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Case Study 2 The Hershey's Company

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Eric Gutierrez

on 3 May 2013

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Transcript of Case Study 2 The Hershey's Company


Increase total product production per time
Use more cost efficient material/packaging
Go Green
Advance their CSR
Improve their labor in the U.S. and internationally
Create sponsorship
Cultural growth
Invest in foreign markets Core and Distinctive Competences

Superior Chocolate Quality
Manufacturing Ability
Brand Name
Product Innovation
Strengths & Weaknesses Continued

Intangible Assets; is the product of the human, financial, physical capabilities and resources allow for patent obtainment through integration.

Structural-Cultural Assets; Growth trends upheld, market share defense. Policies and plans being implemented.
Strengths & Weaknesses Continued

Value Chain
Supply chain

Customer perspective of Hershey Co in marketing, services and processing resources

Current operations in different product lines. Activity in Acquisitions for gain in revenues. Opportunities and Threats Pros and Cons of Solutions to increase foreign market share
Pro’s Expand globally brand name, Increase global market share,
Con’s A slow loss of Market share in North America, Loss of profits Possible Solutions to increase presence in foreign countries

Invest more money in foreign market
Sponsorships of foreign local teams’, ranging from recreational to professional levels Hershey’s Company Mission

“Bringing sweet moments of Hershey
Happiness to the world every day”
What it means to stakeholders:
Business Partners
Communities Hershey’s Company

“Continuing Milton Hershey’s legacy of commitment to consumers, community and children, we provide high-quality HERSHEY’S products while conducting our business in a socially responsible and environmentally sustainable manner." Hershey’s Company
Founded in 1894 by Milton S. Hershey
Headquartered in Hershey, Pennsylvania.
Largest Manufacturer in North America
Created the Milton Hershey School Strategic Alternatives

In looking at Hershey's current Growth Strategy, we recommend that there be focus on establishing a larger portion of the global market. Becoming more International can prove prosperous. Like seen in China, the remaining "BRIC" countries may have a demand for American fashioned chocolates and candies. These countries are developing their social class structures with more disposable income, which in turn fuels sales and company revenue. Listing the findings Current Threats posed by those competitors Executive Officers 
President/CEO: John P. Bilbrey
EVP, CFO and Chief Administrative Officer: Humberto P.Alfonso
SVP & Chief Growth Officer: Michele G. Buck
SVP & Pres-Americas: Thaddeus J. Jastrzebski
SVP-Global Operations: Terence L. O'Day
SVP & Pres-Asia, Middle East & Africa: Peter F. Smit
SVP & Pres-United States: E. Daniel Vucovich
SVP & General Counsel and Secretary: Leslie M. Turner
SVP & Chief Human Resources Officer: Kevin R. Walling
SVP & Chief Commercial Officer: D. Michael Wege Chocolate and Sugar Confectionery MAJOR COMPETITORS Industry Group Mars Kraft Ferrero Nestle Mondelez International Inc Specific Environment
Strong International Presence General Environment:
Better CSR concerning cocoa bean extraction Kraft and Nestle A Internal Analysis
Strengths and Weaknesses.

Financial Assets; Expected revenue growth, liquidity ratios, financial ratios and operations.

Current Ratio; 1.46
Acid Test; 1.006
Debt to Equity; 3.586

Physical Assest; Expanding manufacturing through acquisitions, High levels of resources produced globally

Human Resource; Candy making skills, functions, judgment calls. Strengths;
Financial stability in leveraging and revenue growth
Internal processes for giving employees meaning.
External functions to give customer meaning
Acquisitions; Horizontal for sustainability and growth strategy Product line success, through expanding product and focusing on adding value to them.
40% U.S industry market share
Adding Value for the customer Weaknesses;
About 90% of RM is imported from foreign suppliers. This introduces the ethical dilemmas of labor in other countries.
Corporate culture geared for aggressive growth, through Marketplace Approach.
Culture that act as a Defender, rather than diversifying implimented srategies. Political Environmental Sociocultural Legal Economic Technological Political Likely future regulations for climate change

Potential future regulations:
International trade
Ethical sourcing

Growing national recalls

Stricter government bodies with more oversight Environmental Sensitive to price fluctuation in sugar, corn, peanuts, and dairy

