Why did Cadbury Schweppes choose Poland as its point of entry into the Central and Eastern European confectionery markets? Because there were 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 recognised 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.