Financial Management of Cadbury Limited

Financial Management of Cadbury containCadbury Public Limited c bother has been a large world(prenominal) friendship in the confectionary industry. The friendship was acquired by kraft paper Foods in February 2010. Initi altogethery, the beau monde was k immediatelyn as Cadbury-Schweppes Public Limited Company before the separation of its US beverage unit which is currently known as Dr Pepper Snapple Group (Cadbury PLC, 2010, p. 5). This process was undertaken through a demerger that took place between the two firms. In 2007, the caller-up was sufficient to shutdown its factory in Keynashan.2008 saw Cadbury Public Limited Company reciprocation its Monkhill Confectionary for 58 million. As a depart, 800 employees were transferred to save them from losing their jobs. From 2009, the go with started replacing its chocolate coer with palm oil (Cadbury PLC, 2010, p.4). There was no major betterment in this strategy since it was supposed to parent taste and texture with a pertinacious term target on ontogenyd consumer demand. As all this was going on, in that respect was a general backlash from consumers. These strategies and b ar-assed strain approaches were mainly being tried out in New Zealand. later on things failed to materialize, the family was forced to revert back to its initial cocoa butter that had been the core of its business. The phoner also resolved to source for cocoa beans by using good, open and recognizable trade channels which would not be questionable. Initially, the change to palm oil had reportedly cost the company over 12 million in sales (Cadbury PLC, 2010, p. 7). In January 2010, Kraft Foods distinguishable to buyout Cadbury.Kraft Foods had made an offer to take over the company for 10.2 gazillion. This was jilted because the company considered the price as under abide byd. It was not until 2010 that a consensus was reached between the companies afterwards a hostile bid. Kraft Foods had agreed to kick in out 11 .5 billion for the atomic reactor. To make this successful, it had to borrow 7 billion (Kraft Foods, 2010, p. 8). In doing all this, the company had a vision of becoming a global confectionary leader.Kraft Foods refractory to base itself in Pennsylvania. As a matter of fact it has a controlling carry in Cadbury chocolates in the get together States. In pose more(prenominal) than(prenominal) emphasis on this partake in, the company had seen it as the best fortune to increase its securities industry access to a global trade that has been change magnitude considerably over the recent geezerhood. This takeover had been longly criticized across all divides as they saw Cadbury as a very crucial company in Britains economy (Kraft Foods, 2010, p. 4). There had been a general view that this deal was putting 30,000 jobs at risk.There was a protest on the summation of advisory fees that banks were charging in overseeing this deal. A bank owned by the governing body (RBS) was a ble to finance 84% of the deal. February 2010 saw Kraft Foods finalize the deal by securing 71% of the companys shargons (Kraft Foods, 2010, p. 3). It fell footling of its expectations of having a 75% stake that could harbor made it delist Cadbury from the striving grocery store and make it part of Kraft Foods. The company was later on able to achieve this (its targets) which led to the delisting of Cadbury from the rail line market. After this, the CEO and the pecuniary officer had to resign.DiscussionBusinessCadbury has an constituted business with operations in the United Kingdom, Ireland, Australia, New Zealand and the United states. The United Kingdom confectionary had eight factories with a staff of 3000 employees (Bradley, 2008, p. 5). In the UK some of the products it has been producing are done so under indorse like the Cadbury biscuits under the license of Burton foods.From Ireland, chocolate produced is more than 25 million (Costello, 2009, p. 4). This has been ex ported bringing in a lot of earnings. Its nominal head in the US is responsible for(p) with the manufacture of mints and gums. The companys Cadburys contain been found and sold in the country but they are construct by Hersheys. This Cadbury can mostly be found in Hersheys stores (Bradley, 2008, p. 5). In addition to these, the company has factories in both Australia and New Zealand.To make it more effective the company has been upgrading its manufacturing plant in Claremont. In a more broad perspective, the company has a capacious range of products that it has given to the market in a bid to enhance its business. In addition to these, it has its crotchety disgraces that pass on helped to generate enough revenues for the company. To cater for a large market, the company has more than 50 brands with 40 of them being more than 100 years old (MacAlister, 2009, p. 10). In the year 2004 after a decline in sales, the company was engaged in a restructuring program. To strengthen its business the company has been acquiring others to increase its market forepart.Investors and productCadbury has a large brand that has al carriages given it a strong market presence. It has a immense tale of confectionary brands that have always been introduced every year to ensure that the market has variety to choose from. This message that every year has seen a new taste of brands. In addition, the company has beverages that have a long record from 1783 (Costello, 2009, p. 14).On the other hand it has favourite brands like Bassets and Bourn vita amongst others. Cadbury worldwide is a brand name that has established itself vigorous in the market.The company trades its shares in the London stock exchange market. The last time before the company was acquired its shares were trading at 863 (Muspratt, 2009, p. 8). Its shares have been doing fountainhead in the market because of the long term strategy that had been adopted to increase its apprise. By investing in the company, i nvestors have a reason to know that their investments give grow as the company has a global presence in a wide market.Kraft Foods has a wide range of brands for the market to suit the clear-cut and diverse tastes and preferences. These brands are spread out in more than one hundred fifty-five countries that the company has a presence in (Weisenthal, 2009, p. 9). Its strong brand presence has helped to build its core business