Your report should:
Outline the theory and nature of international business and the key factors supporting the increasing internationalisation of businesses.
Analyse and evaluate the challenges and opportunities the company was faced with by expanding its operations to emerging markets using a variety of different indicators and trends from a range of sources supported by theory.
Evaluate the strategy for entering and maintaining operations in a new market and discuss how globalised companies can respond to the issues arising from changing ethical expectations in foreign markets.
Case Study information – Cadbury – China: a developing market
Cadbury is a British firm that is the second largest confectionery company in the world after Mars. The business was established in Birmingham in 1824 by John Cadbury. A chocolate- making factory was built at Bournville in 1879 and the Cadbury World visitor attraction opened alongside it in 1988, followed by a chocolate research centre in 2012. Cadbury’s UK operation is based at Bournville in Birmingham, while the company’s head office is in
Uxbridge, London.
The company has been owned by Mondelez International (previously known as Kraft Foods) since 2010.
In 2010, Kraft Foods announced,
Kraft Foods is looking to double the number of Chinese cities in which it sells Cadbury chocolate within the next two years. The number of cities in China in which Cadbury products are sold would rise to about 40 thanks to the US food group`s distribution network, said Lorna Davis, president and chairman of Kraft`s China operations (Evening Standard, 2010)
Competitor, Nestlé, stated in its 2011 Annual Report,
“The emerging markets are populated by billions of people …We want not just to exploit our own capabilities to share in the development of these countries, but also become a truly local player … and participating in local culinary and nutritional traditions’ (Nestle, 2011).
Some useful reading:
Covering the acquisition by KFI (Kraft Foods inc) of Cadbury plc and Kraft’s strategy the journal article explores the move into the Indian market where Cadbury Dairy Milk had been the market leader in the chocolate category with a market share of 30 percent.
Kraft Foods, Inc. in India – The Cadbury Acquisition. Asian Case Research Journal, Vol 18, Issue 2, 371-
399(2014).
Identify their product range
When did they first start trading with China.
Brief background to the organisation including products, Countries/Continent they operate in.
Explore trading with china (historically and today). Economic/Political factors involved? Nature of FDI in China.
Importance of contemporary issues such as ethical practice
Free trade area- No Internal Tariffs
Customs Union- No internal tariffs plus common external tariff.
Common Market-Customs union plus factor mobility.
Effect: Trade creation economics of scales increased competition.
Consequences of GLOBALISATION:
Less job security
Widening pay differentials
More Job flexibility
Changing Job Structures
Higher unemployment in flexible labour market
Sustainability
Sustainable development is development that meets the need of the present, without compromising the ability of the future generation to meet their own needs
Gain competitive edge
Sustainable business practice-Human Right, Environmental Management
Stake holderengagement Disclosure.
CSR:
Charitable contribution
Employee volunteer programmes
Corporate involvement in community, Education, Employment and homelessness programmes.
Product safety and Quality.
Ethics/Ethical Practices:
Sustainability
Green Policies
Disclosure(transparency)
Analyse and evaluate the challenges and opportunities the company was faced with by expanding its operations to emerging markets using a variety of different indicators and trends from a range of sources supported by theory.