Individual assignment topic analysing the hershey organization

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Overview about Hershey

Hershey Company, also known as (1894–1927) Hershey Chocolate Co., (1927–

Hershey Chocolate Corporation, later renamed Hershey Foods Corporation from 1968 to 2005, is an American manufacturer of food products, primarily chocolate and sugar-based confections Its Hershey’s Milk Chocolate bar, wrapped in brown and silver, is perhaps the best-known American candy bar of the 20th century The company’s headquarters are in Hershey, Pennsylvania.

Originating in the 1880s, The Hershey Company traces its roots to Milton S Hershey, who founded the Lancaster Caramel Company in Lancaster, Pennsylvania After seeing German-made chocolate-processing machinery at the 1893 World’s Columbian Exposition in Chicago, Hershey decided to pursue the chocolate business, laying the groundwork for what would become a global chocolate brand.

During the 1960s, Hershey expanded by purchasing the maker of Reese’s Peanut Butter Cups and two pasta companies, a diversification move that led the company to rename itself Hershey Foods Corporation in 1968 Two notable changes followed soon afterward as part of this strategy After decades of selling the standard milk chocolate bar for five cents, Hershey raised its price.

10 cents (bar size had diminished over the years) And in 1970 the company responded to increased competition—most notably from Mars, Inc.—by advertising to consumers for the first time.

Hershey History – A History of Goodness

Milton Hershey's love for confection began in childhood and blossomed into a business when he founded The Hershey Chocolate Company in 1894 By 1900, the company sold its first candy bar, launching a legacy that would grow well beyond its early milestone Today, The Hershey Company's portfolio of brands extends far beyond the iconic HERSHEY’S Milk Chocolate Bar, featuring a diverse range of chocolate and confection products enjoyed worldwide.

 1894: Lancaster Caramel Company: Milton Hershey incorporates the LancasterCaramel Company and establishes Hershey Chocolate Company as a subsidiary.

 1900: Milk Chocolate bars: Launch of Hershey’s Milk Chocolate bars

 1907: Hershey’s Chocolate Kisses: Hershey begins manufacturing Hersey’s Chocolate Kisses.

 1963: H.B Reese Candy Company: Hershey acquires H.B Reese Candy Company

 1971: Hershey’s Tropical Bar: Hershey’s Tropical Bar sent to the moon with Apollo 15 Astronauts

 1973: Hershey’s Chocolate World: Hershey’s Chocolate World, the first retail center, opens

 1979: $1 Billion Achieved: Hershey achieves $1 billion in annual sales

 2000: World Cocoa Foundation: Founding member of the World Cocoa Foundation and begins investment in West Africa to support cocoa farmers and improve cacao agriculture.

 2018: Michele Buck becomes CEO: first female CEO

 2019: #35 on Diversity Inc: The Hershey Company recognized as #35 on Diversity Inc Top 50 Companies for Diversity

Hershey Products

Hershey is best known for its chocolate products, forming the core of the Hershey’s Brand Chocolate lineup The lineup includes Hershey’s Extra Dark, Hershey’s Symphony, Hershey’s Drops, Hershey’s Miniatures, Hershey’s Pot of Gold, Hershey’s Nuggets, Hershey’s Kisses, and Reese’s Brand products.

2 Situation of Hershey organization in nowadays

In August 2021, the Hershey Company implemented a health and safety policy mandating full vaccination for all corporate employees working in its 19E corporate office, Tech Centre, U.S commercial sales offices, customer teams, Hershey's Chocolate World salaried employees, and the offices of Amplify, One Brands, and Lily’s This policy aims to ensure a safer workplace and maintain operational continuity across these locations.

On October 4, 2021, the company demonstrated its commitment to employees by sponsoring multiple vaccination clinics and permitting accommodations for religious or medical reasons It has also engaged in an interactive process with employees to evaluate when an accommodation is needed and to determine the appropriate steps.

Under this vaccination policy, about 98% of the teams covered have been vaccinated, reflecting strong adherence In recent weeks, a small number of our corporate and commercial teammates—less than 2%—who did not get vaccinated have been separated.

Since the pandemic began, our frontline manufacturing and retail employees have continued to work safely on the front lines, backed by enhanced health and safety protocols These measures include wearing masks, maintaining physical distancing, rigorous sanitization, and access to on-site vaccination clinics to protect staff and sustain operations Our clear commitment to employee safety reinforces our ability to serve customers while keeping teams healthy.

