SWOT ANALYSIS

WOT ANALYSIS

Opportunities

1.     Various untapped countries like China, Malasya, Vietnam, India, Indonesia and Thailand
can offer better opportunities for Company, as reduce the cost of the production.

2.     Chocolate sales in the U. S. have increased about 3 percent annually.

3.     The U.S. meat snacks industry is estimated that is growing at a double-digit rate.

4.     Increase in Internet users: 51 percent of people in the world already have access to the
Internet, the time that users spend on the “smartphone” has exceeded that dedicated to
television, being 226 minutes a day.
5.     There has been an increase in average household income along with an increase in
consumer spending following the recession. The family income has a 5.2% anual.

6.     The population has been growing and is expected to grow at a positive rate for the
upcoming years. In 2019, the average fertility remains above 2.1 births per woman during its
lifetime.
7.     The decrease in the cost of gasoline in the United States, which fell 3.6%.
8.     Consumers within the industry are becoming more conscious of health.
Threats

1.     Rival Nestle, has removed all artificial flavoring and FDA-certified coloring from chocolate
candy, which affects more than 250 products and 10 brands.

2.     Mars dominates the non-chocolate candy industry. Annual revenue for Mars increased

50%.

3.     Former NBA player, Yao Ming is campaigning for healthier living within China.

4.     Nestle is 10 times larger than Hershey.

5.     Cocoa in recent years has been trading at its lowest level in almost a decade and its value
has been reduced by more than 40% since the summer of last year.
6.     The bargaining power of suppliers has increased over the years with the decrease in the
number of suppliers.

https://www.freeswotanalysis.com/food-agricuture/515-swot-analysis-of-hershey.html
https://www.coursehero.com/file/psicor/Hersheys-10-major-opportunities-1-The-Hershey-Company-plans-to-use-1
https://www.abc.es/tecnologia/redes/abci-51-por-ciento-poblacion-mundial-cuenta-acceso-internet-20190618150
https://www.essay48.com/term-paper/15254-Hershey-Company-The-Swot-Analysis
https://www.bbc.com/mundo/noticias-37369233
https://news.un.org/es/story/2019/06/1457891
https://www.efe.com/efe/america/economia/la-inflacion-a-baja-en-ee-uu-da-razones-fed-para-reducir-los-interese
https://www.elindependiente.com/economia/2017/02/25/el-chocolate-esta-en-crisis/
Strengths

1. Hershey's has 44,1% market share in USA's chocolate manufacturers industry.

2. Hershey's has billion dollar sales every year. For instance, as of 2017 Hershey's has
a huge 7.5 billion dollars per year.
3. Hershey's has a brand evaluation at $7 billion, getting to be ranked as the 94th
most value brands worldwide.

4. Hershey's stands 249 on the highest regarded companies list of Forbes. It is also
269th in the world for the best employers.
5. Hershey has a joint venture with ChefJet, a 3D system that prints chocolate.
6. Hershey's has successfully integrated number of technology companies to
streamline its operations and to build a reliable supply chain.
7. Hershey International division (one of the main Hershey's divisions), exports the
firm’s products to over 90 countries.
8. In 2015 Hershey acquired KRAVE Pure Foods Inc., for $300 million.
SO Strategies

1. (S8,O3) Hershey's must take advantage of the purchase of Pure foods to begin to
diversify in the snack market, giving it the healthy touch and offering competent
products with those already established in the industry.

2. (S8,O8) Exploring the market for healthy products with Pure foods, Hershey's
could start selling cereal bars, natural proteins, granola, healthy chocolate
milkshakes, etc.

3. ( S7,O6) Hershey's should start developing a strategy to take advantage of the

increase of the population expanding or making secure the export, for instance the
countries, where they already have a contact, start loyalty to the new and smaller
generations so that a safe posibility becomes over and over time.

4.(S6,O4) Taking account the rates of the users on internet and the new adquisitions
of technology companies, Hershey's can make a deep investigation to found or
create new strategies to attract consumers, and make them clinets.
5. (S5O7) Hersheys should work with ChefJet the production at scale, with the 3D
printer of the hershey's kisses, since they are the smallest and the distribution of
large quantities will not come at a high cost, thanks to the decrease in gasoline

6. (S2O5) Hershey's should focus more on households, due to the sale of products
within the family market, as this would give it the opportunity to have a larger
market share in a segment where income is growing.

