Topic analysing the hershey organization

Table of ContentsI Introduction about Strategic Managements course...ii II Acknowledgement...iii Table of Contents...iv 1 Introduction about the company...1 1.1 Overview about Hershey...

Ho Chi Minh University of Technology

School of Industrial Management

Strategic Managements Semester 212 – Class: CC02 Lecturer: Prof Lai Van Tai

Topic: Analysing the Hershey Organization

Student Name: Pham Tran Dang Khoa

Student ID: 1952787

Ho Chi Minh city, Vietnam

I Introduction about Strategic Managements course

Strategic Management is a postgraduate course of two-years involving advancedlessons in psychology, sociology, and economics with the aim to develop an analyticalapproach in students which is an important factor of strategic issues management Thecourse is divided into four semesters, each for a period of six months

The course teaches about how managers must employ the formal and informalrelationships that exist between various organisations in an industry, originatesolutions for various problems encountered by an organisation, and effectivelyformulate and implement an organization's key strategies, the results of which shapesthe structure and functioning of an organization

Strategic management trains the eligible candidates in developing functional andmanagerial skills, building relationships with organisations, providing the recruitments

in corporate management and strategy along with providing a platform for students,teachers, and industry experts to exchange leadership and management concepts

A strategic management student is required to use his/her knowledge from otherdomains and fields including business administration, finance and marketing, riskmanagement, negotiation, statistics and human resource There are various universitiesand colleges for business and economics which offer strategic management asspecialization or a concentration track for a business management degree

II Acknowledgement

My name is Pham Tran Dang Khoa, a member in class CC02, course: StrategyManagements, leading by prof Lai Van Tai I am over helmed in all humbleness andgratefulness to acknowledge my depth to all those who have helped me to put theseideas, well above the level of simplicity and into something concrete

I would like to express my special thanks of gratitude to my teacher as well as ourprincipal who gave me the golden opportunity to do this wonderful project on thetopic Analysing Organization and I choose Hershey Organization to give the bestanalysis, which also helped me in doing a lot of Research and I came to know moreabout so many new things I am really thankful to them

Thank you very much, prof for what you have taught to us in this semester

Best regards,

Pham Tran Dang Khoa – 1952787

Table of Contents

I Introduction about Strategic Managements course ii

II Acknowledgement iii

Table of Contents iv

1 Introduction about the company 1

1.1 Overview about Hershey 1

1.2 Hershey History – A History of Goodness 1

1.3 Hershey Products 2

2 Situation of Hershey organization in nowadays 2

3 Hershey’s Vision/ Mission/ Core Values 3

3.1 Vision statement 3

3.2 Mission Statement 4

3.3 Core Values 4

3.3.1 Deliver 4

3.3.2 Collaborate 4

3.3.3 Develop 5

3.3.4 Question 5

3.3.5 Innovate 5

3.3.6 Inspire 5

4 Hershey’s SWOT analysis (SFAS, IFAS, EFAS, CPM matrix) 5

4.1 SWOT analysis 5

4.1.1 Strengths Analysis 5

4.1.2 Weaknesses Analysis 6

4.1.3 Opportunities Analysis 7

4.1.4 Threats Analysis 8

4.2 SFAS Analysis 9

4.3 IFAS – EFAS Analysis 12

5 Hershey Five Forces Analysis 12

5.1 Threat of New Entrants 13

5.2 Threat of Substitutes 13

5.3 Bargaining Power of Customers 14

5.4 Bargaining Power of Suppliers 14

5.5 Competitive Rivalry 15

6 The Hershey Company’s Competitors 15

6.1 CPM matrix 16

7 Hershey’s Strategic Formulation 17

7.1 Corporate level strategy 17

BCG Matrix 18

7.2 Business level strategy 21

8 Conclusion 22

III Appendix 23

IV Reference list 24

1 Introduction about the company

1.1 Overview about Hershey

Hershey Company, also known as (1894–1927) Hershey Chocolate Co., (1927–68) Hershey Chocolate Corporation, and (1968–2005) Hershey Foods Corporation,American manufacturer of food products, chiefly chocolate and sugar-basedconfections Hershey’s Milk Chocolate, in its brown-and-silver wrapper, was perhapsthe best-known American candy bar of the 20th century Company headquarters are

in Hershey, Pennsylvania

The Hershey Company traces its origins to the 1880s, when Milton S.Hershey founded the Lancaster Caramel Company in Lancaster, Pennsylvania Afterseeing German-made chocolate-processing machinery at the World’s ColumbianExposition of 1893 in Chicago, Hershey decided to go into the chocolate business During the 1960s Hershey bought the manufacturer of Reese’s Peanut Butter Cups andtwo pasta businesses In recognition of its diversification, the company was renamedHershey Foods Corporation in 1968 Two notable changes came shortly afterward.After many decades at 5 cents, the price of the standard milk chocolate bar went up to

