Business Units (SBU) strategies. There is a close fit between the critical success factors of the SBU’s and the Board. This has been enhanced by the range of skills possessed by internal and external directors who have made various acquisitions and agreements between Cadbury Schweppes and other global companies. This can be demonstrated further by the key chocolate companies profits growing by an average of 9% during 1999. Between 1995 and 1999, turnover increased from £3791 million to £4324 million and trading profit increased from £506 million in 1995 to £685 million in 1999, showing that the Board of directors has made strategic decisions that have been of extreme benefit.

Appendix 5 shows a matrix of competence development for Cadbury Schweppes. It follows a related diversification strategy that has to be carefully managed by the Board of Directors in order to have a positive effect on Cadbury Schweppes global operations.

Financial Strategy

Cadbury Schweppes’ governing objective is growth in shareholder value. Its growth is measured in terms of increasing shareholder value by 10% each year, generating £150 million of free cash flow every year and by whether it doubles the value of shareowners’ investment within four years. The Board of Directors is resp

¥Àxx€>0J2ƒ

ÿÿÿ2Cadbb@_î°pD9�½EÜ/]@€åfP¼^PWƒŸbP zB×Pÿÿã^ury Schweppes: Corporate Choice and ManagementTony Hobbs
jeremy fensom

þÿà…ŸòùOh«‘+'³Ù0´˜ Üèü$ <Hd
p

|
ˆ

”œ¤¬ä3Cadbury Schweppes: Corporate Choice and Managementadb
Tony HobbswonyonyNormalb

jeremy fensompe

2reMicrosoft Word 9.0C@@Ò¹5PYÀ@Tƒ,ÆÂ@Tƒ,ÆÂn Research and Development is quite substantia