COMPETITIVE PROFILE MATRIX

Interpretation: The CPM analysis shows that Hershey is well positioned against Mars but slightly behind
Nestle, in part because of Nestlé’s market share and global footprint. However, Hershey is well position
in terms of product quality and customer loyalty.

EFE MATRIX

Interpretation: Hershey did not effectively responded to the external environment by taking advantage
of the opportunities available for them and did not done enough courses of action against the negative
impact of threats.

IFE MATRIX

Interpretation: Hershey has a strong internal position which means that they have capitalized on their
strengths and handled their weaknesses well despite the high debt and costs they are faced with.

STRATEGY 1 STRATEGY 2
Market Penetration Market Development
ADVANTAGES DISADVANTAGE ADVANTAGES DISADVANTAGE
Retain loyal Implementing a market Introduces people of Launching a product in
customers that will penetration strategy for another geographical area different market will
eventually bring a single product, it may to the company’s products not be easy
competitive edge badly affect the rest of and transforms them into
against the product lines the product’s buyers
competitors
Increase the Sometimes lowering Can make the company Needs to increase its
company’s consumer industry prices can dominant in the market by size, employees,
base harm the whole reaching the product to production to serve
company the maximum people better to the new as
well as existing
customers
The company will Lowers industry margins Helps the business to Establishing a product
have cost advantage and revenues due to discover new customers in a new market
and can increase the increased competition requires a huge fund
quantity of products
being produced
Increase the revenue Creates saturation in Having large consumer Can collapsed the
while lowering the the market and creates base, the company can established market
production cost cheaper alternatives for produce in large quantity
consumers and decrees its costs
Customers will be May create a wrong Getting more customers Loss of potential
aware on the new perception about the will increase the sales of customers
offered and new image of the product or the company
improve quality the brand itself
products
STRATEGY 3 STRATEGY 4
Product Development Horizontal Integration
ADVANTAGES DISADVANTAGE ADVANTAGES DISADVANTAGE
Helps the company It can be expensive and The company can achieve Face more
keep pace with the may outweigh the benefits higher power in the market difficulty to
changing times, received manage as they
appealing to are less flexible in
customers who get introducing
bored with always products to the
seeing the same new markets
offerings
It creates a higher There will be uncertainty It considerably reduces Horizontal mergers
value proposition for in consumers acceptance competition for the parent are heavily
the core in the new products company scrutinized under
demographics of a anti-trust laws
brand and business
Innovative product Things that interest Help the company in There are very
development will customers when you begin various ways such as the many legal
attract people from the product development reduction in costs of constraints that
within the industry process may no longer international trade, the slow down and
since they are seen as seem as exciting by the experience of the market, sometimes block
a “cutting edge” time you're ready to take some liberation in rules the process of
organization your new product to and regulations horizontal
market integration
New products can External sources can It will offer diversity in the Stunting economic
help to create new change procedures, which production of goods and growth of the new
revenues can alter your product services to a market enterprise
development
Can help your There will be large The overall income of the Very tough
business leverage unanticipated expense company increases if the transition change
opportunities to when new products will integration goes well and
market to these new fail unexpectedly the company develops
preferences

STRATEGY 5
Retrenchment
ADVANTAGES DISADVANTAGE
Able to generate more money inside the Might reduce the revenue due to the decreased of
company and the cost will be reduced as economic of scale inside the company
well

Reduce the expenses while aiming Loss of good employees

bigger growth in the company
Business and time efficiency will be The company will have to withstand the wave of hatred
pushed to thrive the business n a higher and criticism coming from all those who were told off so
level unceremoniously

Allows shareholders to gain more profit Damages the working environment in the firm,
in the long term to thrive the business
performance
Creates new innovation, plan and Employees who are retained have lower loyalty to the
strategies to survived from an economic business
downturn

QUANTITATIVE STRATEGIC PLANNING MATRIX

 STRATEGY 1 STRATEGY 2 STRATEGY 3 STRATEGY 4 STRATEGY 5
CRITICAL FACTORS Market Market Product Horizontal
Retrenchment
Penetration Development Development Integration
STRENGTHS W R WS R WS R WS R WS R WS
S1 Has a strong distribution network with a 0.14 4 0.56 3 0.42 3 0.42 1 0.14 1 0.14
large number of outlets.
S2 It has a low-cost structure, which 0.12 4 0.48 3 0.36 4 0.48 3 0.36 2 0.24
provides it with an advantage over the
competition.
S3 Strong free cash flow 0.11 3 0.33 4 0.44 4 0.44 4 0.44 3 0.33
S4 Highly skilled workforce through 0.08 3 0.24 3 0.24 3 0.24 2 0.16 2 0.16
successful training and learning
S5 It
programs.
has a strong presence on social media. 0.11 4 0.44 4 0.44 3 0.33 2 0.22 2 0.22
WEAKNESSES
W1 A high proportion of property in use 0.12 2 0.24 2 0.24 2 0.24 2 0.24 1 0.12
by is on rent, and rental charges need to
be paid.
W2 Low amounts of spending on research 0.08 2 0.16 2 0.16 1 0.08 2 0.16 2 0.16
and development as compared to the
competition.
W3 It has a high employee turnover rate, 0.06 2 0.12 2 0.12 2 0.12 2 0.12 2 0.12
with low employee motivation and
working morale.
W4 It has liquidity problems with low quick 0.1 1 0.10 1 0.10 2 0.20 2 0.20 1 0.10
ratio; the level of current assets is less
than current liabilities.
W5 Hershey's global market share in the 0.08 1 0.08 1 0.08 1 0.08 2 0.16 2 0.16
chocolate confectionary industry is only
10%
OPPORTUNITIES
O1 Internet users are increasing around the 0.14 4 0.56 4 0.56 3 0.42 3 0.42 2 0.28
world. E-commerce is also growing with
the increase in internet usage.
O2 Social media users are increasing 0.13 4 0.52 3 0.39 3 0.39 3 0.39 2 0.26
worldwide.
O3 Household income is increasing and so is 0.11 3 0.33 3 0.33 3 0.33 3 0.33 2 0.22
the consumer spending. Inflation in the
economy is expected to remain low.
O4 Growth in environmentally friendly 0.1 3 0.30 2 0.20 4 0.40 3 0.30 2 0.20
products and services. Government is
offering subsidies on these.
O5 Interest rates are low, which provides an 0.1 3 0.30 4 0.40 4 0.40 4 0.40 2 0.20
investment opportunity for large
projects.
THREATS
T1 There is a threat of new entrants coming 0.11 4 0.44 2 0.22 2 0.22 2 0.22 2 0.22
into the market.
T2 The exchange rate has been devalued. 0.1 3 0.30 2 0.20 2 0.20 2 0.20 2 0.20
T3 Fuel price has risen in recent years 0.09 3 0.27 2 0.18 2 0.18 2 0.18 2 0.18
making inputs expensive.
T4 Competition within the industry is 0.07 4 0.28 1 0.07 1 0.07 1 0.07 2 0.14
increasing.
T5 More substitute products are now 0.05 4 0.20 1 0.05 1 0.05 2 0.10 2 0.10
available.
TOTAL 2.00 6.25 5.20 5.29 4.81 3.75