Please, read and respond to the below discussion posts. (125 words each)
The response is not an evaluation of their discussion posts. You must agree with their post and add new information on your response regarding the topic in discussion. (No citation needed)
Thank you
Discussion 1
Myra Reese
Hershey continues to strive in the chocolate industry because of their
and awareness,
and 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 cu
ently 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, XXXXXXXXXXThe 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].
STRENGTHS
WEAKNESSES
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
OPPORTUNITIES
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)Companies are beginning to remove unnatural and unhealthy ingredients from food products
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)
THREATS
ST Strategies
WT Strategies
1)Growing demand for healthier food options
2)Cocoa is more difficult to produce and cocoa prices are expected to rise
3)Cocoa 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
Discussion 2
David Calderwood
We are provided an interesting perspective since the Cohesion Case on Hershey is from 2015 and we can see what they have done in response to the SWOT that we have created. An important part of emphasis was the diversification of the company and its expansion into China, recognizing the size and potential of that market; “Hershey is cu
ently expanding globally with strategic emphasis on markets in China (David, 2016, p. 26). We were able to see the threats and weaknesses develop as they under performed even before the textbook’s article. We saw that sales declined and they struggled to get a foothold in the Chinese market, despite its acquisition of Golden Monkey (p. 26).
As a response to the failure of Golden Monkey, Hershey sold it in 2018 and decided to expand its market segments domestically:
“[Hershey] announced the sale of two of its international businesses [Shanghai Golden Monkey & Tyrells (U.K. based chips)], as it continues to shift its efforts to U.S. snacking. Hershey has been focusing on its snacks business, including its recent acquisition of Skinny Pop parent Amplify Brands” (Hirsch, 2018).
Hershey combined their strength through dominance in the U.S. market and their threats & weaknesses in the global market. They consolidated their approach and decided to capitalize on the growing health market and expand their
and in that segment. They know how to market domestically and even reduced cost in 2015, (David, 2016, p. 27). Focusing domestically plays to the strengths and removes expenses from attempting to compete with competitors that already have a strong hold globally. Hershey’s domestic dominance employs their supply chain knowledge, their successful marketing strategies and continues to allow them to take advantage of the holiday market.
There are many advantages for Hershey focusing on the U.S. Market. With its proven performance we can cut the cost of goods sold in their increased product categories. They can use their knowledge of the market to design sophisticated products and customization from their 3D printers to a demographic they understand. They are simultaneously employing a diversification of product strategy and reduction of asset strategy.
Strengths
Weaknesses
1. Market share of 37% (largest)
2. CSR image (achieved reduction of waste by 1.75 million pounds)
3. Acquired 3D Systems.
4. Acquired Krave (retained company president).
5. Reduced marketing costs by 1.1%
6. Has presence across majority of market segments (80 different
ands)
7. World top performing candy bar (Reese’s).
8. Expansion into major global markets (Golden Monkey Brands)
9. Sponsorship association with College Game Day.
10. Ranked on Dow Jones Sustainability index and The Civic 50
1. Marketing concepts are American Specific.
2. Global acquisitions outpacing global revenue (17% sales v. 35.4% assets)
3. Sales reports do not distinguish product category.
4. Domestic and International sales report to the same president (stove piping strategy).
5. Chocolate manufacturing locations are centralized (higher cost of international distribution).
6. China sales declined by 47%.
7. Sales are concentrated in last two quarters.
8. New technology not expected to produce profits for 5 years.
9. Sales projection has been off for 6 of the last 8 quarters.
Opportunities
SO Strategies
WO Strategies
1. Internet Sales Market
2. Seasonal Marketing.
3. Increased interest in sophisticated flavors.
4. Health association with dark chocolate.
5. Global market access through trade policy changes
6. Chocolate sales increasing steadily (3% annually).
7. Advances in manufacturing technology (3D printing)
8. Growing healthy snack market
1. Use market segments for expansion into increased desire for sophisticated flavors. (O3, S6).
2. Continue to market Reese’s to meet the increased demand for chocolate. (O3, S1, O5).
3. Employ 3D printers to make custom products. (O7, S3).
4. Fulfill growing demand for healthy snacks with Krave
ands. (O8, S4).
1. Use seasonal strategy for known market dominance. (W1, O1, W5)
2. Design sophisticated products for future launch with focus on strategy, understanding 3D printers will delay profits across all segments. (W8, O7).
Threats
ST Strategies
WT Strategies
1. Cocoa price increase.
2. Health craze
3. Dollar value fluctuation (changing profits/losses for COG)
4. Natural disasters common in crop areas.
5. Child Labor in Africa
6. Crop sustainability (environmental impact)
7. Competitor diversification.
1. Use Krave to answer health craze. (S6, T2)
2. CSR with sustainability will assist reputation in response to child labor. (S10, T5).
3. Market focus shift to best performing product outside of chocolate at time of COG exceeding profitability until market stabilizes. (S4, S6, W1, T6)
1. Segment sales report into product category and market globally according to performance in specified market. (W3, W9, T7).
2. Liquidate under performing divisions in high shipping cost markets. (W6, T3).
3. Explore use of synthetic environments domestically to supplement loss of cocoa from natural disasters. (W5, T1, T6).
References.
David, F. R., David, F. R. (08 Fe
uary XXXXXXXXXXStrategic Management, 16th Edition [VitalSource Bookshelf version]. Retrieved from vbk:
XXXXXXXXXX
Hirsch, L. (26 July XXXXXXXXXXHershey sells two international business to focus on US snacking. CNBC. Web. Retrieved from: https:
csnews.com/hershey-sells-two-international-businesses-snacking-strategy-shifts