Page 7: Running the new company
Acquiring a new company has a major impact, which can be seen by the change in the trading profit example figures and the source of these profits. (Table 5). The figures show the tip of the iceberg as issues relating to management structures and operational factors need to be addressed.
Cadbury Schweppes commits itself to the principles and practice of developing management talent. In this particular example, the company would take it as a matter of principle that the best person should be appointed to each job, so that the most appropriate managers from Dr Pepper/Seven-Up would be appointed.
With the merger and the formation of the new operating structure many of the Dr Pepper/Seven-Up employees remained in similar positions or were offered the most appropriate job and some were given very significant promotions within the new structure.
With the combined group the aim would be to realise the benefits of the merger. These would be to:
- Use the critical mass with bottlers to grow brand portfolio volume.
- Exploit the opportunities in the marketplace.
- Realise synergy benefits in purchasing, manufacturing, marketing, selling and administration.
- Develop Dr Pepper internationally.
- Maximise strong cash flow to help reduce debt.
- Optimise the use of employees' skills.
The new management team has to ensure that these benefits are achieved and that the massive investment in Dr Pepper/Seven-Up proves to be worthwhile.