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

1.2 Hershey History – A History of Goodness

Milton Hershey’s love for confection started at a young age and flourished when

he established The Hershey Chocolate Company in 1894 By 1900, we sold our veryfirst candy bar Today, Hershey’s portfolio of brands has expanded beyond the belovedand iconic HERSHEY’S Milk Chocolate Bar

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

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

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

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

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

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

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

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

 2008: $5 Billion in sales

 2018: Michele Buck becomes CEO: first female CEO

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

2 Situation of Hershey organization in nowadays

In August 2021, the Hershey Company established a new health & safety policyrequiring full vaccination for all corporate employees working in our 19E corporateoffice, Tech Centre, U.S commercial sales offices, customer teams, Hershey'sChocolate World Salaried Employees, Amplify, One Brands and Lily’s offices by

October 4, 2021 To support this, the company sponsored multiple vaccination clinicsand allowed employees to seek accommodations for religious or medical reasons Thecompany has engaged in an interactive process with our employees to evaluate when

an accommodation is needed

Nearly 98 percent of the teams covered by this policy have become vaccinated Overrecent weeks, separations for a small number of teammates, less than two percent ofour corporate and commercial teams who did not get vaccinated, have occurred

Our manufacturing and retail employees have worked safely on the front lines sincethe start of the pandemic with heightened health and safety protocols, includingmasks, physical distancing, sanitizing and on-site vaccination clinics

To date, The Hershey Company has committed over $2 million in cash and productdonations to support COVID-19 response efforts around the world Our corporategiving team is working closely with our community non-profit partners to ensure theyare supported during this time Our support and community response efforts continue

to evolve as needs change throughout the pandemic

Additionally, our Hershey Company Employees 1st

Fund is actively supportingHershey employees and their families who experience severe economic hardship as aresult of this situation

3 Hershey’s Vision/ Mission/ Core Values

3.1 Vision statement

Hershey’s vision is “We not only offer the best merchandise at the best prices,but we’re always working to make your shopping experience enjoyable.” Thecompany aim at delivering the best services to its customers at affordable prices.Hershey is not only committed to offering healthy products but also changing theperceptions that people have about chocolate brands being unhealthy (HersheyCompany, 2019)

The key components of the vision statement are: Offer the best merchandise at thebest prices, Make your shopping experience enjoyable The “offer best merchandise atthe best prices” component focuses on all the customers and potential consumers ofthe Hershey products The company has operations in more than 90 countries, andthey aim to expand the services by delivering the products to a price that everyone canafford Their products are affordable, which makes them popular amongst thecorporate and the customers.

“Make your shopping experience enjoyable” is focused on making sure that customersget value for their money In this component, Hershey aims at ensuring the customersget the best products at competitive and affordable prices The Hershey Company hasalso invested in supporting the underprivileged such as setting up Hershey TrustCompany to help disadvantaged children

3.2 Mission Statement

Hershey companies corporate mission statement states, “Proceeding with MiltonHershey’s heritage of responsibility regarding shoppers, group and youngsters, wegive high calibre HERSHEY’S items while directing our business in a sociallymindful and earth practical way.”

3.3 Core Values

3.3.1 Deliver

The idea is to seek solutions by putting our prototypes to test This methodresolves our problems quickly and helps us learn more To do so, we proactivelyconnect with our colleagues and resources when seeking an answer We always makesure that our decisions positively impact our community and are acted upon sooner,rather than later

3.3.2 Collaborate

We believe in accomplishing together by building global partnerships Ourapproach towards collaboration includes the desire to learn from others, value theiropinions, and appreciate their skills and expertise Irrespective of having different

perspectives, we listen to each other and voice our opinions Once a decision has beenmade, we commit ourselves to achieve the goal.

