Case Analysis Hersheys
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Executive Summary
The Hershey Company is the leading American chocolate manufacturer and a global leader in chocolate goods. Hershey produces, markets and sales its products is over 50 countries. Hersheys products are recognized and loved all around the world by chocolate and candy lovers alike. The Hershey Company has a unique history like no other and has been existent for over a century. The company has experienced two world wars, a great depression, and 21 U.S presidents. Evidently, the Hershey Company has been tried and tested through time and is here to stay.
Milton Hershey is the founder the Hershey Foods. He built the company in order to manage an orphanage in 1909. Milton Hershey and his wife donated their entire personal fortune to the orphanage, The Milton Hershey School. Today, Hershey Foods cares for boys and girls through corporate profits for its School for Orphans (David, 2011, Page 11), “The school continues to operate in Hershey, and provides free education and residential services including meals and health care to almost 17,000 children in need, and still is be administered via The Hershey Trust Company” (David, 2011, Page C192).
Hershey does not only focus on its support for young boys and girls, it is also environmentally focused, “Hersheys role as an environmental steward is also evident that its plants use recycled water that is later purified for various landscaping projects” (David, 2011,
Hershey has iconic brands that include: Hershey Kisses, Reeses, and the Hershey Bar. These brands are instantaneously recognized all around the world. Hershey also focuses on the more health conscious customer giving many health benefits with its natural and organic chocolate bars through the Dagoba brand and Flavonols, its dark chocolate brand (David, 2011, Page C193). Today Hershey products are sold in over 2 million retail outlets. The Hershey Company is clearly committed to continuing Milton Hersheys vision from so long ago.
Existing Mission, Objectives, and Strategies
The Hershey Companys mission is, “Bringing sweet moments of Hershey happiness to the world every day”. The company explains and defines its objectives in the 2009 Corporate Social Responsibility (CSR) letter to stockholders:
Environment
Community
Workplace
Marketplace
Minimize impact while meeting functional requirements
Sustainable Product Design
Sustainable Sourcing
Efficient Business Operations
Positively impact society and local communities where we live and work
Corporate Philanthropy
Contribution of Expertise
Employee Giving &
Volunteerism
Foster a desirable place to work
Safety & Wellness at work
Openness & Inclusiveness
Employee Value
Proposition
Engage in fair and ethical business dealings
Integrity of Supply
Consumer Well-Being
Alignment with Customers
Hershey Foods is organized divisionally by geographic region. The divisions are the United States, Canada, Mexico, Brazil and Other (David, 2011, Page 224).
New Mission Statement
The Hershey Company mission is to continue with Milton Hersheys legacy and provide high-quality Hersheys products. We will continue our commitment to our community, our consumers and most of all, our children. We will be socially responsible and continue to conduct our business in an environmentally and sustainable manner.
Case Analysis
SWOT Analysis
Strength
Weakness
Pay employees well and treats them well
Acquired Grupo Lorena, one of the leading confectionary companies in Mexico
Niche market appealing to the increasingly health conscious shopper.
Joint Venture with Lotte Confectionery Company and Godrej Beverages
Heavily dependent upon domestic markets
Higher energy and input costs resulted in increased costs
Joint Ventures are costing more than anticipated
Lower priced products has caused sales to falter
Opportunity
Threats
Increased advertising budget
Consumers are becoming more health conscious as Hershey have and are delivering more healthy snacks
Expansion into the international market
Seasonal sales highly contribute to overall net sales
Sugar is controlled through government regulation
Cocoa prices have been on the rising trend and are still currently rising
Recently closed a PA plant resulting in 300 lost jobs, this affects employee morale in other Hershey plants
Competitors like Nestle are continually growing
Case Analysis
Space Matrix
Financial Stability (FS)
Environmental Stability (ES)
Return on Investment
Unemployment
Leverage
Technological Changes
Liquidity
Price