in the market. With its 50 brands, the company has been able to serve a wide market satisfactorily without any puzzles.This has been well done to ensure that everybody has a good taste. As a result, consumers have been more passionate about their brands. The company trades its shares in the New York stock exchange market. In addition to these, those who have invested in the company are given dividends as the company has a dividend yield of 4.0 (Weisenthal, 2009, p. 19). Those who wish to be part of the company are encouraged to do so as information regarding its performance is provided.Financial market environmentThis environment is responsible for an effective selling management. The two companies have had a good history in terms of their financial performance save for a a couple of(prenominal) occasions. Before the acquisition, the company (Cadbury) had started outsourcing most of its activities including marketing.Because the company has a wide global presence it has spent a lot of money in marketing activities to increase its market share. This has not been resisted at all as it has been aimed at increasing its value with investors in mind. Marketing activities have got the necessary financial support to strengthen the companys brand in the market.After acquiring Cadburys, the company (Kraft) has ensured that it engages in active marketing campaigns to strengthen its presences. The company has a wide global market that is competitive. Because of this, the management has always provided a good work out for marketing activities. T his can be well demonstrated in the TV commercials that the company has been running in disparate countries.Since the company has a presence in more than 155 countries it has ensured that its marketing is matte in every place (MacAlister, 2009, p. 15). Marketing has been done with an aim of increasing the companys market value which has helped to increase revenues. Because the company has a large financial muscle, a plenteous amount of money has been allocated to the management to ensure that its marketing activities are felt in the market.Business strategyThe two companies have had progressive gain because of good business strategies. Cadburys has had a strategy of ensuring that it has presence in incompatible markets to reach a wide base of customers (Holson, 2000, p. 9). To ensure that its manufacturing activities are not interfered with, it has plants in different countries for uninterrupted business activities.Because of a wide market, the company has ensured that it conti nues being innovative in giving customers new products every now and then to suit their divergent tastes and preferences (Weisenthal, 2009, p. 4). The company has adhered to healthy and safety practices to give itself a good name in the market. From its history it can be noted that it has introduced new products every year for continuity.Kraft Foods has been involved in a lot of research to come up with new products to increase its wide range of brands. The company has over 70 brands and this has made consumers more comfortable with their wide range became of choice (Holson, 2000, p. 2). Apart from this, the company has operations in more than 155 countries and this has enabled it to reach a wide market that it can sell its products to.It has also been involved in acquisitions to give it a wider market presence that the initial companies had. These activities have been done to enhance its financial position so that it can improve on its operations well (MacAlister, 2009, p. 5). To c apture the attention of the market well with an impact, the company has engaged in promotions to enlighten the public about its products. These promotions have made consumers more erudite about the company and its activities.Recommendations to maturate Forex strategiesWith Forex exposures, the company has been unprotected in different areas. Because the company has a wide market presence (global), it is exposed to economic, rendering and transaction Forex exposures. It can experience problems when their foreign accounts have appreciable loss. This problem can be brought about by currency devaluation and political events in different markets. It is recommendable for the company to always hold foreign currencies for the shortest time practicable before conversions to avoid such problems.The company might develop a foreign sales channel as it continues going global as part of its strategy. This implies that it will have to come up with a way of hedging against any future devaluatio n. It will need to use Forex futures to compute the future cash flows when they are denominated into the dollar as it is the globally gratifying currency for business.The new company should invest in currency exchange traded funds. This will protect it from Forex exposures with a long term approach to enhance investors value. The company has a long term strategy of increasing the value of shareholders to encourage more investments. In cases where the company feels threatened, it can sell short of the currency exchange traded funds.In addition, the company has to enhance their operational activities to develop a good Forex strategy. This means that the company must have understandably laid down responsibilities that will be reviewed by the management regularly. It will also need to have an effective Forex trading and reporting arranging as it has a global presence. To enhance this, the management has to ensure that there is effective reporting, centralized tracking and good unifo rm accounting policies in place.Data capture will also save the company from a lot of Forex exposures. This means that the accounting practices that are being utilize have to be accurate in presenting reports. On the other hand, the company must ensure that its business engages in solid data capture processes. wide policies have to be put in place supported by effective personnel as a way of ensuring sustainable Forex strategies. This means that all the policies that the company will engage in must be approved by the board before they can be used anywhere else. To enhance this, employees need to be well educated and informed. ratiocinationThe company has good prospects ahead because it has consolidated itself as a result of integrating acquisition strategy. This means that it has a high probability of attaining a wide market reach.