3.3.3 Develop

At HERSHEY’S, we encourage everyone to learn and keep growing We nurture

an environment where everyone is allowed to experiment with ideas, invite diverseperspectives, celebrate successes and share learnings from our own mistakes We alsokeep an open window of feedback that will help us learn from others

3.3.4 Question

We encourage everyone to question ideas, keeping in mind the processes,problems, and opportunities Everyone is welcomed to challenge or improve theexisting norms and conventions of the system We take this thoughtful approach toponder around questions and seek inspiration from the world around us We then putthe gathered data to a resourceful use

3.3.5 Innovate

We consistently urge everyone to suggest new and unconventional ideas andapproaches At HERSHEY’S, one can show discontent towards an existing norm andbring fresh perspectives to ask, “How can we change or innovate…” And thus,exchange new insights on how to open the door to new possibilities

3.3.6 Inspire

We thrive on our individual passions and also get inspired by others Our valuesinclude housing an atmosphere where people feel empowered and encouraged tocreate a plethora of new possibilities We also believe in speaking with conviction andlisten closely to our co-workers This allows us to pursue a clear vision for one and all

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

4.1 SWOT analysis

4.1.1 Strengths Analysis

As one of the leading organizations in its industry, Hershey has numerousstrengths that enable it to thrive in the market place These strengths not only help it toprotect the market share in existing markets but also help in penetrating new 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 thusenabling the company to overcome any supply chain bottlenecks

 Automation of activities brought consistency of quality to Hershey productsand has enabled the company to scale up and scale down based on the demandconditions in the market

 High level of customer satisfaction – the company with its dedicated customerrelationship management department has able to achieve a high level ofcustomer satisfaction among present customers and good brand equity amongthe potential customers

 Strong dealer community – It has built a culture among distributor & dealerswhere the dealers not only promote company’s products but also invest intraining the sales team to explain to the customer how he/she can extract themaximum benefits out of the products

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

 Good Returns on Capital Expenditure – Hershey is relatively successful atexecution of new projects and generated good returns on capital expenditure bybuilding new revenue streams

4.1.2 Weaknesses Analysis

Weakness are the areas where Hershey can improve upon Strategy is aboutmaking choices and weakness are the areas where a company can improve usingSWOT analysis and build on its competitive advantage and strategic positioning

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

 Limited success outside core business – Even though Hershey is one of theleading organizations in its industry it has faced challenges in moving to otherproduct segments with its present culture

 Organization structure is only compatible with present business model thuslimiting expansion in adjacent product segments

 Days inventory is high compare to the competitors – making the company raisemore capital to invest in the channel This can impact the long-term growth ofHershey

 High attrition rate in work force – compare to other organizations in theindustry Hershey has a higher attrition rate and have to spend a lot morecompare to its competitors on training and development of its employees

 The marketing of the products left a lot to be desired Even though the product

is a success in terms of sale but its positioning and unique selling proposition isnot clearly defined which can lead to the attacks in this segment from thecompetitors

 Financial planning is not done properly and efficiently The current asset ratioand liquid asset ratios suggest that the company can use the cash moreefficiently than what it is doing at present

4.1.3 Opportunities Analysis

 The new technology provides an opportunity to Hershey to practicesdifferentiated pricing strategy in the new market It will enable the firm tomaintain its loyal customers with great service and lure new customers throughother value-oriented propositions

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

 New customers from online channel – Over the past few years the company hasinvested vast sum of money into the online platform This investment hasopened new sales channel for Hershey In the next few years, the company canleverage this opportunity by knowing its customer better and serving theirneeds using big data analytics

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

 New environmental policies – The new opportunities will create a level playingfield for all the players in the industry It represents a great opportunity forHershey to drive home its advantage in new technology and gain market share

in the new product category

 Opening up of new markets because of government agreement – the adoption

of new technology standard and government free trade agreement has providedHershey an opportunity to enter a new emerging market

 The new taxation policy can significantly impact the way of doing business andcan open new opportunity for established players such as Hershey to increaseits profitability

 The market development will lead to dilution of competitor’s advantage andenable Hershey to increase its competitiveness compare to the othercompetitors

4.1.4 Threats Analysis

 Increasing trend toward isolationism in the economy can lead to similarreaction from other government thus negatively impacting the internationalsales

 Intense competition – Stable profitability has increased the number of players

in the industry over last two years which has put downward pressure on notonly profitability but also on overall sales

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

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

 Rising pay level especially movements such as $15 an hour and increasingprices 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’sproduct 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