The Hershey Company has committed more than $2 million in cash and product donations to COVID-19 relief efforts worldwide Our corporate giving team is working closely with community nonprofit partners to ensure they receive the needed support during the pandemic, and our response continues to evolve as the situation changes.

Additionally, our Hershey Company Employees 1 Fund is actively supporting st Hershey employees and their families who experience severe economic hardship as a result of this situation.

3 Hershey’s Vision/ Mission/ Core Values

Vision statement

Hershey’s vision is to offer the best merchandise at the best prices while continually making the shopping experience enjoyable for customers The company aims to deliver top-notch services at affordable prices Hershey is not only committed to offering healthy products but also to changing the perception that chocolate brands are unhealthy.

Hershey's vision centers on offering the best merchandise at the best prices while making the shopping experience enjoyable for every customer The company operates in more than 90 countries and aims to expand its services by delivering affordable products to a broad audience of consumers and corporate buyers By emphasizing affordability and a pleasurable shopping experience, Hershey products remain popular with both corporate clients and individual customers.

The Hershey Company focuses on making the shopping experience enjoyable by delivering value for money, offering the best products at competitive and affordable prices, and ensuring customers feel they get great quality for their spend Beyond its core business, Hershey also backs social initiatives, such as establishing the Hershey Trust Company to support disadvantaged children and help underprivileged communities.

Mission Statement

Rooted in Milton Hershey’s heritage of responsibility toward customers, communities, and children, the Hershey Company remains committed to serving shoppers with integrity It delivers high-quality Hershey’s products while conducting its business in a socially conscious and environmentally sustainable way.

Core Values

Deliver

Testing our prototypes to seek solutions accelerates problem-solving and expands our learning This iterative approach quickly resolves issues while generating actionable insights We proactively engage with colleagues and available resources to find answers, tapping collective expertise to move ideas forward Our decisions are designed to positively impact the community and are implemented promptly, turning insights into timely action.

Collaborate

We believe in achieving results through global partnerships and collaborative effort Our approach to collaboration centers on learning from others, valuing their opinions, and appreciating their skills and expertise Even with differing perspectives, we listen, express our views, and engage in constructive dialogue Once a decision is made, we commit wholeheartedly to the goal and work together to turn it into reality.

Develop

At HERSHEY’S, we foster a culture of learning and continuous growth, inviting everyone to experiment with ideas and embrace diverse perspectives We celebrate successes and openly share the lessons learned from our mistakes, while maintaining an open feedback loop that helps us learn from others and keep improving.

Question

We invite everyone to question ideas by examining the processes, problems, and opportunities they reveal By welcoming challenges to existing norms and conventions, we foster critical thinking and continuous improvement With a thoughtful approach, we ponder questions, draw inspiration from the world around us, and translate the gathered data into practical, resourceful actions that move things forward.

Innovate

At Hershey’s, we consistently encourage everyone to propose new and unconventional ideas and approaches, inviting deliberate challenges to the status quo and fresh perspectives that ask how we can change or innovate This culture of open inquiry fuels the exchange of insights, opening the door to new possibilities and breakthrough solutions.

Inspire

We thrive on our individual passions and draw inspiration from others, fostering an empowering culture that encourages people to explore new possibilities By speaking with conviction and listening closely to our coworkers, we build trust, collaboration, and a clear, shared vision for everyone.

4 Hershey’s SWOT analysis (SFAS, IFAS, EFAS, CPM matrix)

SWOT analysis

Strengths Analysis

As a leading player in the confectionery industry, Hershey leverages a diverse set of strengths to drive sustained growth These strengths protect its market share in established markets and enable expansion into new markets, reinforcing its competitive advantage By strengthening its brand portfolio, distribution network, and innovation capabilities, Hershey continues to thrive in the marketplace and seize opportunities across both mature and emerging markets.

 Highly successful at Go to Market strategies for its products.

 Successful track record of developing new products – product innovation.

 Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

 Automation of activities brought consistency of quality to Hershey products and has enabled the company to scale up and scale down based on the demand conditions in the market.

