The Business Strategies of Cadbury, KPMG and Skanska

The foundation of overall business success begins with the alignment of company strategies with the goals of project management. Essentially, project managers should be involved in planning alongside the top administration of organizations to ensure synchrony in the organisation’s overall goals. This report examines the business strategies of three companies namely; KPMG International, Cadbury and Skanska UK.  The report also compares and contrasts these tactics with specific focus on how the companies’ projects have contributed to the success of these strategies.

Cadbury

            Cadbury is a British multinational confectionary company that is headquartered in Uxbridge, the United Kingdom. Founded in 824, it is the world’s second largest confectionary with operations in more than 50 countries in the world (Cadbury.co.uk). Some of the products the company is known for include the crème egg, dairy milk chocolate and roses selection box which are exported across the world (Cadbury.co.uk). Cadbury’s business strategy is premised on high quality, value addition and effective promotional strategies (Cadbury.co.uk).

Cadbury’s UK business strategy

            Cadbury implements strategic promotional models to create place utility for its products. The models focus on connecting the company with its customers, sales and advertising, making the company’s pricing strategy effective and maximizing profits through brand positioning (Ramli 2016). The company has a robust research and development department that conducts market surveys to determine the various needs of consumers and segment the market according to the demographic factors. As a result of this segmentation, the company is able to reach people of different levels of income, gender, age, social status and other factors through implementation of promotional strategies that resonate more with them. For instance, Cadbury Temptations are meant for those with higher purchasing power in the society while products such as chocolates are popular and affordable among people of all socio-economic status (Ramli 2016). Every target market has a distinct promotional strategy. For instance, in the UK market, the company promotes Bournville not as products for sale but rather as products that should be earned as gifts. Cadbury uses both Above the line (ATL) and (BTL) marketing strategies to target various consumer segments (Kazemi and Esmaeili 2010). ATL promotional strategies are popular among the young people since they are the greatest users of both mainstream and social media platforms. These promotional strategies include television adverts that feature different Cadbury products. The company also uses celebrity endorsements to promote its products especially in underserved UK markets and regions where the demand is low. BTL promotional strategies aim at strengthening brand recall by displaying the company’s ads in strategic locations such as on hotel corners, billboards and shops so that customers who buy the chocolate may easily remember Cadbury (Kazemi and Esmaeili 2010). Cadbury’s marketing strategy has been instrumental to the company’s growth and expansion into markets where its demand was initially low.

Cadbury has a comprehensive distribution network that ensures its products reach its consumers both in rural areas and urban areas. The demand in the rural UK market is lower than its urban areas (Xinhuanet 2018). Hence, Cadbury breaks the bulk of its products into smaller quantities to boost their demand in rural areas. The company sells its products to distributors in the UK market who then sell them to retailers before the goods can reach the customers. The distribution costs in the UK market are lower than other parts of the world because there are no shipping costs involved (Cadbury.co.uk). There are instances where the company sells products directly to consumers such as institutions or other organisations that need the products in bulk.

Cadbury strives to maintain quality in the production of its products in order to maintain its comparative advantage in the market. The company uses Total Quality Management to ensure that each of its products are of high quality and exceeds the standards required by consumers (Sen 2017). The team of quality assurance managers monitors the production process and the machines to ensure they are consistent with the set standards. Moreover, the company benchmarks with the production processes of its competitors such as Nestle to learn about their strategies and use them to improve the quality of production.

One of the competitive strategies that Cadbury employs is product diversification (Cadbury.co.uk). The company has a strong product line with a variety of products which has enabled it to gain and maintain a large market share in the UK and globally. The product lines include chocolates, biscuits, mouth fresheners and milk additives among others. The strategy enables the company to compensate for the low demand for certain products by taking advantage of the high demand for others (Sen 2017). For instance, during certain occasions in UK such as during the month of February that many people celebrate love, the demand for chocolate is higher than other products such as biscuits. As a result, the company compensates the low sales in biscuits by producing more chocolates to beat the demand. In a nutshell, the strong line of products ensures that Cadbury remains relevant in the UK confectionary market at all times. Secondly, the company also uses pricing as a strategy to give itself an edge over its competitors (Sen 2017). Most of Cadbury’s products are highly priced because of their high quality in the market. As a result, the company prices its products in high and low variants to make them more affordable to all types of consumers. The prices are set in a manner that they do not exceed those of its competitors as well as guarantee the company maximum profits. The fete is achieved through optimally balancing the supply and demand of confectionary products in the market and ensures that Cadbury remains profitable (Sen 2017). Cadbury periodically conducts price surveys in the market to determine the optimal price for each product that would be comfortable for the consumers as well as make the company incur profits.

