Hershey Corporation SWOT analysis
...xports to over 90 countries worldwide. International sales make up less than 5% of its total sales. In terms of performance, Hershey Corp tries to live up to its mission statement, which is to “consistently create shareholder value by achieving excellence in every aspect of our business… continually creating value for shareholders, customers and consumers as a focused, branded, global chocolate and confectionery snack company.” Its 3rd quarter (ending September 30, 2001) consolidated sales earnings reflects Hershey’s attempt to create value for consumers, customers and shareholders. It reported $1,304,184,000 as opposed to $1,196,755,000 in the same quarter for the previous year. This figure shows an increase in sales within the span of one year in spite of a falling economy; Hershey’s performance is still good. For the first 9months of this year, consolidated net sales were $3,283,324,000 compared to $3,026,074,000 the previous year. Increase in sales reflects a quantitative satisfaction by consumers and customers. This increase in sales also comes as a result of Hershey’s efforts to lower logistic costs and improve supply chain efficiency. Thus, organizational cost cutting efforts panned out successfully. As of midnight on 12/10/01, its stock (ticker symbol HSY) was selling for $65.18 compared to a 53week high of $70.15 and low of $55.13. A relatively high price compared to how high it has been in the last 52 weeks. Also, it pays a dividend rate of $1.21/share and gives a yield of 1.9% - not too bad once again, considering the week economy. Now that we know where Hershey started and how it’s performing lets take an in-depth look at its Marketing Mix Strategy. Product: As stated earlier, Hershey makes chocolate and non-chocolate confectionery products sold in form of bars, bagged/boxed items for its snacks and it sells grocery products in the form of baking ingredients, chocolate drink mixes, peanut butter, dessert toppings and beverages. Its principal products include; Almond Joy, Hershey Cookies ‘n’ Cream, Hershey’s Milk Chocolate (with and without almond) Hershey Nuggets, Kisses and Hugs, Jolly Rancher candy bars, among others. Its grocery products include; Hershey Chocolate drink, cocoa, syrup, Reese’s peanut butter, Hershey’s and Heath baking pieces, among others. Pricing: Its prices are relatively moderate as compared with its competitors. Its prices range from 99cents for a 6 oz. Bar of candy to about $2.49 for a bag of miniature candy bars. Promotion: Hershey does seasonal as well as on-going promotions. Currently, it has two promotions one for the Christmas where is you buy 3 Hershey Christmas candy bars (6.oz or greater), you can get a “Dr Seuss How the Grinch Stole Christmas” movie storybook for just $9.95. The second is an opportunity to enter a raffle to win $1,000,000 in the Super Bowl XXXVI if you send it proof of purchase of a number of candy bars and vote for your favorite NFL team. Its other seasonal promotions are selling miniature sized candy bars especially during Halloween and offering “2-for1” deals during holidays. On an on-going basis, it offers coupons and other “2-for-1” deals. For its restaurateur customers, it offers them cash back incentives if they use and mention Hershey in their menus. Place: As I stated earlier, its main market is the US. It customers are mainly chain stores, convenience stores, wholesale clubs, concessionaires, food distributors, vending machine companies, and it reaches its end consumers through these avenues. Its largest customer is Walmart – in 1999, 17% sales came from Walmart. Other large customers include; Kmart, Albertsons, CVS, VSA and Target. Having analyzed its marketing mix strategy, I’ll also like to do a situational analysis of Hershey Food Corporation. Strengths: One of its strengths is that Hershey’s has been in operation longer than its competitors thus, has created a customer loyalty and a brand image among its consumers and customers. Customers give its products placement privileges in their grocery sections because of its good reputation. Secondly, it partners with its customers (the retailer) by providing data and programs to maximize turnover and profitability for the customer’s confectionery section. This places Hershey in “preferred position” in its customers’ eyes. Thirdly, its method of R&D strives to use consumer opinions to develop its products. For example, in making the Hershey Bites, it polled consumers and most of them told the company that they prefer rounded candy pieces because they have no sharp corners and you can easily pop them in your mouth. This, opinion, was the basis of the rounded design of Hershey Bites. Weaknesses: Hershey’s products are mainly in the Maturi...