Monday, November 19, 2007

Delicious divorce!

How can divorces be delicious? For starters, Cadbury Schweppes plans to bring in Cadbury plc as its new identity once its separation is complete. Strategically, the company will take up a cost reduction initiative to ‘focus on fewer, bigger and more value-creating initiatives’ and ‘significantly reduce complexity across all aspects of the business’. Cadbury now plans to close 15% of its manufacturing sites globally while reducing 15% of its labour force. This is to achieve mid teen percentage margins by 2011, from the 10.1% in 2006. Over the next four years, the company aims to abridge its organisational structure for better execution of a focused commercial strategy. It was in March 2007, that Cadbury announced its plans to split Americas Beverages and confectionery, and of late confirmed that a ‘sale is the more likely expected as a outcome’. While showcasing tremendous confidence, the company believes that both the businesses have enough potential to operate in independent ways. On this cost reduction programme spanning 2007-2011, the estimated investment has been decided at $895 million, of which $99.4 million will be non-cash. Furthermore, the company has also restructured its confectionery business, with Britain, Ireland, the Middle East and Africa (BIMA) forming one part, while Americas, Asia Pacific and Europe (rest) representing the other.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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