Cadbury has an effective human resource strategy that enables it to hire and retain the best talents in the UK market (Cadbury.co.uk). Employees are valuable assets in any company and there should be mechanisms to retain them to save them the costs of job placement and hiring. In addition to that, retaining employees ensures that special skills, knowledge and experience do not go to build other brands. As an employee retention strategy, Cadbury makes employees feel valuable and part of the entire Cadbury family (Cadbury.co.uk). Employees are made to be in touch with the brand and feel like they own it. As a result, the company has been able to build employee loyalty with very low rates of employee turnover. The human resource strategy is part of the company’s overall stakeholder management strategy that places the company’s stakeholders first (Sen 2017). Cadbury has an open door policy and actively listens to the concerns of its stakeholders such as suppliers, customers, communities and authorities and provides them timely feedback to ensure high levels of satisfaction. As a result, the company has been able to forge long and sustainable relationships with its stakeholders for mutual benefit.

KPMG International

            KPMG International is an international firm that provides consultancy, accounting, tax, financial advisory, assurance and legal services to clients worldwide (kpmg.com). The company’s headquarters is in Netherlands but has operations in more than 150 countries (KPMG 2017).  KPMG has more than 23000 employees working in various locations in the world.

KPMG’s UK Business Strategy

            The core pillars of KPMG’s strategy include its clients, the organisation, people, expertise and the communities. The company’s clients are central to its success in the consultancy industry. Hence, using the strategy known as “innovation to results,” KPMG strives to understand the needs of its clients through and ensuring they are met through delivery of quality services (kpmg.com). The organisation works with its clients to help them define their ambitions and develop innovative strategies that drive their attainment of goals in various disciplines. KPMG actively engages its clients to ensure they understand and own the services delivered to them. Involving its clients boosts stakeholder confidence (KPMG 2017). Moreover, they ensure their clients maintain the strategic momentum needed to achieve their goals. The action is in line with the company’s overall corporate strategy that seeks to leverage the full potential of KPMG in providing investors with reliable and sustainable commercial solutions (kpmg.com). The corporate strategy focuses on creating new financial models and deals that enable their clients to solve a myriad of challenges. The firm designs its solutions in a manner that is scalable so that they remain valid in dynamic market conditions (kpmg.com).

            The company also strives to boost client satisfaction through its growth strategy. KPMG’s growth strategy entails continuous research to keep up with changing consumer needs in the industry. As a result, the company continually devises new ways and technologies to satisfy emerging client needs. In the UK, the company is aggressive in research to develop new strategies to match structural shifts and changes in regulations (kpmg.com). Consequently, the company has retained its capacity to handle client needs in the wake of changes in technology, regulations or industrial conditions. KPMG also uses its operational strategy to enable its clients achieve their businesses’ strategic plans (KPMG 2017). The strategy involves challenging the management of their clients to determine their perceptions about their own businesses and reconstruct them to suit their strategic plans. Furthermore, the company identifies weaknesses in the businesses of its clients and recommends strategies to improve them. It also helps the businesses to develop clear and realistic goals, develop action plans and measure their levels of achievement against key performance indicators (KPMG 2017). Essentially, the company’s operational strategy emphasizes on benchmarking, value proposition and value chain analysis, cost reduction, business performance diagnostic and management (kpmg.com).

            KPMG has a large market share in the consultancy industry but faces stiff competition from other companies such as Price Water House Coopers. As a competitive strategy, the company leverages its expertise to provide top notch services to clients. KPMG employees highly qualified experts in the legal, audit, account, consultancy and other disciplines who provide cutting edge services that make the company the most after consultancy services provider in the UK and beyond. The 23000 employees in more than 150 countries are highly qualified, reflecting the company’s focus on quality (KPMG 2017). Moreover, KPMG has a robust internal training development that ensures that employees are trained to match their skills with the changing needs of clients. The employees also attend seminars, workshops and some are sponsored to go for further studies to improve their skills (KPMG 2017). Secondly, KPMG is also a leader in innovation and always adopts new technologies to improve the quality of its services and remain ahead of its competitors. The company is credited for implementing some of the most advanced knowledge management systems. For instance, KWORLD, which is a web based messaging and sharing platform that enables users to pass on and acquire immense knowledge. The company invested over 100 million dollars to develop KWORLD, an investment that has since paid off (O’Leary 2015). Using the platform, thousands of workers can hold conferences, identify and access filtered internal news and access worldwide information on any particular firm (O’Leary 2015). There are only five organizations in the world that have successfully harnessed the potential of internet browsers and combine it with Microsoft-based messaging to collaborate with other employees or organizations and share knowledge. KPMG is among the five organizations. It has plans to invest in KWORLD extranets in future so that its clients have an ever better experience (O’Leary 2015).