The company achieves high customer satisfaction among current customers and builds strong brand equity among potential customers through its dedicated customer relationship management (CRM) department.

A strong dealer community is the backbone of the business, creating a culture among distributors and dealers where they not only promote the company’s products but also invest in training the sales team to show customers how to maximize the benefits of the products.

 Strong distribution network – Over the years Hershey has built a reliable distribution network that can reach majority of its potential market.

 Good Returns on Capital Expenditure – Hershey is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Weaknesses Analysis

Hershey's weaknesses are the areas where the company can improve, and a robust strategy rests on making deliberate choices to address those gaps Through SWOT analysis, Hershey can identify internal weaknesses and external threats, then turn these insights into actions that strengthen its competitive advantage and strategic positioning in the market.

 There are gaps in the product range sold by the company This lack of choice can give a new competitor a foothold in the market.

Hershey shows limited success beyond its core business While it remains a leading name in the confectionery industry, the company has faced challenges with diversification into new product segments under its current organizational culture.

 Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

 Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel This can impact the long-term growth of Hershey

Hershey faces a higher employee attrition rate than its industry peers, meaning the company must spend substantially more on training and development to replace departing staff This elevated turnover drives up recruitment and onboarding costs and can impact productivity, underscoring the need for retention-focused strategies and competitive talent development to sustain performance.

Although the product delivers strong sales, its marketing is underdeveloped, and its positioning and unique selling proposition (USP) are not clearly defined This lack of clarity undermines messaging and can invite competitive attacks in the market segment To secure sustainable growth, the strategy should clearly define the target audience, articulate the product’s differentiators, and craft a compelling USP that resonates across marketing channels.

Financial planning is currently inefficient, resulting in suboptimal cash management The current asset ratio and liquid asset ratios indicate that the company could deploy cash more efficiently, improving cash utilization and strengthening overall financial performance.

Opportunities Analysis

New technology enables Hershey to implement a differentiated pricing strategy in new markets, aligning prices with value, demand, and local conditions This approach helps Hershey retain loyal customers through exceptional service while also attracting new buyers with compelling value-oriented propositions beyond price By pairing differentiated pricing with superior customer experience and targeted offers, Hershey can expand its market presence and strengthen its competitive advantage.

 Lower inflation rate – The low inflation rate brings more stability in the market, enable credit at lower interest rate to the customers of Hershey.

Over the past few years, Hershey has invested heavily in its online platform, establishing a robust digital sales channel that reaches new customers This strategic investment opens a promising avenue for growth in the years ahead By leveraging big data analytics, the company can gain deeper customer insights, better understand buying patterns, and tailor products and experiences to meet individual needs, turning online engagement into measurable, data-driven results.

 Government green drive also opens an opportunity for procurement of Hershey products by the state as well as federal government contractors.

Recent environmental policies create a level playing field for all industry players, unlocking opportunities that Hershey can leverage to reinforce its advantage in new technology and capture greater market share in the emerging product category.

Government agreements—such as adopting a new technology standard and entering into a free trade agreement—are opening up new markets for Hershey, providing a strategic opportunity to enter emerging markets and expand its global footprint.

 The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Hershey to increase its profitability.

 The market development will lead to dilution of competitor’s advantage and enable Hershey to increase its competitiveness compare to the other competitors.

Threats Analysis

 Increasing trend toward isolationism in the economy can lead to similar reaction from other government thus negatively impacting the international sales.

 Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.

 The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

 The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.

 Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Hershey

 Imitation of the counterfeit and low-quality product is also a threat to Hershey’s product especially in the emerging markets and low-income markets.

 Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

SFAS Analysis

Successful track record of developing new products

0.05 3 0.15 X It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

High level of customer satisfaction

With its dedicated customer relationship management department, the company has been able to achieve a high level of customer satisfaction among its present customers It has also built strong brand equity among potential customers.

The marketing of the products left a lot to be desired

Although the product delivers strong sales, its market positioning and unique selling proposition are not clearly defined This ambiguity reduces differentiation and leaves the brand exposed to competitive attacks in this segment, jeopardizing long-term growth.

Limited success outside core business

0.1 2 0.2 X Hershey is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

0.1 5 0.5 X The low inflation rate brings more stability in the market, enable credit at lower interest rate to the customers of Hershey.

