Assignment #4

Name:
Syeda Sijal Batool
FA17-BBA-165
Usman Tariq
FA17-BBA-173

Subject:
Strategic Management

Class:
BBA – 8D

Instructor:
Ma’am Shazia Bilal

1
 Hershey Company

Introduction
Hershey's is the biggest chocolate maker in United States, and it is proceeding to extend
everywhere on the world. What was once known as Hershey's Food Corporation is currently
known as the Hershey Company since 2005 ("The Hershey Company", 2009). The man behind
this organization is Milton Hershey, who was brought up in focal Pennsylvania, and this later got
home to the Hershey's organization. Which began as Crystal A Caramels, has extended to a
chocolate organization that incorporates items like milk chocolate, Cookies 'n' Creame, kisses,
Krackel, Mr. Goodbar, cocoa, spreads, and syrups. 1900 was the year Americans had the option
to appreciate a Hershey's Milk Chocolate Bar, and only a couple years after the fact, more
Hershey's items were created. ("Chocolate Products" 2015)

We've picked Hershey's Chocolate as the subject of our product chain since chocolate is one of
our #1 food sources. The site is separated into the six distinct exercises that occur during the time
spent making Hershey's chocolate. The six exercises incorporate the extraction of crude
materials, fabricating, transport, buy, conveyance, and removal.
Major Products of Hershey
Some of the major products of Hershey are:
o Hershey’s Kisses
Hershey's Kisses takes the milk chocolate formula developed by Hershey's and put it into
a teardrop shape form. These are one of the first products the Hershey's company ever put
out, releasing a few years after the original milk chocolate Hershey's Bar. Hershey's
Kisses became widely popular due to the simplicity and novelty of its form, as well as its
taste. Since its release many flavors and varieties have been featured, including a green
tea flavor Hershey's Kiss. There are many other different chocolate bars when it comes to
Hershey’s products.

2
 o Hershey’s Chocolate Syrup
In 1926, Milton Hershey introduced Hershey's Cocoa Syrup for commercial use by
bakers, restaurants and soda fountains. Salesmen recognized how popular Hershey's
Syrup was with people, so they requested syrup to sell to people for use at home. Then,
Hershey's Syrup was launched in a can and little has changed since then! As tastes have
changed, HERSHEY'S has introduced a variety of new flavors and also offers Lite Syrup
for people looking to reduce sugar and calories in their diets. Moreover, Hershey's
launched the first vitamin and mineral fortified chocolate syrup.
o Hershey’s Cocoa Powder
Hershey also launched their cocoa powder which can be used for baking and making
beverages. It is a natural, unsweetened cocoa powder and it delivers delicious flavors.
The 100% cacao, unsweetened powder is perfect for adding rich chocolaty flavor to all
kinds of desserts mixes, batters, and frostings.

Vision Statement
  “We not only offer the best merchandise at the best prices, but we’re always working to make
your shopping experience enjoyable.”

Mission Statement
“At the Hershey Company, we make chocolate brands that people love. Hershey’s mission
statement, bringing sweet moments of Hershey happiness to the world every day, summarizes
our company, our people, our past and future.

Goal
“The company has set a new goal to reduce packaging weight an additional 25 million pounds
by 2030 and is also targeting 100 percent of its plastic packaging to be recyclable, reusable or
compostable by 2030.

3
The Case
Operations
David West, named CEO, emphasized on marketing which in turn resulted in increased sales for
Hershey’s. They constantly promote the health benefits of dark chocolate, and also offers a line
of organic and natural chocolates under a different name, Dagoba. They also use national
holidays like Halloween and Valentine’s Day for a boost in their annual sales.

Their Contribution Towards the Society

At Hershey’s, social responsibility is taken very seriously. They are making efforts to reduce the
waste produced due to their plastic packaging, they are actively involved in a foundation that
works against child labor or forced labor in cocoa producing regions, and they also support
foundations that work for the betterment of the environment that includes nonchemical pest
management practices.

Competitors
Hershey’s major competition comes from the following brands:
o Nestle
Being one of the largest foods and beverage companies in the world.
o Cadbury
Being a confectionery and nonalcoholic beverage company.
o Mars
Being a private company that produces snack food, pet care, food, and drinks.