            KPMG has a Corporate Social Responsibility (CSR) strategy that focuses on the communities in which it has its operations (KPMG 2005). Essentially, the company has a geocentric human resource strategy that focuses on employing people from countries where the company operates. It helps to create job opportunities for communities in areas where it has operations. Diversity and inclusion of talent has boosted the company’s talent sustainability and made the communities in different parts of the world to support its operations (KPMG 2017).  Additionally, the company emphasizes on methods, techniques and practices that have no harm on the environment. The company ensures that the commercial solutions proposed to its clients are friendly to the environment so that they do not harm the communities living there. Under its Living Green and Environmental Sustainability initiatives, KPMG educates clients and the communities in the UK on environmental conservation, strategies to avert climate change and the need to use renewable sources of energy (KPMG 2005). Basically, the CSR strategy has contributed to the company’s dominance in the consultancy industry in the UK and beyond because of its concern about the needs of communities.

Skanska AB

            Skanska PLC is an international construction and development company that deals in projects such as construction of schools, bridges, tunnels, offices, airports and power plants among others. The company was founded in 1887 and is headquartered in Stockholm, Sweden (Skanska.co.uk). The company has special divisions for planning and delivery of specific categories of projects. The business divisions include infrastructure development, residential development, commercial property development and construction. According to the Construction Global Magazine (2015), Skanska is the fifth largest construction company in the world in terms of revenue generation. The company has implemented projects in more than 100 countries in Europe, North America, Latin America and the Nordic countries. Owing to its numerous operations, the company has a large work force of about 45000 employees drawn from various parts of the world (Skanska.co.uk). Owing to its high market penetration rate and large consumer base, the company has managed to maintain high profit margins for the past ten fiscal years. This tremendous growth is also attributable to the company’s effective management, committed work force, large financial economies of scale and brand positioning strategies.

Skanska PLC UK Business Strategy

            Skanska’s business strategy is premised on value creation for its shareholders using its financial and operational synergies (Skanska 2018). The company uses its expertise in its four business streams to generate operational synergies in the UK. The collaborative framework among the experts in the UK market is streamlined to yield an enabling environment that accelerates the focus on consumer needs, efficient resource utilization and sharing of best practices. Moreover, collaboration among the experts ensures that they operate within the regulatory provisions in the UK construction industry. Through collaborations, the company’s business units in various geographical locations avoid duplication and wastage of resources by integrating their production, procurement and logistical processes (Skanska 2018). Skanska also enjoys large financial economies of scale and ploughs back profits into investment projects in order to boost its market penetration and revenue margins. The company leverages its balance sheet’s good standing and to access credit from UK financial institutions to increase its capacity to finance investment projects.

            Skanska faces stiff competition from other construction companies in UK such as Metrostav, Budimex and others; hence, the company has a competitive strategy to stay atop the industry (Skanska 2014). Skanska leverages its size and financial strength to yield competitive advantages in the industry by making it the most sought after company in each of its business streams (Hall 2010). Through expansion of its size and geographical coverage of its projects, Skanska undermines the market influence of its competitors. Moreover, the risk preference nature of Skanska’s management enables the company to take up some of the most complex assignments. The capacity to take up and successfully execute complex projects in the UK strengthens the company’s brand position and gives it an edge over its competitors (Skanska 2014). In addition to that, Skanska utilizes experts who have an in depth understanding of the various markets in the UK to enhance its capacity to meet customer needs. Skanska has special training programs for locals to equip them with technical skills and knowledge on industrial dynamics in various parts of UK.  Skanska has an effective succession plan that trains and equips young employees to take up leadership roles and maintain the company’s strategic momentum in the industry across generations (Skanska.co.uk). Furthermore, the company consistently monitors and evaluates the performance of employees and establishes strong relationships with them by aligning their individual goals with the overall goal of the company. Employer-employee relationships have also been strengthened by initiatives such as Skanska Employees Ownership Program (SEOP) for all permanent employees that also boost employee retention (Skanska 2014).