New customers from online channel

0.05 3 0.15 X The company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Opening up of new markets

0.1 3 0.3 X The adoption of new technology standard and government free trade agreement has provided Hershey an opportunity to enter a new emerging market. Threats

Stable profitability has drawn more entrants into the industry over the past two years, increasing competition and placing downward pressure on both margins and overall sales The company faces potential lawsuits across multiple markets due to regulatory and legal exposure, highlighting the need to navigate varying market conditions and compliance risk.

0.1 4 0.4 X Different laws and continuous fluctuations regarding product standards in those markets.

Growing strengths of local distributors

0.1 3 0.3 X A threat in some markets as the competition is paying higher margins to the local distributors.

IFAS – EFAS Analysis

- Market strategies for its products

- Good returns on capital expenditure

- Gaps in the product range

- Limited success outside core business

- Only compatible with present business

Leveraging brand recognition in new segments

Investing into R&D to thwart Consumer/Non- Cyclical industry disruptors.

Investing into customer- oriented services and supply chain

Get out of the business and focus on growth areas

Porter’s Five Forces analysis of Hershey's examines the company’s competitive landscape and the factors shaping its sector, evaluating Hershey's position by considering the threat of new entrants, the threat of substitutes, the bargaining power of buyers and suppliers, and the intensity of competitive rivalry within the confectionery industry.

Hershey's Five Forces analysis helps to analyse its current position in the market based on factors like competitors, customers, suppliers, financial strength & alternate solutions.

Threat of New Entrants

The threat of new entrants in Hershey’s Porter Five Forces analysis is shaped by Hershey’s position as one of the world’s leading chocolate manufacturers and its diversified production of chocolate, non-chocolate confectionery, and baked sweets The company’s strong brand recognition, extensive distribution networks, and economies of scale create high barriers to entry for new rivals attempting to compete in the confectionery market Although opportunities exist for newcomers in niche segments and online channels, substantial capital requirements, access to established retail channels, and the need to build a broad product portfolio limit the attractiveness of entry As a result, the threat of new entrants is relatively moderate to low, with ongoing innovation and shifting consumer preferences able to gradually erode entry barriers.

206 billion USD currently and is projected to reach up to 225 billion USD in the next couple years.

Hershey’s targets a broad audience, encapsulated in its slogan “There is something for everyone,” and offers a diverse product range—from chocolates and candies to mints, spreads, and beverages—designed to fit different income levels and ages The company operates in over 70 countries, giving it a substantial global footprint For new entrants, competing on price is difficult thanks to Hershey’s economies of scale and the advantage enjoyed by larger players Incumbents also benefit from well-established supply chain and distribution networks, as well as strong brand equity and image Additionally, shelf-space battles and other shared resources raise entry barriers for newcomers Taken together, these factors result in a low global threat of new entrants.

Threat of Substitutes

Below are the threats of substitute products of Porter’s Five Forces analysis of Hershey's: The chocolate confectionery industry offers highly differentiated products.

Within the confectionery industry, chocolate spreads, bars, and candies form its core offerings While other sweets and baked goods act as close substitutes, they do not fully replace chocolate products in flavor, texture, or consumer appeal These chocolate products are produced by major manufacturers, restaurants, and a range of local shops, delivering a wide spectrum of price points and varieties to suit different tastes and budgets.

Although substitute options are limited, customers can switch to alternative products without any switching costs, keeping the threat of substitutes at a moderate level for the Hershey Company’s industry This dynamic influences pricing strategies, product innovation, and competitive positioning within the chocolate and confectionery market in which Hershey operates.

Bargaining Power of Customers

In the Hershey's Porter Five Forces Analysis the bargaining power of the customers can be explained as:

The confectionery industry serves a very high volume of customers, creating a large and dynamic consumer market The global market size exceeds $200 billion, with leading players like Mars and Hershey’s recording worldwide sales in the tens of billions Despite the overall scale of sales, the average revenue per customer is relatively small, which means the bargaining power of individual buyers is comparatively low.

The confectionery industry is characterized by product differentiation in taste and composition, with some exclusive products that are highly popular among consumers, signaling low buyer bargaining power The customer base is broad, and although price sensitivity exists among low- and middle-income segments, the sheer volume of buyers dilutes their leverage Since there are no switching costs and numerous customers, buyers can exert some bargaining power in certain situations, but overall buyer power remains weak to moderate in the confectionery sector.

