1. The Hershey Company
By: Chelsea Boles, Elizabeth Burrows, Jessica Edwards, Melinda Nguyen, & Rachel Parrish

2. The Hershey Company is the leading North American manufacturer of quality chocolate and candies.
Future Vision: To expand into more categories beyond candies, finding new ways to bring goodness to people everywhere.

3. Business Level Strategy
Best-Cost Provider
More Value for Money
Satisfy Expectations
Resources & Capabilities
Value Conscious Buyers

4. Target Market & Demographics
Target Market: North America

5. External Analysis: 5 Competitive Forces Overall – Moderately high
Suppliers
Moderately High
Buyers
Moderate
New Entrants
Weak
Rivals
Substitutes

6. External Analysis: Strategic Group Map

7. Financial Analysis

8. Financial Analysis

10. SWOT Analysis

11. SWOT Analysis

12. (IBISWORLD, 2014)

13. The Central Problem
The central issue is not maximizing available resources as a company as well as limited international involvement in the marketplace.

14. Symptoms Competitors have at least 7 times the # of plants.
Major competitors control 70% of the chocolate market in China.
90% of Hershey’s revenues/profits come from U.S. market.
(Hershey’s Food HSY)
(Lawerence, 2013)

15. Concentrate on growth in Chinese chocolate market
Potential Solutions
Concentrate on growth in Chinese chocolate market
Expand the number of Hershey plants and increase the number of employees

16. Rejected Solution: Expanding plants and increasing # of employees
Total of approximately $300 million to open a single manufacturing plant
Approximately 700 employees to run a single plant
Costs may outweigh the benefits

17. The Best Solution: Concentrate on growth in Chinese chocolate market
How we get there:
Introduce 2 new products
Ongoing research for product innovation
Increase advertising budget
Expand availability of Hershey products in Asian market
Results will include:
Competitive advantage
Heighten buyers interest in the new market
Increase market share in Asian market

18. Come out with 2 new products, catering to Asian market
Implementation
Come out with 2 new products, catering to Asian market
Every 1 year to 1 ½ years introduce new product attribute
Ongoing research for product innovation
Increase retail presence & introduce Chocolate World
Start with 13% of net sales to advertising  increase to 15% year 2

19. Strategy Defense
Innovating and producing new candies that appeal to the Asian culture will ensure that Hershey can increase their market share to compete with their rivals (Murphy, 2013).
The timeline for this project would be within the next five years since Hershey plans to increase sales by a variable of seven in China during that time frame (Murphy, 2013).

20. Strategy Defense
The costs that are associated with this strategy would be the sunk cost of $250 million to complete the new plant in Johor, Malaysia, which is scheduled for completion in 2015 and any additional research costs that would be related to inventing new candies (Hershey expands, 2013).
This new plant’s vital geographic area empowers delivery access to over 25 markets across Asia where Hershey has assertively attempted to develop its presence in recent years (Hershey expands, 2013).
The only issue that we could potentially face would be overspending on additional production facilities and on research for the innovation of new candies in order to increase brand awareness and brand recognition.

21. Chinese Chocolate Industry
2013
8% increase =
$1,200,000,000
Market Shares
Mars
43.30%
$519,600,000
Nestle
12.50%
$150,000,000
Mondelez
1.00%
$12,000,000
Hershey’s
2.20%
$26,400,000
2014
8% increase =
$1,296,000,000
Market Shares
Mars
47%
$609,120,000
Nestle
14%
$181,440,000
Mondelez 1%
$18,144,000
Hershey’s 7%
$90,720,000
2015
8% increase =
$1,399,680,000
Market Shares
Mars
52%
$723,634,560
Nestle
15%
$215,550,720
Mondelez 2%
$21,555,072
Hershey’s
14%
$195,955,200
Hershey’s wants to increase retail stores by 32% and sales force by 60%.

23. Projected Income Statement

24. Projected Income Statement

25. References
Castner, H. (2012, December 7). Hershey’s Market and Competitors Analysis.
Company Profile. (2014, May 19). In The Hershey Company. Retrieved July 23, 2014, from
Hershey. (2014, May 1). Forbes. Retrieved July 17, 2014, from
Hershey's. (n.d.). The Hershey Company. Retrieved July 20, 2014, from
Hershey's Company. (2014, July 15). Newsroom. Retrieved July 20, 2014, from The Hershey's Company:
Hershey expands footprint in Asia. (2013, October 4) Baking Business. Retrieved July 23, 2014, from
Hershey Foods (HSY). (n.d.). Stock:. Retrieved July 24, 2014, from
IBISWORLD. (2014). . Retrieved July 24, 2014, from
Lawerence, S. (2013, December 22). Bar Wars: Hershey Bites Mars (Fortune, 1985). Fortune Bar Wars Hershey Bites Mars Fortune1985 Comments. Retrieved July 19, 2014, from

26. References
MarketLine. (2013, November 1). Chocolate Confectionary in the United States. Retrieved July 20, 2014, from MarketLine Industry Profile:
Melby, C. (2012, September 25). Hershey Invests $300 Million In Future Of American Manufacturing. And Consumption. In Forbes. Retrieved July 23, 2014, from
Murphy, C., & Burkitt, L. (2013, May 20). Hershey Keen for Piece of China. The Wall Street Journal. Retrieved July 23, 2014, from
Nieburg, O. (2013, October 4). Hershey marks biggest outlay in Asia with $250m Malaysia plant. ConfectioneryNews.com. Retrieved July 17, 2014, from
Saleem, R. (2009, May 11). Hershey Foods Corporation Swot Analysis. Scribd. Retrieved July 17, 2014, from
Scully, C. Z. (2014, January 31) Global Top 100: Candy Industry's exclusive list of the Top 100 confectionery companies in the world!. In Candy Industry. Retrieved July 23, 2014, from confectionery-companies-in-the-world?page=5
Thompson, A. T. (2014). Strategic Management. East Carolina University.
Yahoo! Finance. (2014, July 20). HSY Competitor's. Retrieved July 20, 2014, from Yahoo! Finance: