Individual assignment topic analysing the hershey organization

I would like to express my special thanks of gratitude to my teacher as well as our principal who gave me the golden opportunity to do this wonderful project on the topic Analysing Organ

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

Individual Assignment

Topic: Analysing the Hershey Organization

Student Name: Pham Tran Dang Khoa

Student ID: 1952787

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2021- 2022

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approach in students which is an important factor of strategic issues management The course is divided into four semesters, each for a period of six months

The course teaches about how managers must employ the formal and informal relationships that exist between various organisations in an industry, originate solutions for various problems encountered by an organisation, and effectively formulate and implement an organization's key strategies, the results of which shapes the structure and functioning of an organization.

Strategic management trains the eligible candidates in developing functional and managerial 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 other domains and fields including business administration, finance and marketing, risk management, negotiation, statistics and human resource There are various universities and colleges for business and economics which offer strategic management as specialization or a concentration track for a business management degree

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II Acknowledgement

My name is Pham Tran Dang Khoa, a member in class CC02, course: Strategy Managements, leading by prof Lai Van Tai I am over helmed in all humbleness and gratefulness to acknowledge my depth to all those who have helped me to put these ideas, 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 our principal who gave me the golden opportunity to do this wonderful project on the topic Analysing Organization and I choose Hershey Organization to give the best analysis, which also helped me in doing a lot of Research and I came to know more about 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

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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

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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

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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-based confections Hershey’s Milk Chocolate, in its brown-and-silver wrapper, was perhaps the 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 After seeing German-made chocolate-processing machinery at the World’s Columbian Exposition 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 and two pasta businesses In recognition of its diversification, the company was renamed Hershey 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 company responded to increased competition—most notably from Mars, Inc.—by advertising to consumers 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 very first candy bar Today, Hershey’s portfolio of brands has expanded beyond the beloved and iconic HERSHEY’S Milk Chocolate Bar.

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

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 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.

 2008: $5 Billion in sales

 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

2 Situation of Hershey organization in nowadays

In August 2021, the Hershey Company established a new health & safety policy requiring full vaccination for all corporate employees working in our 19E corporate office, Tech Centre, U.S commercial sales offices, customer teams, Hershey's

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October 4, 2021 To support this, the company sponsored multiple vaccination clinics and allowed employees to seek accommodations for religious or medical reasons The company 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 Over recent weeks, separations for a small number of teammates, less than two percent of our corporate and commercial teams who did not get vaccinated, have occurred.

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

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

to evolve as needs change throughout the pandemic.

Hershey employees and their families who experience severe economic hardship as a result 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.” The company aim at delivering the best services to its customers at affordable prices Hershey is not only committed to offering healthy products but also changing the perceptions that people have about chocolate brands being unhealthy (Hershey Company, 2019).

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

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

3.2 Mission Statement

Hershey companies corporate mission statement states, “Proceeding with Milton Hershey’s heritage of responsibility regarding shoppers, group and youngsters, we give high calibre HERSHEY’S items while directing our business in a socially mindful 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 method resolves our problems quickly and helps us learn more To do so, we proactively connect with our colleagues and resources when seeking an answer We always make sure 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 Our approach towards collaboration includes the desire to learn from others, value their opinions, and appreciate their skills and expertise Irrespective of having different

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perspectives, we listen to each other and voice our opinions Once a decision has been made, 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 diverse perspectives, celebrate successes and share learnings from our own mistakes We also keep 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 the existing norms and conventions of the system We take this thoughtful approach to ponder around questions and seek inspiration from the world around us We then put the gathered data to a resourceful use.

3.3.5 Innovate

We consistently urge everyone to suggest new and unconventional ideas and approaches At HERSHEY’S, one can show discontent towards an existing norm and bring 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 values include housing an atmosphere where people feel empowered and encouraged to create a plethora of new possibilities We also believe in speaking with conviction and listen closely to our co-workers This allows us to pursue a clear vision for one and all.

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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 numerous strengths that enable it to thrive in the market place These strengths not only help it to protect 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 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.

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

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

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4.1.2 Weaknesses Analysis

Weakness are the areas where Hershey can improve upon Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

 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.

 Limited success outside core business – Even though Hershey is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present 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

 High attrition rate in work force – compare to other organizations in the industry Hershey has a higher attrition rate and have to spend a lot more compare 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 is not clearly defined which can lead to the attacks in this segment from the competitors.

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

4.1.3 Opportunities Analysis

 The new technology provides an opportunity to Hershey to practices differentiated pricing strategy in the new market It will enable the firm to maintain its loyal customers with great service and lure new customers through other value-oriented propositions.

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 Lower inflation rate – 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 – Over the past few years the company has invested vast sum of money into the online platform This investment has opened new sales channel for Hershey In the next few years, the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

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

 New environmental policies – The new opportunities will create a level playing field for all the players in the industry It represents a great opportunity for Hershey 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 provided Hershey an opportunity to enter a new emerging market.

 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.

4.1.4 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.

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 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

4.2 SFAS Analysis

Key Strategic Factors

Weight Rating Weighted

Score

Strengths Successful track record of developing new products

Reliable suppliers

of reliable supplier

of raw material thus enabling the

company to overcome any supply chain bottlenecks.

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Tiêu đề	Analysing the Hershey Organization
Tác giả	Pham Tran Dang Khoa
Người hướng dẫn	Prof. Lai Van Tai
Trường học	Ho Chi Minh University of Technology
Chuyên ngành	Strategic Management
Thể loại	Individual Assignment
Năm xuất bản	2021-2022
Thành phố	Ho Chi Minh City

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