Findings – Formulating Stage

Internal Factor Evaluation (IFE) Matrix
The number 4 given in the rating column in the strength section means these are the greatest
strengths of Hershey and 3 being the minor strengths. In the weaknesses section, given number 1
as a rating means this is a major weakness at Hershey and 2 meaning it’s a minor weakness. The
total weighted score of IFE totals up to 2.57 which means that Hershey’s score is slightly above
average. Being above average means that Hershey Company has a strong internal position. To

4
achieve a higher weighted score and to make their internal position stronger, Hershey should
work on improving their weaknesses.

External Factor Evaluation (EFE) Matrix

Same evaluation process works for this matrix as well where 4 is greatest response and 1 is the
weakest or poor response. The total weighted score of Hershey in the EFE matrix is 2.28 which
is lower than the average score. This means that there are some external opportunities and threats
that the organization is not recognizing. Hershey must focus on them to maximize the
opportunities and minimize any threats.

Competitive Profile Matrix (CPM)

The success factors taken into consideration in CPM are weighted according to importance.
Hershey has higher scores in advertising, product quality, and customer loyalty. Nestlé scores
higher in price competitiveness, global expansion, and variety of product line. Mars, on the other
hand, dominates E-commerce and is very close in numbers with Hershey. The weighted score of
Hershey is 2.93, Nestlé is 2.75, and Mars is 3.0. These numbers do not mean that Hershey is not
as good as Mars. These numbers can be used to identify and focus on what Hershey needs to
improve to gain more market share and gain competitive advantage over their competitors in the
industry.

Recommendations
To keep up and even reinforce Hershey's situation in the candy parlor industry, we give the
following recommendations:
o Increase Advertisements
Increase joint publicizing to advertise their significant items Hershey can utilize joint
promoting to add benefit. This will likewise permit Hershey to quickly acquire clients
dependent on the trust shoppers may have with their colleague. Having a joint endeavor
is additionally helpful with regards to publicizing capital when they advance Hershey;
Hershey is taking advantage of that important venture. The extra income streams won't
need an enormous measure of extra exertion too.

5
 1. Hershey's Syrup/Ice Cream-Hershey should exploit their syrup market and add it to the
mainstream frozen yogurt market. Advancing these all together frozen yogurt technique
would be useful.
2. Hershey's Chocolate/Graham Crackers (s'mores) - Hershey could go family-situated
with this and advance s'mores by taking their premium chocolate and joining it with a
graham wafer and marshmallow organizations. During a cool summer night, why not
show a family around a pit fire making s'mores with Hershey chocolate?
3. Hershey's Syrup/Milk-There are various chocolate milks in the market; Hershey could
rival these contenders by publicizing their syrup related to milk to make chocolate milk.

o Maintain strong brand image to retain customers

Branding is a very powerful component in business. Brands should have a logo that is
easily identifiable by consumers. The consumers decide if they will buy a product or use
a service based on how they view the brand. The brand itself tells us or lets us imagine
how good or bad the product is even if we have never tasted it before! Hershey has
established a very strong brand image and has retained most of its customer over the
years as well as gained new ones. Hershey must continue to maintain their image and
uphold it to the highest integrity because once you lose it, it is hard to get it back.

o Expand product offerings to address wants/needs of health-conscious consumers

Organic line- Hershey's organic line includes Dagoba Organic; however, it is only
offered in specialty organic stores. By expanding into larger retail stores like Stop n' Shop
and other major grocers, the line will be more easily accessible to consumers seeking
organic products. They should use their strong R&D to determine the types of products
customers are looking for in organic sections.
100-calorie bar- While Hershey currently produces 100-calorie bars, they are available
in limited variety and locations. Hershey should consider expanding these lines to reach
more consumers

6
 o Have R&D department look into advertising and increasing market share outside
the U.S
Hershey should take advantage of the global market and all the possible profits outside
the United States. Hershey needs to keep getting their name out there even though it is
already well-known. Advertisements should center on their premium chocolate, along
with the new lines that come from research and development. To have Hershey's new
products become successful and known outside the U.S., they need to advertise which
would include commercials, online advertising, billboards, and print ads.

o Get finances under control, downsizing yet giving large CEO bonus
It is a very hard time right now in the United States and globally since we are in a
recession. Times are tough and a lot of people are unemployed. It would look bad for the
brand if the company was continuously giving the CEO and other executives extremely
high bonuses, so Hershey should be very careful and take the economy into consideration
when compensating employees.