UK-based company Cadbury is one of the oldest and strongest players in the Indian confectionary industry with an estimated 68 per cent value share and 62 per cent volume share of the total chocolate market. It has exhibited continuously strong revenue growth of ~34 per cent and net profit growth of ~24 per cent throughout the 1990’s. Cadbury is known for its exceptional capabilities in product innovation, distribution and marketing.

Global management processes: India occupies a high profile position in the global organization, with advocates in regional and global headquarters. Global management has allowed the local operation a high degree of flexibility in growing the business, understanding that asset utilization may be lower and returns slower to arrive, but expecting volume share to compensate for lower margins in the long run.

Local management processes: The Cadbury India team is all-Indian and has a deep understanding of local market dynamics. The business is set in a way that highlights localization across all facets – driving the belief that the only way to succeed in India is by developing localized business models. For example, the company tailored the chocolate formula in India to prevent melting in the country’s open-air high frequency store environment.

Customised business models: Local management has set up systems to test and develop products from the ground up with specialized interlinked cells that execute innovation and market testing hand-in-hand. Cadbury India is known as a key product innovator. Besides Dairy Milk, the entire Cadbury product portfolio in India has been developed locally to suit Indian consumer tastes. Packaging, marketing and distribution have all been tailored to local market conditions.

Outlook:

Diversification to sugar confectionary: Sugar confectionary is a sizeable market that offers opportunity for Cadbury. The company has the global expertise and capabilities, and local distribution, and is examining establishing a foothold in this market.

Rural expansion: Rural market and small town markets are seen as the key to spurring double-digit growth. Products such as liquid chocolate packs from the existing portfolio are expected to enable rapid acceptance.

Leverage India for offshoring: India is being leveraged for export of finished goods, as a superior destination for manufacturing best practices, and for BPO opportunities.