Growing the value of a business for shareholders
A Cadbury Schweppes case study

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Page 6: Examples of MFV in action

MFV is producing a deeper understanding of the relative profitability of brands and market sectors as business units implement a VBM approach to developing business strategies and identifying opportunities to create value.

A number of business units have identified opportunities to increase value by launching new products, re-branding and re-packaging existing products and switching marketing support and attention to brands that research shows create a greater return. For example, in the UK at chocolate manufacturer Cadbury Ltd, Turkish Delight, Caramel and Cadbury's Buttons were identified as brands that generated a high return and they have received greater marketing support, which is helping to boost sales.

Another example is a new range launched by UK sugar confectionery Trebor Bassett Ltd. Trebor's VBM analysis identified an opportunity to re-brand and relaunch a range of products that had historically been produced under different brand names and sold at different price points. The new product range, called Bassett's Fundays, markets 25 packs of Trebor Bassett's popular products - ranging from Fruit Gums to Mint Imperials - in one clearly branded format which are now sold at one price.

On the culture front, almost 10,000 employees throughout the group are taking part in a training programmed called 'sharpening the Culture' (STC) which focuses on helping individuals and teams become more accountable, aggressive and adaptable in their day to day activities.

Feedback shows the STC behaviours are having an impact. Employees are using them to challenge the way they operate and interact with each other and to focus on working more effectively and producing better results. For example, the launch in Australia of a new product called Cadbury Favourites was undertaken much more swiftly than usual and using less money because the employees involved approached the task more accountably, aggressively and with adaptability.

Sales teams throughout the group are now focused on the value generated by sales, not just the amount of stock sold. Targets and bonuses for sales people in a number of the group's business units are now measured on the value generated by the sale instead of the traditional approach of measuring the amount - volume - sold. This new approach is helping ensure the performance of sales people is clearly linked to value creation.

MFV has produced a better understanding of the utilisation of company assets. For example, the cost of building a new high speed production plant needed by Mott's, a North American beverages business, was cut in half when it was built in Mexico, close to the American border, with under-utilised plant and machinery collected from other parts of the group.

MFV is also helping employees focus on the impact efficiency has on financial performance. For example, factory workers at Cadbury Ltd have launched an aggressive 'offensive' on waste. Teams have appointed 'waste Champions' to lead the assault and reduce waste in factories to a minimum as one of their contributions to MFV.

Cadbury Schweppes | Growing the value of a business for shareholders