Hershey Company Essay

AbstractThe Hershey corporation, known until April 2005 as the Hershey Foods Corporation and comm sole(prenominal) called Hersheys, is the largest coffee tree maker in northmost the States. Its headquarters atomic number 18 in Hershey, Pennsylvania, which is also home to Hersheys Chocolate World. It was founded by Milton S. Hershey in 1894 as the Hershey Chocolate fellowship, a subsidiary of his Lancaster Caramel Company. Hersheys products are sold in about sixty countries worldwide. In addition, Hershey is a member of the World Cocoa Foundation. The company has been topped to 384, compa ablaze(p) with the previous rank 404, in 2013 (CNN, 2013). This paper is going to show the companys transnational environment, exams the strengths, weaknesses, opportunities and treats. After analyzing the strategic management for going abroad and competitive advantages, the author concluded that how the Hershey Company successes to offer the whole worlds happiness and what else shadow be dow n to move forward.Introduction to the Hershey CompanyThe Hershey Company is the largest java and confectionary product manufacturer in the wedlock America Region. The Hershey Company Headquarters is located in Hershey, Pennsylvania founded by Milton Hershey. Milton S. Hershey in the late 1800s and the company has been a Brobdingnagian remark of growth for Hershey, Derry Township (THEHERSHEYCOMPANY, 2011). As the new millennium begins, The Hershey Company continues to introduce new products frequently and take advantage of growth opportunities through acquisitions. HERSHEYS products are known and enjoyed the world over. In fact, the company market, swap and distribute our products in approximately 70 countries. The Hershey Companys key market includes unify States, Canada, Mexico, brazil-nut tree and China. As of year-end 2011, Hershey employed 13,800 wad and had consolidated net sales of $6.08 billion (THEHERSHEYCOMPANY, 2011). Hersheys slogan is bringing sweet moments of He rshey happiness to the world each day. Below are some of the Hershey Companys popular brands Hersheys Chocolate BarAlmond JoyKit KatHersheys KissesReesesMilk DudsMr. Good barWhoppersHersheys MissionOur mission is to be a localiseed viands company in North America and selected international markets and a leader in e real aspect of our business. Our cultivation is to enhance our First position in the North Ameri idler confectionery market, be the leader in U.S. umber-related grocery products, and to name leadership positions in selected international markets (THEHERSHEYCOMPANY, 2011). Hersheys Slogan is Bringing sweet moments of Hershey happiness to the world every day. To the stakeholders, this operator delivering choice consumer-driven confectionery experiences for all occasions to customers winning with an aligned and empowered organization while having fun to employees building collaborative relationships for profitable growth with customers, suppliers and partners creating sustainable value for administerholders honoring our heritage through continued commitment to making a positive difference on communities (THEHERSHEYCOMPANY, 2011).CustomersFull-time sales representatives and food brokers sell our products to our customers. Hersheys customers are mainly wholesale distributors, chain grocery stores, and mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, department stores and internal food stores (THEHERSHEYCOMPANY, 2011).International Business Environment Analysis SWOT Analysis 1. StrengthsHistory and market percent. The Hershey company exports to 60 different countries include Largest Distribution cyberspace across North Americanterritory. According to market research firm Euromonitor International, the global confectionery market sits at $160 billion, and has grown at 5% annually the past five years. Meanwhile, the chocolate market in the United States is largely a t wo-horse race between Hershey (43%) and private company Mars, Inc. (31%). The next-largest competitor, Nestle, holds only a 6% U.S. market ploughshare (Markman, 2012). Various Products and Attractions. The Hershey has 120 years history of chocolate business. The Hershey Company develop various products such chocolate bars and bags, licorice and sugar dulcify, boxed chocolate, mints and gum, and specialized nutritional products. The Hershey Company has a number of Hersheys Chocolate World attractions that translate consumers with the Hershey experience through interactive sell entertainment and merchandise.Key store locations include Hershey, Pennsylvania Times Square in New York City The Magnificent Mile, Chicago Niagara Falls, Canada Shanghai, China Singapore and Dubai, United Arab Emirates (THEHERSHEYCOMPANY, 2011). Professional Training for Employees. Hershey provides a variety of training and development opportunities that encourage their employees personal and professional development. Hershey University is an educational program that tailors its curriculum to Hersheys evolving business environment, go both class dwell instruction and online courses. In addition, when specifically relevant to their jobs, employees may be entitled to tuition reimbursement for associates, bachelors and masters degrees at accredited institutions. Also, in July 2011 we launched CocoaLink, a first-of-its kind program that uses mobile technology to deliver practicaland criticalagricultural and social training to pastoral cocoa farmers (THEHERSHEYCOMPANY, 2011). Charity and social responsibility. Hershey is an exemplary organization in terms of business ethics and socialresponsibility a significant part of Hershey Foods profits go toward operatingthe Milton Hershey School for Orphaned Children.2. WeaknessesUnhealthy Nutritional Content. Compare with Nestle and Mars chocolate bars, Hersheys chocolate high in sugar. And Hersheys chocolate contain more than than twice as o ften as some of the others (ACALORIECOUNTER, 2013). Unhealthy nutritional content leave behind affect customers choices of Hershey.Price inflation. Since 2008, Hershey Co. announced that it was genteelness its wholesale candy prices by 11%. This is the second price jump for them this year, in January they raised prices by 13% for select products in their line as well (ACALORIECOUNTER, 2013). In 2011, The Hershey Company says it is raising wholesale prices by 9.7% on most of its candy products. Due to price inflation of milk and sugar, the price of Hersheys chocolate keeps rising which lower Hersheys chocolates competitive ability among its competitors. Low international market share of chocolate confectionary indus yield. Hersheys global market share in the chocolate confectionary industry in only 10 percent, lowest among its competitors3. OpportunitiesHuge Consume Market. 81% of households consume chocolate candy. China and India are huge untapped markets. Malaysia, Indonesia, Vi etnam, and Thailand also are untapped, So, Hershey has the opportunity to gain a foothold in those Countries (THEHERSHEYCOMPANY, 2011). Environmentally Safety Products. There is another opportunity for Hershey to develop environmentally safe products and packages, reducing industrial waste, recycling, and establishing an environmental audit process are strategies that could benefit Hershey. Non-chocolate candies Market. Another opportunity is that Hershey diversifies more into non-chocolate candies because that segment is growing most speedily in contradictory countries like U.S &U.K. Anniversary and Festivals. The Hersheys Company should take advantage of the holidays such as Valentines Day and anniversary. For example, this years Valentines Day, MM let customers customized their chocolate online. Customers can add their pictures on MM chocolates. And they can pick up the color of chocolates their like to combine a gift box. This diversity attracted a lot of customers.Charity & Foundations. As we all know, charity and foundations will bring great reputations to corporations. They can help corporations build positive brand images which will increase brands sales.4. ThreatsEmerging competitors. The main competitors of Hershey Foods are Mars and Nestle. Mars is already a threat for Hershey, because Mars has a stronger presence than Hershey in Europe, Asia, Mexico, and Japan. At the same time,there are also many new competitors are entering chocolate market such as Whole foods chocolate. Compare with Hershey, Mars, and Nestle, Whole Foods chocolate aim at healthy chocolates. They provide choice to the customer wants low fast and constitutional chocolate. 