Case 12 Hershey Company - 2009MGT4760-1

*Fahmi BECS 0721391, Hasan BACC 0720683, Ringga BBA 0724213, Abi 0729623 BECS
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Our group case 1 of 2
Due date: 19-jul-2012 Date of submission: 17-jul-2012
Filename: Fahmi- case12

Destination e-mail MGT4760-1: first.ceo2003@gmail.com

Forms of submission: (i) Hardcopy at start of class on due date; and (ii) MS Word 2003 e-mail
attachment by 6.00 p.m. on due date
A QSPM FOR Hershey Company

Strategic Alternatives
1 2
Develop new Partners with other
dietary intermediaries for including
chocolates who Hershey’s products in their
would like to gift baskets
lose weight or
diabetic
Key factors Weight AS TAS AS TAS
Strength
1. The sales in second quarter 2009 is 0.15 4 0.6 4 0.6
increased by 5.9 percent to $1.17 billion
and the profit is amounted to $71.3 million
2. Hershey recently expanded its global 0.15 2 0.2 4 0.4
presence via joint venture in China and
India 0.10 2 0.16 3 0.24
3. Seasonal Sales help Hershey to boost up its
revenue 0.20 1 0.15 -
4. Hershey is actively involved in CSR such as
building the school for the orphanage and
Cocoa Initiative foundation
Weakness
1. Due to global supply initiatives, the 0.10 4 0.4 -
company projects a reduction of 1,500
positions over the next 3 year period
 2. Hershey’s remains heavily dependent on its 0.15 2 0.3 4 0.6
domestic markets without 86% of revenues
derived from operations in the United States
3. The company’s long term debt increased 0.15 3 0.45 3 0.45
from $ 1,279,965 in 2007 to $ 1,505,954 in
2008. Long term debt to equity ratio is 4.73
Sum Weight 1.00
Opportunities 0.08 - 2 0.16
th
1. The theme park eclipsed having its 75
million visitors
2. Increased consumer preferences for 0.15 4 0.6 -
healthy and organic products
3. Declining in core brand sales 0.05 - 3 0.15
4. Mergers and acquisitions 0.15 2 0.3 3 0.45
5. Having higher EPS than other confectioners 0.12 - 4 0.48
industry in average
6. Increased consumer concerns about 0.08 3 0.24 -
artificial ingredients
Threats 0.13 1 0.13 4 0.52
1. Price fluctuations
2. Expansion business of competitors (by 0.07 - 3 0.21
generating sales from outside United States
)
3. Major competitors have been introducing 0.03 2 0.06 2 0.06
other products portfolio (products line) such
as pet care, pharmaceutical products, milk
products, etc.
4. Poor harvests of sugar which increase its 0.14 4 0.56 2 0.28
price
Sum Weight 1.00

TOTAL ATTRACTIVENESS SCORE 4.15 < 4.6

The result shown above shows that Hershey Company should choose of partnering with other
intermediaries for including Hershey’s products in their gift baskets. This is because, the Total of
Attractiveness Score generate higher for second alternatives is 4.6 rather than the first alternative,
such as developing new dietary chocolates who would like to lose weight or diabetic, illustrated by
4.15. It should be noted that, almost all of the internal and external factors (both opportunities and
threats) are seemed to be favouring for second alternatives.