Opportunities and Threats of the Cadbury Logistic Providers - Case Study Example

Logistic providers Student’s name Institution Executive summary Cadbury is an international company which was started in the year 1824 by john Cadbury. It was started as a small grocery. It has been expanding with an increasing rate until now, a worldwide company serving customers from various parts of the world. Logistic providers play an important role which has contributed to the business success. However, Logistic providers are faced with several challenges as well as draw opportunities from the business as discussed in the paper. Table of Contents Table of Contents 3 Introduction 5 Opportunities and threats of the Cadbury 5 Opportunities of the Cadbury logistic providers 5 Durability of the product 5 Locations 6 The new methods of production 6 The new modes of transportation 7 Effective communication 7 Globalization 7 Challenges logistics providers are likely to face 8 Increased level of inventory 8 Satisfying all the customers 8 Raw materials 9 Communication 9 Accessibility of the product 9 Other challenges 10 Conclusion 10 References 11 Introduction Logistics are very important for a business to operate effectively and efficiently. They are responsible of planning, implementing, controlling the efficiency of the product, ensuring effective forwarding and reverse flow and the storage of the goods and services. Logistic providers are also responsible of any related information between the original point of production and the where the product is consumed in a way that it satisfies all the customers’ needs. Card burry business was started in the year 1824 by John Cadbury. John Cadbury started by opening a small grocer’s shop in several streets in Birmingham where he sold cocoa and drinking chocolate. From there, the small business expanded and by 1924, dairy chocolate was the nest product in the industry (Wood, 2011). The business still expanded and become an international business by the year 2004. Opportunities and threats of the Cadbury Despite the success of the business, there are opportunities that accompany the logistic providers as well as faced with some challenges. The opportunities and threats are faced in terms of the nature of the product, the business geographical locations and the modes of transportations. Some are also concerning social-economic factors such as technology, globalization and international economic integration. Opportunities of the Cadbury logistic providers Durability of the product Cadbury products such as the drinking chocolate among others are mainly durable in that they can stay for a long period of time without going bad. With this durability, the logistics are able to transport the product to further place at a low cost in that there no need of regenerators among other things. This enables the product to reach many people and so the company’s volume of sales increases. As a result the business makes large amounts of profits, increasing the amount of capital and hence business expands further (Schramm, 2012). Locations Cadbury has several locations in various parts of the world. This makes its products more accessible in that a client can acquire the product from anywhere. This makes it easy for the logistics to ensure that the product reaches all the customers. A customer will always want to maximize his or her utility at the lowest cost possible. Given a commodity that is placed at a near place in that there is no transportation cost incurred in consuming it, many customers will purchase the products and in large quantities. This has contributed to the company’s success and it is likely to grow further (Nagel, 2008). The new methods of production Technology is growing with an increasing rate. This makes it easier and efficient to conduct business operations. With the new and more efficient methods of production, the production process has become more efficient and faster compared to when john Cadbury used the pestle and mortar to process drinking chocolate. Chocolate is now produced in large quantities and at a high quality level. This attracts more customers as the product become more attractive to them. The increasing number of customers as obviously increases the volume of sales, increases the profit generation and hence the business becomes more successful (Geisler, 2007). The new modes of transportation The new modes of transportation have contributed to the success of the business. Initially, it was hard and costly to transport the products to further places for trade. However, the new modes of transportation such as the more improved roads, the helicopters among others have made it easy for the products to be transported to other places and at the specified time. This has increased the accessibility of the products and also made it possible for the business to acquire customers from various places contributing to its success (Doerr, 2006). Effective communication Currently, communication has become more effective in that the largest population of the world is able to access information from the various parts of world. This has made it easy in cases of advertising and promoting the product. It is easy to make the public aware of the commodity by just advertising it through the media such as the television and radio. Social media can also be used to advertise the product such as the face book, twitter and what sup. The company can also post some information concerning its products on their website and the other social media pages where customers and other people can get to know about it (Wood, 2011). Globalization Globalization is also another opportunity the logistic providers have. Customers being found from various parts of the world have made the business to