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Cadbury India Review

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1. Tangible Resources

a) Financial Resources:

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* Firm’s cash and cash equivalents-
The total cash and cash equivalents of the firm stood at around Rs. 271.5 Crores in the year ended March 2009 (before merger with Kraft). Liquidity is important for a business to factor in for unforeseeable events. The ideal cash reserve requirement can be calculated by taking into account and listing possible unfavorable events and assigning probabilities to them. Current Ratio-1.04

Quick ratio-0.68
These ratios indicate that the firm has the ability to meet its short term obligations and has an efficient operating cycle.

It also indicates that it is being able to meet its working capital requirements from current liabilities.

* Firm’s capacity to raise Equity and Debt-
The Debt/Equity ratio of the company is as low as 0.02%. This ratio is negligible and it can be said that it is almost an all equity company. Because of such a capital structure of the company, it gives the signal of a safe investment.

The risk associated with the company will be low and hence it will be able to raise additional debt as well as equity with reasonable ease. However, we suggest that the company can take the benefit of financial leverage by raising debt in case of future capital requirements. It is outstanding that the company has huge

Reserves and Surplus and hence they can fund projects through Internal Equity. The interest coverage ratio is also very high. It stands at 136.88. This indicates that the company will have no problem in raising debt and it also might be able to raise debt at a considerably low cost. Note: All financial data is from Final Report of March 2009 since the company was merger post that.

Resources| Value| Rarity| Difficult to Imitate| Organization| Competitive Implications| Economic Implications| Cash reserves| YES| NO| NO| NO| Competitive parity| Normal| Equity RaisingCapacity| YES| YES| NO| YES| Competitiveadvantage | AboveNormal| Borrowing Capacity| YES| YES| NO| YES| Competitiveadvantage | AboveNormal|

b) Physical Resources:

* Plant and Facilities-
The company has manufacturing facilities at Thane and Induri in Maharashtra, Malanpur in Madhya Pradesh, Bangalore in Karnataka and Baddi in Himachal Pradesh and 4 sales offices at Mumbai, Kolkata, New Delhi, and Chennai. The corporate office is in Mumbai. The company also has a Cocoa Research Centre in Kerala. Cadbury India Limited is going to increase its manufacturing capacity by three times at Malanpur in Madhya Pradesh. * Product Portfolio-

The company operates in five categories namely, Chocolate, Beverages, Biscuits, Candy and Gum category. The company has a wide range of products to offer in all these categories.

Resources| Value| Rarity| Difficult to Imitate| Organization| Competitive Implications| Economic Implications| Plant and Facilities| YES| NO| NO| NO| Competitive parity| Normal| Product Portfolio| YES| YES| YES| YES| Competitiveadvantage | AboveNormal|

2. Intangible Resources

* Workplace and culture-
Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG company in India, by the Great Place to Work Institute. It has received this recognition over and again for a number of years. The company has undertaken various initiatives focused upon improving the safety culture at its plants. * Brand name-

Cadbury India enjoys a value market share of over 70 percent in the chocolate category. It has won several awards; the major ones being: “Client of the Year” title at the EFFIES 2012, ranked 4th amongst India’s 50 Most Admired companies by Fortune India, Best Marketer in India, etc. Uncontested, Cadbury is one of the most popular names in the category of chocolates and beverages and it enjoys a phenomenal reputation. * Sustainability-

Cadbury has achieved 5% reduction on specific energy consumption, C02 emissions, waste generation and water consumption. Energy saving projects such as hot water generation by use of biogas, installation of diffuser at various factories has helped reduce carbon emission by 8% and energy consumption by 5%. * Contribution of community-

Cadbury India has a tradition of caring for the environment and enriching quality of lives of the communities we live and work in. It has associated with various national and international organizations for causes of hunger (Akshaya Patra), natural calamities (SARVAM), Make-a-Wish and non formal education (Sahyog). * Leadership team-

Cadbury India after its merger with Kraft Foods, has the advantage of having a combination of the best leader in various executive and management roles. After the merger, the company decided to retain management and adopted the best policies of Kraft foods. These steps gave Cadbury a distinguished team of leaders.

Resources| Value| Rarity| Difficult to Imitate| Organization| Competitive Implications| Economic Implications| Workplace culture| YES| NO| YES| YES| Competitive edge| Slightly abovenormal| Brand name| YES| YES| YES| YES| Sustained Competitive Advantage| AboveNormal| Sustainability| YES| YES| YES| YES| Competitive Advantage| Above Normal| Contribution to community| YES| YES| NO| NO| Competitive edge| Slightly AboveNormal| Leadership| YES| NO| NO| YES| Competitive Parity| Normal|

References:
http://www.cadburyindia.com
http://www.indiainfoline.com/Markets/Company/Fundamentals/Directors-Report/Cadbury-India-Ltd/500793 http://www.moneycontrol.com/financials/cadburyindia/balance-sheet/CI#CI

Cite this Cadbury India Review

Cadbury India Review. (2016, Sep 29). Retrieved from https://graduateway.com/cadbury-india-review/

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