U.S. Midwest undergoing a super drought

Drought in U.S. demonstrates exposure to climate change

Climate scientists predict climate change will continue Sociocultural Changing sociocultural environment

CSR sustainability model
Child Labor
Need to green

Exposure to changing demand -- loss of interest in innovation Technological Reliance on technology
Many more

Electronic attacks from terrorists, other countries, and domestics with agendas

Risk of significant damage to operations if unaddressed, costly to address Competition Bureau of Canada inquiry ongoing

Alleged restraint of trade/ collusion

Likely settlement with government

13 civil lawsuits resulted

Possible U.S. inquiry may follow Legal Economic Recession destabilized Hershey's hedging practices

U.S. recovery lagging and hard to predict

Sustained global recessions mixed bag
Damage to competitor supply lines
Reduced competitor resources
Increased likelihood of foreign expansion into U.S. markets Mars and Nestle SVP & Chief Growth Officer of The Hershey Co Limitations; Limited to a minor share of the Global industry share.
Cultural growth ideas are limited to North American expansion Bloomberg, 14 Jan. 2010. Web. 25 Apr. 2013. <http://www.businessweek.com/magazine/content/10_04/b4164036499160.htm>.
Financial statement information"Hershey's Bliss Uses Certified Cicia." Supply Side MMR. MMR Is the Property of Racher Press, Inc, 14 Jan. 2013. Web. 30 Apr. 2013.
Goudreau, Jenna. "Hershey's Provocateur- In- Chief Push The Candy Company To $10 Billion." Orbes.com. Business Source Complete, 4 Mar. 2013. Web. 30 Apr. 2013
"Hershey Company." Hoovers. Hoovers, n.d. Web. 25 Apr. 2013. <http://www.hoovers.com/companyinformation/cs/competition.The_Hershey_Company.41159547e6950ee8.html>. "Hershey Lays Out Its 5-Year International And Growth Plans." - Seeking Alpha. N.p., n.d. Web. 26 April 2013. <http://seekingalpha.com/article/682931-hershey-lays-out-its-5-year-international-and-growth-plans>.
"Hershey's Profit Beats Estimates as Costs Drop." Yahoo! Finance. N.p., n.d. Web. 02 May 2013."The Hershey Company Revenue and Financial Data."
The Hershey Company. N.p., n.d. Web. 02 May 2013."The Hershey Company Revenue and Financial Data."
The Hershey Company. Ed. Hoover's Inc. Hoover's Inc A D&B Company, n.d. Web. 02 May 2013. Pogharian, Mark. "Hershey's." The Hershey Company. N.p., 8 Dec. 2011. Web. 02 May 2013."Supplier Superstars." Convenience Store News 49.2 (2013): 5. Business Source Complete. Web. 2 May 2013Tang, Olivia. "Access to Library Resources: Login." Access to Library Resources: Login. IBIS World Industry Report 31135, Jan. 2013. Web. 02 May 2013Thomas, Maria A. "Hershey's Profit Beats Estimates as Costs Drop." Yahoo! Finance. Reuters, 25 Apr. 2013. Web. 02 May 2013. <http://finance.yahoo.com/news/hersheys-profit-beats-estimates-costs-225341122.html>.Yahoo! Finance. Yahoo.com, 30 Dec. 2012. Web. 30 Apr. 2013,"Yahoo! Finance - Business Finance, Stock Market, Quotes, News." Yahoo! Finance. N.p., n.d. Web. 02 May 2013. Kraft Foods Inc. Rep. Security Exchange Commision, 15 Apr. 2012. Web. 26 Apr. 2013. <http://www.sec.gov/Archives/edgar/data/1103982/000119312512080318/d277353d10k.htm>.Lindell, Crystal.
"Hershey CreatesChocolate Connection Between Students in U.S, Ghana." Www.candyindustry.com. N.p., Jan. 2013. Web. 01 May 2013."Mars United States." Mars. Mars.com, n.d. Web. 26 Apr. 2013. <http://www.mars.com/global/about-mars/marspia/marketsummaries /mars-united-states.aspx>.
"Nestle USA." Nestle. Nestle.com, Sept. 2010. Web. 26 Apr. 2013. <http://www.nestle.com/asset-library/Documents/Library/Presentations/Zones/Nestle_USA_BAlford_Sep2010.pdf>. Work Cited
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