have several locations in the other places for making its products more accessible. The various locations have made the business to recruit employees from the foreign countries also. Employees from different backgrounds have different knowledge and skills. Collecting ideas from the various employees leads to optimal decision making where strategies and objectives made are optimal (Schramm, 2012). Effectively implementation of those strategies and objectives also becomes easy directing the company to success. Challenges logistics providers are likely to face Increased level of inventory As the business continues to grow, the amount of inventory also increases. This is likely to be a challenge to the logistic providers. Inventory needs adequate space for storage purposes where it can remain safe up to the time of use. However, very large amount of inventory becomes high costly to store. It requires enough storage facilities such as more warehouses and equipments such as refrigerators. All these facilities are very expenses to acquire in a short time. This will, therefore affects the company’s performance as much of the generated profit will need to be allocated in building the warehouses and purchasing other equipments for storage purposes hence reduction of profit (Doerr, 2006). Satisfying all the customers As previously stated, Cadbury is expanding with an increasing rate serving customers from various countries in the world. As it continues to grow with the same pace, the business will have very large amounts of customers in the long-run with various cultures and backgrounds. The company’s aim is to satisfy all the customers’ needs. Different people have different needs and wants. It is therefore, likely to be a challenge for the logistic providers to ensure that all the customers’ needs are satisfied. Even individuals within the same segments differ in their time and preferences towards the product (Geisler, 2007). Raw materials As the business expands, the required volume of raw materials and other firm inputs such as labor among others also increases. This is likely to be a challenge to the logistic providers especially in times of the raw materials. Suppliers and the company have different businesses and so they cannot grow with the same passé. There is, therefore, likely to be a shortage of raw materials. For the process of production to take place effectively, there should be enough raw materials and so the shortage can mean that, the product will not be produced in the required quantity leading to customers being less satisfied (Nagel, 2008). Communication Different customers or individuals have different cultural and religious believes. In some cultures, being in a social media group is perceived to be sinful while others may not own things like television or radio. Those that can afford may fail to access some stations due to problems of network and others. It therefore becomes a challenge to the logistic providers to identify the appropriate mode of communication in which all customers can access information concerning the product (Schramm, 2012). Accessibility of the product As the business becomes more globally and customers increasing in various places in the world, the company will be required to have more locations in the various countries. This means that the process of production will need to take place from the respective locations. Transportation of raw materials in those places may be a challenge since there may be poor roads among others. This can lead to failure of the business in some of the locations. This failure may contribute to reduction in the overall company’s level of profit in the long-run (Wood, 2011). Other challenges Other challenges lie in the probable for increased mandated cost, decrease in manufacturing head counts and supply chain along with required consolidation in logistics and transportation.  The Cadbury consolidation and the need to transition the North America pizza business to Nestle will surely add further distraction and disruption in business processes and systems, not to mention the obvious need for dedicated resources to successfully manage the transition plans without major glitches (Doerr, 2006). Conclusion Cadbury is among the most successful businesses in the world. It started as a small kiosk and expanded continuously with an increasing rate. It is now an international company serving customers from various countries in the world. It has a variety of products such as chocolate and cocoa. However, with the increasing growth, logistic providers are likely to be faced with some challenges as well as opportunities. Such opportunities are; the durability of the product as it is improved further, the increased number f locations, the more improved modes of transportation due to developments and the more effective transportation. The challenges likely to be faced are concerning; how to ensure that all the customers from the various places are informed on the product, getting enough raw materials for carrying out the production processes among others. References Doerr, K. (2006). Impact of diffusion and variability on vendor performance evaluation. Monterey, Calif.: Naval Postgraduate School ;. Geisler, M. A. (2007). Logistics. Amsterdam: North-Holland Pub. Co. :. Nagel, C. (2008). The integration of rail transport into freight transport logistics chains of logistic service providers. Hamburg: DVV Media Group. Schramm, H. (2012). Freight forwarder's intermediary role in multimodal transport chains: a social network approach. Heidelberg: Physica-Verlag. Wood, H. P. (2011). Truck tolling understanding industry tradeoffs when using or avoiding toll facilities. Washington, D.C.: Transportation Research Board of the National Academies. Read More