25 percent of Nestls revenues and profits come from coffee, and adverse economic occurrences in South America, particularly Brazil, affect the company. Nestle plans to continue to play to its strengths, international markets outside the United States, to combat Hershey. Social Changes about Healthy Foods. Wit h the development of Society and Technology, people more and more focus their health and nutrition. We can call back more and more thoroughgoing chocolate manufacture appearing. Doctors and Researchers also have studies prove that chocolates are helpful to prevent heart diseases. Thus, more and more customers submit healthy chocolates such as dark chocolates and organic chocolates.Steady price increase of milk and sugar. The escalation of prices of the main ingredients such as cocoa, milk and sugar has hale companies to increase prices.Strategic Management Factors for Going GlobalNear the end of 2010, Hersheys entered into a deal with Wal-Mart (known as Asda in the UK) to sell Hersheys products in Europe. Hersheys has never been sold in the U.K. However, Hersheys will have to modify their products in order to do so. Hersheys uses genetically modified ingredients in the U.S. and Asda does not sell products that include GM ingredients (Glaberson, 2010). Obviously, Hershey want to enter global market needs to adjust their ingredients at first. The ingredients use for North America doesnt mean it fit European or Asian Market. These repairments have been based on understanding local culture. Whats more, Hershey should pay more attentions on their chocolate packages. They develop different series packages of chocolate in different countries. Hersheys white and brown can be market as classic series. They can add more colorful packages to attract childrens attentions. For example, in China, Red is a strong color which means wealth and happiness. Hershey can make red packages chocolates in China. In a shot, Hershey want to expand internationally, they must integrate into each countrys culture.As a global brand, Hersheys try to cover all people in different ages and status. However, from its advertisements, its major customers are children, teenagers and young generations. Actually, most of these groups of customers havent economic capability to buy chocolate thems elves. Adults and parents usually pay money for them. Thus, healthy ingredients are very important factors may affect parents willingness to pay chocolates to their children. Especially in European and Asian, parents are very focus on childrens nutrition.Hersheys products are mainly focus on young generations. However, if Hershey wants to expand international, Hershey needs more products are focus on household and adults. For example, Hershey can develop chocolate looking coffee drinks, chocolate sauces, and chocolate gums.Now, the major of Hershey employees are from North United. To entering foreign market, Hershey has to hire more foreign employees and build international police squad. Hersheys designers should know more about foreign culture. They can not only insistent of their American style. Even executives of Hersheys should have some international backgrounds and experiences. Hershey can hire some executives who have international background and experiences. At the same ti me, Hershey can send their design team to the county they want entering. Having better understanding of local culture, Hershey can have better design and marketing methods to meet local customers needs.Hershey should has its online shop. As far as now, Hershey only have official website of 8 countries. As show on the picture below, they are the United States, Canada, Mexico, Brazil, China, India, Korea, and Japan. In todays business world, online shopping is comme il faut a tendency. A large amount of households shop online daily. Hershey should build their official online store like its competitor Mars. Hershey can sell both fixture and customized chocolates online (THEHERSHEYCOMPANY, 2011). .Competitive Advantages AnalysisThe chocolate market share is increasing globally. Customer loyalty is competitively lower than other industry. Websites are increasing in quality and ease for all users. HERSHEYS offers many unique products and services to many different kinds of customers by u sing their official websites. Whats more, Hershey has great partnership with North America wholesalers and retailers such as Wal-Mart, Sams club, and Walgreen. Hershey has advantages on high domestic market shares. 43% of US domestic chocolate market share provide Hersheys stable sales. Thus, Hershey should make its development base on steady their US market (CNN, 2011).CommunityWe make donations of cash and products in countries across the globe where we have a presence. For example, last week I shopped at Walgreen, the cashier asked me if I want to donate Hershey chocolate to help US army. I choose yes, and most customers donate a Hershey chocolate bar which cost them 50cent. Hershey is willing to help community and does their social responsibility. Whats more, Hershey encourages and supports the involvement of our employees in a wide range of community-improvement activities.WorkplaceAs a global corporation, Hershey ensures a safe workplace. Safety performance is a company priori ty, and Hersheys overarching safety goal is to consistently achieve best-in-class safety performance (THEHERSHEYCOMPANY, 2011). The Hershey Company has a long history of promoting health and wellness for its employees, their families and the community. Hershey offers personal training and massage and fitness room at office locations. Hershey engages employees to get fit and stay well.EnvironmentHershey increase use of sustainable packaging since 2009. Now they are working on a process to define opportunities to reduce the amount of materials they use by for example, optimizing seal sizes and implementing new technologies, and to identify and test sustainable packaging alternatives (Glaberson, 2010).All of these factors help Hershey build a great reputation in North America. Hershey has already get success at North America market. Thus, its time forHershey focus on expanding its foreign market.ConclusionCulture today is heavily focused on personnel health. In the past few decades, pe ople have become much more aware of the various factors that negatively affect their health and work hard to avoid them. As a general rule, chocolate and other candy are viewed as an unhealthy snack. Therefore, Hershey needs to continue to expand and market healthy products in order to gain a greater market share for example, low calories, low fat chocolates bars. Moreover, Hershey can put focus on dark chocolate which is popular among ladies (Jones, 2010). Second, Hershey should pay more attentions on its gums and chocolate flavor coffee drinks. For example, In Asia, chocolate market is competitively mature. There are already many local brands. Thus, to better entering Asian Market, Hershey only focus on its chocolate products is not enough.To expand global market, Hershey has to invest in advertisement. Whats more, Hershey can keep working on their charity activities, and foundations. To help people from all over the world, Hershey can set up foundations in different countries.Pri ce and quality are two keys determine the success of entering foreign markets. Hershey should still keep its affordable price with best quality. Hershey can corporate with local chocolate maker with manufacture and packaging to reduce their cost.The hierarchy of Hershey Company should be more international. Hershey needs to hire more designers, executives, and employees with international background or experiences.The commercialization of many holidays is continuing to expand and the popularity of gifts for these holidays is also increasing. Hershey can provide holiday products in outlets also their website (i.e., Hallmark, Barnes and Noble). These Traditional holidays (i.e., Christmas, Valentines Day, Mothers Day, and Halloween) allows Hershey to optimize the importance of their specialty gift products. By providing specialized gift products,Hershey can increase their sales and expand quickly in foreign market.Finally, Hershey can design different product lines. For example, Hershe y can use its source entering organic chocolate market. Hersheys organic chocolate faces to European, developed countries which their cultures are more focus organic food. The premium product line can help improve Hersheys brand images. Also, it can meet more customers needs.ReferencesACALORIECOUNTER. (2013, October 16). Candy & Chocolate Bars Compared Hersheys, Nestle and Mars Nutrition Facts. Retrieved March 16, 2014, from http//www.acaloriecounter.com/candy-chocolate.phpGlaberson, H. (2010). Hershey to launch confectionery brands in UK and Europe. Retrieved March 16, 2014, from http//www.confectionerynews.com/Manufacturers/Hershey-to-launch-confectionery-brands-in-UK-and-Europe CNN. (2013). Global 500 Hershey. Retrieved March 16, 2014, from http//money.cnn.com/magazines/fortune/global500/2012/snapshots/2190.html THEHERSHEYCOMPANY. (2011, December 31). Hershey Corporate Social responsibility progress report 2011. Retrieved March 16, 2014, from http//www.thehersheycompany.com/asset s/pdfs/hersheycompany/Hershey2011CSRReport.pdf CNN. (2011, April 1). Hersheys raises prices nearly 10%. Retrieved March 16, 2014, from http//edition.cnn.com/2011/BUSINESS/03/31/hershey.prices/index.html Jones, D. (2010, January 26). Nestle waits for market pressures to soften Hershey. REUTERS. Retrieved March 18, 2013, from http//www.reuters.com/article/2010/01/26/us-nestle-analysis-idUSTRE60P31A20100126 Markman, J. (2012, September 4). Hershey Starting to Sugar-Coat the World. Investor Place. Retrieved March 16, 2014, from http//investorplace.com/2012/09/hershey-is-sugar-coating-the-world-hsy/