Case Analysis Hersheys

Executive Summary

The Hershey Company is the leading American chocolate manufacturer and a global leader in chocolate goods. Hershey produces, markets and sales its products is over 50 countries. Hershey's products are recognized and loved all around the world by chocolate and candy lovers alike. The Hershey Company has a unique history like no other and has been existent for over a century. The company has experienced two world wars, a great depression, and 21 U.S presidents. Evidently, the Hershey Company has been tried and tested through time and is here to stay.

Milton Hershey is the founder the Hershey Foods. He built the company in order to manage an orphanage in 1909. Milton Hershey and his wife donated their entire personal fortune to the orphanage, The Milton Hershey School. Today, Hershey Foods cares for boys and girls through corporate profits for its School for Orphans (David, 2011, Page 11), "The school continues to operate in Hershey, and provides free education and residential services including meals and health care to almost 17,000 children in need, and still is be administered via The Hershey Trust Company" (David, 2011, Page C192).

Hershey does not only focus on its support for young boys and girls, it is also environmentally focused, "Hershey's role as an environmental steward is also evident that its plants use recycled water that is later purified for various landscaping projects" (David, 2011, Page C192). The Hershey Company has approximately 13,700 employees and its net sales exceed $4 billion. With revenues in excess of $ 5 billion, Hershey continues to produce chocolate and confectionery products in Hershey, Pennsylvania, and has recently expanded globally through joint ventures in China and India (David, 2011, Page C193).

Hershey has iconic brands that include: Hershey Kisses, Reese's, and the Hershey Bar. These brands are instantaneously recognized all around the world. Hershey also focuses on the more health conscious customer giving many health benefits with its natural and organic chocolate bars through the Dagoba brand and Flavonols, its dark chocolate brand (David, 2011, Page C193). Today Hershey products are sold in over 2 million retail outlets. The Hershey Company is clearly committed to continuing Milton Hershey's vision from so long ago.

Existing Mission, Objectives, and Strategies

The Hershey Company's mission is, "Bringing sweet moments of Hershey happiness to the world every day". The company explains and defines its objectives in the 2009 Corporate Social Responsibility (CSR) letter to stockholders:

Environment Community Workplace Marketplace

 Minimize impact while meeting functional requirements

 Sustainable Product Design

 Sustainable Sourcing

 Efficient Business Operations  Positively impact society and local communities where we live and work

 Corporate Philanthropy

 Contribution of Expertise

 Employee Giving &

 Volunteerism  Foster a desirable place to work

 Safety & Wellness at work

 Openness & Inclusiveness

 Employee Value

 Proposition  Engage in fair and ethical business dealings

 Integrity of Supply

 Consumer Well-Being

 Alignment with Customers

Hershey Foods is organized divisionally by geographic region. The divisions are the United States, Canada, Mexico, Brazil and Other (David, 2011, Page 224).

New Mission Statement

The Hershey Company mission is to continue with Milton Hershey's legacy and provide high-quality Hershey's products. We will continue our commitment to our community, our consumers and most of all, our children. We will be socially responsible and continue to conduct our business in an environmentally and sustainable manner.

Case Analysis

SWOT Analysis

Strength Weakness

1. Pay employees well and treats them well

2. Acquired Grupo Lorena, one of the leading confectionary companies in Mexico

3. Niche market appealing to the increasingly health conscious shopper.

4. Joint Venture with Lotte Confectionery Company and Godrej Beverages

1. Heavily dependent upon domestic markets

2. Higher energy and input costs resulted in increased costs

3. Joint Ventures are costing more than anticipated

4. Lower priced products has caused sales to falter

Opportunity Threats

1. Increased advertising budget

2. Consumers are becoming more health conscious as Hershey have and are delivering more healthy snacks

3. Expansion into the international market

4. Seasonal sales highly contribute to overall net sales

1. Sugar is controlled through government regulation

2. Cocoa prices have been on the rising trend and are still currently rising

3. Recently closed a PA plant resulting in 300 lost jobs, this affects employee morale in other Hershey plants

4. Competitors like Nestle are continually growing

Case Analysis

Space Matrix

Financial Stability (FS) Environmental Stability (ES)

Return on Investment 2 Unemployment -5

Leverage 2 Technological Changes -3

Liquidity 5 Price