Bargaining Power of Suppliers

Following is the bargaining power of suppliers in the Porter’s Five Forces analysis of Hershey's:

Hershey’s sources its primary raw material, cocoa, from local farmers in West Africa, while other inputs come from a broad network of suppliers The large number of suppliers and their dispersed, low-concentration market give them relatively low bargaining power None of the suppliers offer exclusive or highly differentiated products, so they cannot leverage supply cuts to disrupt production As a result, Hershey’s can readily switch to alternative suppliers with minimal switching costs, supporting a resilient and flexible supply chain.

Hershey's weaknesses are the areas where the company can improve, and identifying them is a crucial step in strategic planning Strategy centers on making deliberate choices to address these weaknesses, using SWOT analysis to pinpoint where improvement will bolster Hershey's competitive advantage and strengthen its strategic positioning in the market.

 There are gaps in the product range sold by the company This lack of choice can give a new competitor a foothold in the market.

 Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

 Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel This can impact the long-term growth of Hershey

Hershey's workforce experiences a higher attrition rate compared with industry peers, which drives up costs as the company must invest more in training and development to replace and upskill departing employees and maintain productivity.

Although the product delivers solid sales, its marketing is lacking, with unclear market positioning and a poorly defined unique selling proposition Without a clear USP and consistent positioning, the brand is exposed to competitive attacks in the segment, underscoring the need to sharpen messaging, align marketing strategies, and communicate a compelling value proposition across all channels.

Financial planning is not being carried out properly or efficiently The company’s current asset ratio and liquidity ratios indicate that cash could be used more efficiently than it is at present, signaling opportunities to improve cash management, optimize liquidity, and enhance overall financial performance.

New technology enables Hershey to implement a differentiated pricing strategy in new markets, creating a competitive edge that aligns price with value This approach helps Hershey retain loyal customers through exceptional service while drawing in new buyers with compelling, value-oriented propositions.

 Lower inflation rate – The low inflation rate brings more stability in the market, enable credit at lower interest rate to the customers of Hershey.

Over the past few years, Hershey has invested substantial resources in its online platform, creating a new online sales channel and attracting new customers In the coming years, this digital investment can be leveraged to understand customers more deeply and tailor offerings to their needs through big data analytics, driving growth from online channels.

 Government green drive also opens an opportunity for procurement of Hershey products by the state as well as federal government contractors.

New environmental policies are reshaping the industry by creating a level playing field for all players, unlocking opportunities for innovation and competitive advantage For Hershey, these policies represent a strong opportunity to capitalize on its lead in new technology and to expand market share in the emerging product category.

Government agreements that adopt new technology standards and promote free trade have opened new markets for Hershey, providing a clear opportunity to enter emerging markets and boost profitability By complying with the latest technology standards, Hershey can streamline production, reduce trade barriers, and expand its distribution network across regions poised for growth This regulatory alignment lowers entry barriers and creates a favorable environment for sustained revenue growth, making expansion into these emerging markets a strategic driver for Hershey's profitability.

 The market development will lead to dilution of competitor’s advantage and enable Hershey to increase its competitiveness compare to the other competitors.

 Increasing trend toward isolationism in the economy can lead to similar reaction from other government thus negatively impacting the international sales.

Intense competition has attracted more entrants to the industry over the last two years as stable profitability drew players in, expanding the number of competitors This heightened competition has put downward pressure on profit margins and, consequently, on overall sales.

 The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Demand for highly profitable products follows a seasonal pattern, so peak-season conditions are particularly vulnerable to disruptions Even unlikely events during the peak season can impact the company's profitability in the short to medium term.

 Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Hershey

 Imitation of the counterfeit and low-quality product is also a threat to Hershey’s product especially in the emerging markets and low-income markets.

 Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors

Successful track record of developing new products

0.05 3 0.15 X It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

High level of 0.1 4 0.4 X the company with management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers Weaknesses

The marketing of the products left a lot to be desired

While the product demonstrates solid sales performance, its market positioning and unique selling proposition are not clearly defined, exposing it to competitive attacks in this segment To sustain growth and defend market share, the brand needs a crisp positioning statement and a differentiated USP that clearly communicates value to the target audience.