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Background Mission and vision Timeline Corporate Social Responsibility Product life cycle Marketing mix Financial Analysis SWOT analysis PESTLE Porter Five Forces Recommendation (general strategy, Ansoff Matrix, & Success

Criteria)

Table of Content

Hershey’s Background

• Largest producer of chocolate in North America.

• Milton Hershey is the owner.

• Theme park.

• The first flagship store New York's time square.

• Hershey products are sold to more than 2 million outlets.

Hershey’s Mission& vision

Vision:“Achieving consumers needs which making chocolate more healthy, delicious and delightful for life”

Mission :“Bringing sweet moment of Hershey happiness to the world every day.”

Hershey’s Social Responsibility

• The theme park includes , school, housing and park for employees of Hershey.

• Milton Hershey school for orphan with residential services including meals and health care.

• Join the international cocoa initiative foundation.

• Change product packing to minimize the waste during the manufacturing process.

SWOT AnalysisStrengths:

• High quality products

•Strong name and brand image

•Corporate Social Responsibility

Weaknesses:

•More focus in US market

•Advertisement expenses

•71% Cadbury generate their sales outside USA.

Opportunities:

• Changing tastes or flavors; new sugar free products

•Expanding across Asia

•Develop new packaging (go green)

Threats:

•High competition with Cadbury, Nestle, and Mars

•Manage the increase in prices of raw materials

•Increasing competition

Hershey's Financial

Analysis

Ratio/Year 2006 2007 2008       

Current Ratio 0.98 0.88 1.06       

Quick/acid test 0.43 0.38 0.39              

Debt/Equity (%) 1.83 2.17 4.72       

     Gross Profit Margin% 37.7 33 34.25

       Operating Profit Margin % 20.08 9.28 11.49

       Return on Assets (%) 13.44 5.32 8.56

       Return on Equity % 97.86 36.11 81.8

              

Net profit Margin % 11.31 4.33 6.07       

Return on Invested Capital % 22.82 10.55 14.82       

Interest Coverage 8.55 3.86 6.02       

Total Assets Turnover 1.17 1.18 1.3

World’s largest chocolate bar

Hershey’s life cycle

Marketing Mix

Product: Hershey’s products include chocolate, gum, cereal bars and sugar

confectionery products. Chocolate is the largest product of Hershey and accounts for 55.8% of their products.

Price: Setting price a bit below that of premium chocolate will cause

consumers to believe they are getting premium chocolate at an affordable price.

Place: Hershey distribute to more than 2 million outlets. Hershey's products are sold in about sixty countries worldwide

Promotion: Hershey spend a lot of money advertising for their products. Hershey uses different types of media to advertise for their

products. Hershey offers different type of copons.

Hershey’s Porter five forces

Potential EntrantsLow

SuppliersHigh

Industry Competitors

HighBuyersLow

SubstitutesModerate to

high

Political/Legal Analysis:- Major issue is child labour in cocoa farms- Government control prices

Economic Analysis- In 2006, due to hurricane impact, the price of refined sugar

decreased from $0.38 to $0.31 per pound (Hershey’s 10-K, 2009).

- This allowed companies to cut retail costs and redistribute the savings.

- A lot of waste material is produced, and companies spend thousands of dollars on disposing it.

Hershey’s PESTLE

Sociocultural Analysis:- Consumers want a larger variety of chocolates and healthier alternatives to

the traditional chocolates.- Dark chocolates provided several health benefits by adding a flavonoid in the

chocolate that prevents various cardiovascular problems (Chocolate Trading Co., 2005).

Technological Analysis:- The chocolate and cocoa industries lack supports of Non-Government

Organizations (NGO), which restrict the farmer’s access to business guidance, funding, and continuing education.

- Farmers can’t learn new technologies making them less efficient.- This prevents the chocolate manufacturers from gaining cocoa efficiently to

create more chocolates for the consumer.  

Hershey’s PESTLE

BCG Matrix

MARKET SHARE

MARKET GROWTH

General strategy:

cooperate level strategy Growth Diversification Merger and acquisition

Future strategy

Recommendation

Ansoff’s Matrix

Diversification

Product DevelopmentMarket Penetration

Market Development

New

Old

Mar

ket

Risk

NewOld

Risk

Success criteria Suitability Acceptability

Fair trade fun organisation Feasibility

Recommendation:

Thank You for Listening

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