            Skanska’s production strategy emphasizes on quality, cost saving and customer satisfaction (Skanska 2018). Using its five zeros strategy, the company aims to be an industrial pace setter in quality and financial management. The five zeros strategy comprises; zero loss making projects where the company ensures that its projects meet the expectations of customers to strengthen stakeholder relationships and maximize revenue. Second is the zero accidents policy which is guaranteed by a comprehensive health and safety program that cushions employees, customers and the public from accidents. Third is the zero environmental incidents where implementation of projects follows processes that friendly to the environment. Fourth is zero ethical breaches where the company operations are guided by a strong value system and organisational culture that does not tolerate vices such as corruption. Lastly is zero defects which aims to exceed customer satisfactions through high standards and little room for errors (Skanska 2010).

            Skanska’s business strategy is also complemented with a robust risk management strategy which ensures that projects are executed within the allowable risk margins. The company continually surveys the industry to identify risks and manage them in order to improve the chances of success of its projects (Skanska 2018). Essentially, the company’s operations are based on business units in different locations and which have an understanding of the market perspectives, risks, customers and suppliers and others. The business strategy is also complemented with a technology strategy that focuses on acquisition and adoption of latest technologies in the industry to improve efficiency and quality. In the UK, Skanska is one of the few companies in the construction industry that digitalized their procurement and tendering processes. The action saves the company an average of 5 million Euros per annum in the supply chain costs (Skanska 2018). Moreover, it has brought the company closer to its suppliers.

Comparison and of the Companies’ Business Strategies and how Projects Promote their Success

            Although the three companies are in different sectors, there are striking similarities in the manner in which they conduct their businesses especially because they are all atop their industries. The core pillars of each of each of the companies’ business strategies focus on their clients and meeting their needs through high quality production of goods and services. Cadbury implements this strategy through monitoring and effective management of its products along the supply chain (Cadbury.co.uk). In partnership with its stakeholders on the product distribution chain, Cadbury builds awareness among wholesalers and retailers on the right storage conditions for its products correct packaging and distribution of different varieties of products to ensure the quality is maintained to the end users. Through provision of supply chain leadership, Cadbury ensures that consumer expectations in the market are upheld by instilling a sense of competition in the industry and stimulate quality production even from the competitors (Saee 2005). Similarly, Skanska’s corporate strategy focuses on the delivery of high quality of projects to meet the needs of consumers in the UK market. Skanska has a strict policy of high quality that is consistent through conception, initiation, planning, execution, performance and monitoring of its projects and contracts (Hall 2011). Skanska’s projects reflect the UK construction industry’s benchmarks because of the high level of professionalism and expertise by which they are executed. Like, Cadbury, stakeholder engagement and building awareness is also a core element of Skanska’s project quality management system. The company builds awareness on the quality of construction materials for its suppliers to ensure that the materials procured meet the required standard threshold. Additionally, the company’s overall quality management plan consists of standards required for procedures and processes, surveillance and audit tests, conformance tests and corrective tests among others all of which have a central focus on customer needs (KPMG 2017). KPMG has a similar corporate strategy that emphasizes on client satisfaction through their participation in the execution of their projects. The company works hand in hand with customers using its ‘innovation to results’ strategy to make them understand and own the processes such as audits so that they can derive maximum benefits from the results (Darryl et al 2013).

            The three companies command a large market share in the UK partly because of the strength of their marketing strategies. Cadbury, being a British company has an in depth understanding of the market and industry dynamics and therefore applies distinct marketing strategies for each market segment. The company combines both ATL and BTL promotional strategies to target consumers of various age groups, gender, socio-economic status and geographical region and also promote brand recall. The company’s sound advertising strategy especially on television adverts and celebrity endorsements reflects the success of its business strategy (Kazemi and Esmaeili 2010). However, unlike Cadbury, KPMG and Skanska do not have direct marketing strategies. The companies’ do not rely on conventional ATL and BTL promotional strategies but rather let their own brands to sell themselves. KPMG is guided by the belief that the success of its growth, corporate and operational strategies is sufficient in strengthening the position of the brand in the UK market and beyond (O’Leary 2016). Similarly, Skanska leverages its size and financial economies to build its presence in the UK market through taking up many and complex projects in the industry (Skanska 2014). By increasing the number of projects in every business stream and ploughing back profits into other investment projects, Skanska has been able to penetrate the UK market and beyond without necessarily using direct advertising or marketing. According to Jurisch et al (2014), financial capabilities are the most important capabilities for construction companies. Hence, they need to use the capabilities to adopt competitive technologies to have a competitive edge in the market.

