Cadbury Schweppes entering the Polish market discussion Read the Case Study in the document attached and answers the questions IN DEPTH at the end of the w

Cadbury Schweppes entering the Polish market discussion Read the Case Study in the document attached and answers the questions IN DEPTH at the end of the worksheetThere can be NO PLAGIARISM. Cadbury Schweppes entering the Polish market
Why did Cadbury Schweppes choose Poland as its point of entry into the Central and Eastern European
confectionery markets? Because there was a number of significant developments taking place there.
The Central and Eastern European countries can be divided into two groups: those which fell originally
within the Soviet Union, and others. The key difference is that the countries within the latter group only
had communist regimes for 45 years and free enterprise still existed to some degree.
The four most advanced countries within this group were Poland, Hungary, the Czech Republic and
Slovakia, of which Poland had the largest population and percentage of private sector business, as well as
a strong consumer market. It also had good prospects for investment, offered a skilled labour force and
faced neither ethnic strife nor border disputes.
Having developed a stable parliamentary democracy and signed an association agreement with the
European Union, Poland recognized that to shed its former communist image and face market forces with
a proactive, commercial approach would require major changes in its culture and attitude. One way in
which it could do this was to encourage development in Poland by its European partners, and Poland
already had a good relationship with the UK, which has a Polish community of some 150,000.
These rapidly changing political, economic and social factors were key influences in Cadbury Schweppes’
decision to enter Poland’s developing market. Another strong factor was that, despite Poland having, at
that time, one of the largest confectionery markets in Central and Eastern Europe, none of Cadbury
Schweppes’ major international confectionery competitors had established strong businesses there.
Although the Company could have taken a ‘wait and see’ approach (running the risk of missing a vital
opportunity to develop an early market lead), it decided that there were sufficient indicators to justify an
investment in Poland.
Market entry
Cadbury Schweppes had three ‘route to market’ options to consider in order to respond to Poland’s market
needs. The options were:
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Export from other Cadbury Schweppes companies
acquire or form a joint venture with a local Polish company
establish its own factory locally.
When Poland first left the communist regime the government pursued a policy of open trade which
resulted in a flood of imports. To protect local industry the Polish government established import duties
which were particularly high on goods such as confectionery.
Under these conditions, exporting to Poland was not an economically viable option to Cadbury
Schweppes. Cadbury Schweppes evaluated the leading Polish confectionery companies to assess their
suitability for acquisition or joint venture. However, several problems, such as over-staffing or lack of
investment, were found to be common across all of them. So, having rejected the first two options,
Cadbury Schweppes decided to explore local manufacture as the most appropriate route into the Polish
market.
Market strategy
Although the confectionery market in Poland was known to be large, market research was conducted to
determine whether that market would be suitable for Cadbury Schweppes’ products.
Tastes in the confectionary vary the world over and Cadbury chose to manufacture products from its
existing range which would particularly suit the Polish taste. It also decided to manufacture a range of
budget-priced products under the name of Piasten, Cadbury Schweppes’ brand in Germany.
Having identified the product range and its acceptability to Polish consumers it was then possible for
Cadbury Schweppes to forecast the potential sales which could be achieved in Poland.
This information, together with estimates of the costs involved in setting up and running the
manufacturing operation, enabled the Company to determine that the project was financially viable. In
1993 Cadbury Schweppes took the decision to invest more than £20m in building a factory and
developing a new confectionery business on a greenfield site in Poland.
Identifying the site
Cadbury Schweppes began by visiting Poland to evaluate sites in several locations to improve its
understanding of the Polish infrastructure and administration procedures, and to assess the general
employment situation and skills availability.
The decision to develop a greenfield site at Kobierzyce, near Wroclaw in south west Poland, was based
on a number of criteria:
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Overall cost
geographical location
climatic conditions
availability of mains services
access to highways and trunk roads
distance from competitors
large regional population.
A further factor was people. Cadbury Schweppes would be joining a local community and would work
closely with the local mayor and his staff at Kobierzyce, who welcomed the new investment.
Construction and engineering process
It is not an easy task to build a factory in a foreign country. It requires careful co-ordination and
considerable expertise.
Cadbury Schweppes appointed a team of engineering consultants to oversee all stages of the project, from
selection of the contractors via a process of tendering, through to the completion of the factory
construction.
The construction process was extremely challenging as the factory and offices, covering 9000 square
metres, had to be completed, and production ready to start, within one year in order to meet the
confectionery selling season of autumn to spring.
Time was not the only challenge. Temperature within a chocolate manufacturing plant is a major
consideration in a country such as Poland, where the weather varies from -15 degrees C in winter to 33
degrees C in summer. The air conditioning, refrigeration and heating of the plant were key issues, all of
which had to comply with local quality, hygiene, safety and environmental standards. The local
community also had to construct water pipes, electrical power lines and telephone lines to the factory, and
all were completed on time.
Building a factory is only one step in the implementation of a production facility. It is important to
consider how it will operate, what production techniques it will use and what products it will
manufacture.
Cadbury Schweppes formed a technical team to design, engineer and procure all of the process plant and
machinery required for the manufacture of the chosen product range.
Also required is a team of company experts who specialize in the business of making chocolate and who
understand the technical complexities of making quality products.
Identifying and recruiting for the key management roles
Just as there are challenges in building a factory in an unfamiliar country, so there are challenges in filling
all of the jobs necessary to run that factory.
A recruitment strategy had to be
designed to meet those challenges:
Should Cadbury Schweppes
transfer expatriates to Poland? If so,
how would they cope with the
language barrier and the fact that
there were no local Englishspeaking schools for expatriates’
children to attend? Could quality
local candidates be found? If not,
would potential managers relocate
to Wroclaw from Warsaw and other
major cities? How important was
experience within Cadbury
Schweppes versus knowledge of the
Polish market?
Cadbury Schweppes’ human resource management strategy for the Polish project was to identify local
candidates wherever possible. This would give Polish individuals a sense of freedom to manage their
business within a familiar environment and according to local needs, supported by resources and
experience from other parts of the Cadbury Schweppes global company.
However, there was a known shortage of experience locally, particularly in the finance and marketing
functions, so the company anticipated that it would need to have a fair amount of expatriate involvement,
particularly in the early stages of getting the Polish business operational.
A multi- disciplinary team was formed to:
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identify the key management roles to be filled within the Polish operation
devise a recruitment plan to attract the best quality candidates
prepare an induction and training process for new employees.
A structure for the top management team was devised. Job descriptions were then written for the key
management roles. To do this, decisions about the degree of functional expertise required had to be traded
off against knowledge of Cadbury Schweppes and its operations, local Polish experience and general
‘know-how’.
A recruitment consultancy was then chosen to identify a shortlist of candidates for the key positions. The
consultancy used a combination of headhunting (where candidates are approached on a company’s behalf)
and job advertisements in Poland and the UK. Bearing in mind that Cadbury Schweppes was new to
Central and Eastern Europe, this was very much a learning process for the team members concerned, as
they knew little about Polish recruitment practice or what to expect in terms of quality and experience of
candidates.
Some interviews were conducted via an interpreter, which added another level of complexity to assessing
candidates. And, before making offers of employment, research was carried out to determine the salary
and benefit levels which would attract the best candidates to join the company. The final decisions on
recruitment were taken by the European Managing Director and the Managing Director of Cadbury
Schweppes’ German company, Piasten, who would be responsible for overseeing the development of the
Polish company.
Development of an induction plan ensures that new employees deliver effective work performance as
quickly as possible after joining the company. As part of its induction plan for the Polish operation,
Cadbury Schweppes brought key Polish employees to the UK to provide an overview of the Group’s
global operations, an introduction to the company’s philosophies, values and history and then the
confectionery industry and Polish market. The Polish team was also introduced to colleagues established
businesses elsewhere in the Group, who would be able to provide information and advice when needed.
In new ventures such as this, there is a real demand for company knowledge and experience, particularly
in the early stages of development. Such opportunities are often taken up by existing Cadbury Schweppes
managers who are encouraged to move internationally within the Group to gain wider experience, while
transferring their knowledge newcomers.
Cadbury Schweppes offers a series of career programs for junior and senior managers to gain such
experience and managers from the Polish business are already moving elsewhere within the Group.
Community benefits
A new business brings many benefits to the local community. One of the benefits derived from this
project was that the funds generated by the sale of land to Cadbury Schweppes helped to enable a new
school to be built in Kobierzyce.
Another key benefit was that, in an area of high unemployment, local applicants secured many of the
factory jobs. Cadbury Schweppes is also committed to actively contribute to the communities in which it
operates and to improve the environment in which people live and work. Its operating units support
community activity through locally targeted programs throughout the world. This may include financial
support, commercial sponsorship and the provision of local facilities.
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Why did Cadbury Schweppes choose Poland as its point of entry into the Central and Eastern
European confectionery markets? (50 words)
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What were the company routes to market’ in Poland? What route the company chose? Why?
(50 words)
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Why the company chose to locate the factory in Kobierzyce, near Wroclaw in south west
Poland? (50 words)
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How did the company hire people in key management roles? (50 words)
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What were the challenges in the Construction and engineering process? (50 words)
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How did the factory benefit the community? (50 words)

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