ST Strategies

1. (S4T2) Hershey's should take advantage of this recognition given by Forbes, to

consider the purchase or to do joint venture with its main competitor in the non-
chocolate candy industry (Mars).

2. (S2O6) Hershey's must use its large income from sales to avoid high supplier costs,
it could consider two options: 1. Buy the main and most important suppliers, or stop
depending on them creating their own cocoa crops (Hershey's farm) and other
necessary resources for products.

3. (S6O6) Hershey's should work together with technology companies to create a

new supply chain system that allows not only to rationalize resources, but to
optimize the quantity and quality of suppliers used in each market.

4. (S8O3) Hershey's should use its acquisition of KRAVE Pure Foods to sponsor the
Yao Ming campaign, giving it a better opportunity to let the public know about
natural food and the various foods that Pure Foods has to accomplish this.

5. (S6O1) Hershsey's should use integration with technology companies not only for
the supply chain, but also for research and data collection that allows them to design
a new chocolate formula that does not have high levels of fats, sugars, dye; and that
contains natural products. However, this formula should provide the same
attractiveness in taste that Hershey's consumers like so much.
Hershey-Company-plans-to-use-100-cocoa-in/
a-acceso-internet-201906181500_noticia.html?ref=https%3A%2F%2Fwww.google.com%2F

nes-fed-para-reducir-los-intereses/20000011-4020888
Weaknesses
1. The Hershey's segment is such that there are many small and regional
players thereby cutting the market share in different regions.

2. The Hershey economic environment in China, Brazil and Mexico are the
primary source of concern, because, contributed to lower earnings and
sales.
3. Hershey’s is easy to duplicate and this is the problem being faced in
developing nations where counterfeit Hershey’s is found.

4. The Hershey's sales has been affected by the online sales. The 25% of
shoppers who buy items online to pick up in store have cut back on
impulse chocolate purchases that are typically located at the checkout
aisle.
5. Hershey's has a high dependency of United States market (86%).

6. Hershey's has an advertisement expenses increase by 46%.

7. Hershey's layoffs in order to cut costs. The company reducing its
workforce by 15%, which comes to more than 2,000 jobs.

WO Strategies

1. (W4O4) Hersheys should create an application or website that works for

its main markets and segments, which it offers as the option to sell small
and large quantities of its portfolio.

2. (W5O1) Taking into account the low costs of China, Malasya, Vietnam,
India, Indonesia and Thailand; Hershey's should start doing research to see
if it is feasible to sell or enter these markets and thus not depend so much
on the United States and have other options

3. (W6O4) Hershey's should use the money that invests in advertising, to

start creating entertaining content on social networks, hiring famous
people (influencers) within them.
WT Strategies

1. (W4,T4) Due to the increase in online purchases, Hershey’s could

partner with some of the most important companies in online commerce,
adding for each purchase a sweet Hershey’s for a small price or agreeing
to a deal with these companies, thus fighting losses in the aisles of the
stores and expanding its market so that no other company like Nestle has
done it.

2. (W6,T1) Hershey should develop a new line or product, of more natural

sweets, without dyes or flavorings, add them to your portfolio thus replacing
sweets with lower income, thus concentrating the promotion on your new
product, with the possibility of achieving victory in a new market in which
competition begins to be seen, dominating the market and removing the
promotion of products in which it is not seen to be effective.

3. (W7,T3) in order to have more profits, with the increase in the

consumption of healthy foods and sweets, Hershey’s could take advantage
of these trends by creating new products for this specific niche, taking
advantage of the publicity of this important player and thus increasing
jobs in the developments of this new product.

4. (W2,T3) The bad development of Hershey’s in these countries could be

due to the misunderstanding of the market, so the company could make
alliances with players or important people from these countries that
promoted their products reaching the country better, taking into account
the ideals of players or important people and countries, adding them to
their client.