            There is a striking similarity in the companies’ human resource strategies as they all focus on equipping their employees with high skills, high employee retention rates, eradicating employee turnover and forging strong employer-employee relationships. Skanska appreciates the central role of employees to its success and therefore has several initiatives that build employee loyalty and skills (Desmond and Hanson 2017). The company’s construction and infrastructural development projects are evident of the high level of expertise and professionalism. The fact that Skanska is able to take up complex assignments demonstrates the high capacity of its employees. Consequently, the company is the most sought after employer in the construction industry in the UK and beyond (Desmond and Hanson 2017). Similarly, Cadbury strives to align the individual goals of employees with those of the organisation. Using internal development and training, the company trains its employees to ensure their skills remain consistent with the changes in the industry. As a result, the employees achieve their career goals as well as enable the organisation to grow. Cadbury also ensures cultural diversity in its workforce (Rao 2017). Likewise, KPMG focuses on bringing out the best out of its employees by nurturing them for leadership and building their capacity in various fields. Not only does the company hire skilled personnel but also ensure their skills are updated and the employees are motivated to do their jobs (kpmg.co.uk). As a consultancy firm for clients in various disciplines, KPMG’s projects equip its employees with leadership skills, negotiation skills, personal organisation and team management among others, which is consistent with the company’s overall human resource strategy (KPMG 2017).

            The distribution strategies of Cadbury contrast those of KPMG and Skanska. The state is probably because of the nature of the industry in which the companies operate. Cadbury’s distribution chain involves wholesalers and retailers before the products reach the consumers (Cadbury.co.uk). As a result, the company has little control over its products along the supply chain. Moreover, the company shares some of its profits with middlemen. However, the complex distribution network has enabled the company to provide supply chain leadership in the industry which has led to higher standards of production (Kazemi and Esmaeili 2010). On the other hand, KPMG directly offers its services to clients. Hence, the company does not incur distribution costs or does not split its profits with middlemen. Similarly, Skanska uses its branches in the UK to contact customers directly in the four business streams. Consequently, the company exercises a high degree of control over its services in the industry (Skanska 2014). Notably however, the distribution strategies adopted by the three companies are not a matter of choice but rather largely driven by the nature of products or services they offer. 

            The three companies have a corporate social responsibility program that focuses on protecting the communities in which their services or products are found. However, the nature of their CSR policies differs to certain extents. KPMG and Skanska’s CSR policies focus on environmental conservation for sustainable production. The companies ensure that their services are environmental friendly. Cadbury on the other hand, is not limited to environmental conservation but is also involved in other philanthropic activities such as enlightening communities on ethical consumption of its products so as to avoid the spread of certain lifestyle diseases (Cardbury.co.uk). The company also champions for integrity in the market through not only setting the pace but also educating stakeholders on responsible sourcing. Cadbury’s CSR policy has enabled it to strengthen its position in the UK confectionary market and been able to provide strategic direction in the industry. In a nutshell, the CSR strategies have endeared the three companies to the communities where they operate and boost their profitability.

                        Being the leading companies in their various industries, the three companies have solid competitive strategies as key pillars of their business strategies. The strategies are in similar to the extent that the three companies leverage their expertise and economies of scale to produce high quality commodity and services to edge out competitors in their industry. Skanska for instance, has a robust quality management system that sets the pace in the UK’s construction industry (Hall 2010). The companies have been able to stand out because of their quality and this has also been aided by the high levels of expertise of their employees. Other competitive strategies employed include price segmentation for Cadbury products to be able to appeal to different consumer segments. As a result, Cadbury’s products are enjoyed by all types of consumers in the UK market, unlike the products of its competitors like Nestle (Sen 2017). As service provision companies, KPMG’’s competitive strategy is solely based on high quality of service and client satisfaction unlike Skanska that also uses free working capital and its financial  strength to expand its investment projects (KPMG 2017).

Conclusion

Cadbury’s business strategy in the UK is premised on quality production that is guaranteed by the Total Quality Management system, promoting accessibility of its products to consumers through a robust distribution network, creating awareness of its products through sound advertising and increasing competitive advantage through product diversification, price segmentation, high quality production and effective human resource management. KPMG’s business strategy is premised on clients, the organisation, people, expertise and the communities, whose needs are met through the company’s corporate, growth and operational strategies. KPMG engages its clients to enable them define their ambition and devises cost effective and sustainable commercial solutions for them. Skanska’s business strategy is built on value creation through operational and financial synergies. Using operational synergies, the company devises cost saving production methods to accelerate consumer satisfaction and high quality production. Using financial synergies, the company leverages its technological, research and development, human resource and strong financial capabilities to increase competitive advantage in the UK construction industry. The companies’ strategies are similar to the extent that they all emphasize on client needs and satisfaction through quality production, CSR policies, capacity building for employees and competitive strategies. The distribution strategies and certain elements of competition strategies of the companies contrast but this is mainly because of the nature of their industries.

References

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