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The Strengths Weaknesses Essay Paper
Strengths, Weaknesses, Essay, Paper
Opportunities SO WO
Create a candy bar with flavors that the Asian chocolate market has found to be successful (S1, 01)
Hershey should increase consumer awareness overseas by 30% over the next two years.) W1, 02
Hershey should buy a cocoa production farm in Indonesia (S2, O2)
Hershey should develop a product that balances consumer tastes within the price threshold desired by the middle class. (S2, O1)
Threats ST WT
Hershey should start a year long extensive social media campaign through Facebook, Facebook Messenger, and Instagram (S1, T1)
Hershey will utlize impulse buying features through Amazon’s online marketplace (W1, T1)
Increase marketing allowance for larger, more popular brands in underperforming channels (S2, T2)
Remove budget for products that don’t sell well or make the company money (W2, T2)
SWOT Conclusions/Insights In order to break into the expanding market in China, Hershey should use some of its leverage in the states to develop a candy bar with Asian flavors in mind. Some of the more popular flavors right now are fruity and spicy (Boudreau, Calonzo, Raghu, & Listiyorini, 2019).
With an increase in demand and higher returns, Hershey is in a good place to invest into operations overseas. Indonesia has been noted to be the best place for chocolate companies to invest in as the area in Africa is drying up (Neiburg, 2015).
Hershey has an unusually high debt/equity ratio; however, an increase in cocoa demand will help offset this. During this time, it’s important for Hershey to reach more people. If the company just keeps reducing spending and cutting assets, Hershey will lose its footing and power in the chocolate industry. Sometimes the only way to make money is to spend money. Removing their current, unproductive assets overseas gives Hershey more flexibility starting new, more strategic Asian investments.
Removing itself from any unfavorable marketing ploys in the past, Hershey should start over new and pay more attention to the preferences of their consumers. Because of the difference in culture, Hershey can’t treat its Asian consumers the same as their American consumers because their tastes differ. Hershey has a lot of debt and its sales are decreasing due to the rise in online shopping. However, utilizing impulse purchasing tactics on Amazon could allow Hershey products to be
easily added to shopping carts online (Yu, 2017). With the boom in e-commerce and Hershey’s large market share in the United States, Hershey should start a social media campaign on the most used platforms to let consumers know they can buy their favorite Hershey bars online now (Clement, 2020).
While it’s varying products weaken the brand, Hershey has more money to spend promoting the best-selling brands than diving its money amongst a lot of small underperforming brands. Hershey should increase their overall budget for their larger brands and remove the money set aside for the smaller ones—eliminating completely brands that don’t sell well.
Industry Sales Growth
High Medium Low
BCG conclusions and Insights Hershey does not release information on individual brands. It does have 43% of the market on chocolate and the chocolate industry is on the rise making its top brands to be in the Stars category (Conway, 2019). Question Marks are products that don’t make a lot of money but are in a thriving industry (David & David, 2017, p. 180).
This would be Hershey seasonal products which have been claimed to have brought the company down (Maynard, 2018). However, the seasonal products industry is doing very well (O’Connell, 2019). Cash Cows are products that are doing well in a declining industry such as Hershey’s toppings (ie. Hershey Syrup) (Global Market Insights, 2019).
I tried to discern which of the Hershey products was in a declining industry to be the Cash Cow; however, all industries are on the rise from ice cream toppings to breath mints. Although, hot cocoa does have the smallest industry growth and probably comes closest to being the Cash Cow for Hershey as the company still has the third dominant marke share (Ibis World, 2020).
References Boudreau, J., Calonzo, A., Raghu, A., & Listiyorini, E. (2019, March 26). These Asian Chocolatiers Are Spicing Up the Global Sweets Scene. Retrieved April 9, 2020, from https://www.bloomberg.com/news/features/2019-03-26/asian-chocolate-makers-vietnam-malaysi a-indonesia-philippines Clement, J. (2020, April 6).
Top U.S. mobile social apps by users 2019. Retrieved April 9, 2020, from https://www.statista.com/statistics/248074/most-popular-us-social-networking-apps-ranked-by-a udience/ Conway, J. (2019, December 18). U.S. market share of chocolate companies, 2018. Retrieved March 22, 2020, from https://www.statista.com/statistics/238794/market-share-of-the-leading-chocolate-companies-in-t he-us/ Coyle, J. J., Reiman, J., & Ruamsook, K. (2018). Chocolate bars and population shifts: How Hershey’s supply chain is adjusting to changing demographics.
Retrieved March 19, 2020, from https://www.supplychainquarterly.com/topics/Strategy/20181102-chocolate-bars-and-population -shifts–how-hershey—s-supply-chain-is-adjusting-to-changing-demographics/ Global Market Insights. (2019). Flavored Syrup Market Size, Share – Industry Outlook Report 2026. Retrieved April 9, 2020, from https://www.gminsights.com/industry-analysis/flavored-syrup-market Hirsch, L. (2018, July 26).
Hershey sells two international businesses to focus on US snacking. Retrieved March 22, 2020, from https://www.cnbc.com/2018/07/26/hershey-sells-two-international-businesses-to-focus-on-us-sna cking.html Ibis World .(2020). Industry Market Research, Reports, and Statistics. Retrieved April 9, 2020, from https://www.ibisworld.com/united-states/market-research-reports/cocoa-drinking-chocolate-prod uction-industry/ Investing. (2020). Hershey (HSY) Financial Ratios. Retrieved March 22, 2020, from https://www.investing.com/equities/hershey-co-ratios
Maynard, M. (2018, April 30). Hershey Knows It Offers Too Many Choices, So It Plans To Streamline Its Lineup. Retrieved March 19, 2020, from https://www.forbes.com/sites/michelinemaynard/2018/04/29/hershey-knows-it-offers-too-many- choices-so-it-plans-to-streamline-its-lineup/#3aa139bf52f3 Nieburg, O. (2015, April 29). ‘
We cannot let Indonesia fail’: Mars stresses Asia’s importance in meeting future cocoa demand. Retrieved April 9, 2020, from https://www.confectionerynews.com/Article/2015/04/29/What-is-the-future-of-cocoa-growing-in -Asia O’Connell, L. (2019, November 19). Holiday retail sales in the United States 2000-2019.
Retrieved April 9, 2020, from https://www.statista.com/statistics/243439/holiday-retail-sales-in-the-united-states/ Sheedy, P. (2016). A World without Hershey Kisses? Retrieved March 19, 2020, from https://digital.hbs.edu/platform-rctom/submission/a-world-without-hershey-kisses/ Yu, D. (2017, March 9). E-commerce the ticket to Millennial candy and snack sales: Analysts. Retrieved March 19, 2020, from https://www.confectionerynews.com/Article/2017/03/09/E-commerce-the-ticket-to-Millennial-ca ndy-and-snack-sales