Discussion

Module 5 Discussion

You will begin by creating a SWOT and a BCG matrix. For the SWOT, follow Steps 1-2 of the Learning Exercise in your text. Then, prepare a SWOT Matrix for Hershey’s Company. For the BCG, use the information in the Learning Exercise in your text to prepare a BCG matrix for Hershey locating each division where you believe it represents its position relative to market share and growth. When complete with both exercises, write a short narrative (one page or less, double space) of your key conclusions from (1) your SWOT analysis of Hershey, (2) your BCG work on Hershey. In addition, include your conclusions on the Hershey’s Company as a result of its position in the BCG ​and​ the results of SWOT. Make clear recommendations for Hershey’s Company based on integrating the work from the above models. S​TRENGTHS W​EAKNESSES 1)Hershey’s Company is the

largest chocolate producer in North America 2) Hershey acquired Shanghai Golden Monkey in China 3) Hershey acquired Krave Pure Foods, Inc. 4) Hershey created an assembly line that lowered the unit cost for chocolate 5) Hershey has 11 board members serving annual terms 6) Hershey ranks high in improving the communities in which it operates 7) Hershey reduced its waste through company initiatives

1)The company derives 85 percent of its revenue from the United States

2)3-D printing slowly produces confectionary options but have high cost factors

3)Hershey has low global expansion

4)Late-mover in the healthy snack business

5)Certain Hershey products contain high-fructose corn syrup and artificial flavors

6)Hershey does not report sales and income by product category

O​PPORTUNITIES SO Strategies WO Strategies 1)Limited product line options compared to competitors 2)Product exposure into foreign markets 3)Chocolate sales in the United States are increasing about 3 percent annually 4)Farmers are switching to more profitable crops 5)C​ompanies are beginning to remove unnatural and

1)Introduce new and limited-edition chocolate lines (S3, O1) 2)Acquire more international snack companies (S2, O2)

1) Invest in chocolate farmers (W3, O4) 2)Increase research and development for healthy snack options (W4, O5)

unhealthy ingredients from food products T​HREATS ST Strategies WT Strategies 1)G​rowing demand for healthier food options 2)C​ocoa is more difficult to produce and cocoa prices are expected to rise 3)C​ocoa trees task as many as 10 years to mature 4) Obesity is a major problem among the world’s population

1)Establish a healthy eating program (S6, T4) 2) Contribute part of proceeds from purchases to growing cocoa trees (S7, T2)

1)Separate revenue based on categories to have a better understanding of what product is Hershey most successful for (W6, T1)

Stars

II

North America Market

Question Marks I

International Market Cash Cows

III Dogs IV

Hershey continues to strive in the chocolate industry because of their brand awareness, brand image, and their first mover’s advantage when they made chocolate affordable for most consumers instead of just the rich. However, there is a lot of room for growth when it comes to changing the company image and increasing sales through international growth. It is essential for Hershey to invest in cocoa farmers because as the price of cocoa continues to rise, farmers are switching the types of crops they prefer to produce. If Hershey can get ahead and show farmers that they are worth the investment, Hershey may not have to decrease the amount of cocoa used in their products. This strategy will help with Hershey’s other necessary plan to increase health care awareness by investing in more healthier snack options.

Hershey currently has a solid presence in the United States but a lot of room for growth in its international market. The North American market is still considered to be in the stars phase because Hershey has had a long run of growth and profitability within the United States, whereas Hershey’s international market has room for growth (David & David, 2016). The chocolate and confectionary business is still considered a high growth industry and Hershey’s market share is very low in foreign markets.

Reference

David, F. R., & David, F. R. (2016). ​Strategic management: A competitive advantage approach, concepts, global edition​ (16th ed.) [QSR-PRO].