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Hershey's Case

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GLOBAL STRATEGY AND POLICY

C:Documents and SettingsHSCHWARTDesktopMAN4720-015 wb 21455 SprB 11CI05.2 Sample case Hershey Summer 2 09.docx

CASE ISSUES:

(CI #1) ECONOMIC: Domestic Market

The Hershey Company is losing market share in the U.S. market.

(CI #2) ECONOMIC: Foreign Market

The Hershey Company is behind its competitors in acquiring market share overseas.

(CI #3) TASK ENVIRONMENT: Other Stakeholders

The Hershey Company is experiencing friction with the Hershey Trust Company, its majority shareholder.

(CI #4) SOCIAL ENVIRONMENT: Socio-cultural

Allegations of slave and child labor on the Ivory Coast sugar plantations have been levied against Hershey Company and the candy industry.

I. CURRENT SITUATION

The Hershey Company, the "largest [North American] producer of quality chocolate and sugar confectionary products," as of December 2007, had approximately 11,000 full-time employees and almost 1,800 part-time employees worldwide. Today, their company boasts of approximately 13,000 employees worldwide and $5 billion in total revenue. CNNmoney.com ranks The Hershey Company as a Fortune 500 company listed at 453. Hershey's major brands include: Hershey's Milk Chocolate, Ice Breakers, Reese's, Twizzlers, Kisses, Kit Kat, Jolly Rancher, and Hershey's Snack Barz.

A. CURRENT PERFORMANCE

Last year proved to be an improvement for The Hershey Company (HSY) financially. Net sales increased 4.3 percent, and they experienced a net income gain of 6.6 percent. As of December 31, 2008, the company's total revenue was $5,132,768,000 with a gross profit of $1.7 billion. This was a 13.3 percent increase over 2005.

On June 5, 2009, HSY posted 1.418 earnings per share, and as of 4:13 p.m. on the NYSE After Hours, shares were up 0.28 percent. With revenue recorded at a little over $4.9 billion, one could say the company had a sweet year during a recession.

B. STRATEGIC POSTURE

In seeking to balance our desire for profitable growth with the obligations which we have to various other constituencies, we shall strive to:

*

Protect and enhance the corporation's high level of ethics and conduct.

* Maintain a strong "people" orientation and demonstrate care for every employee

*

Attract and hold customers and consumers with products and services of consistently superior quality and value. (CI #1)

* Sustain a strong- results orientation coupled with a prudent approach to business.

* Continue to nurture the values of community and volunteerism.

1. MISSION

"Bringing sweet moments of Hershey happiness to the world every day"

2. OBJECTIVES

To our stakeholders, this mean:

Consumers Delivering quality consumer-driven confectionery experiences for all occasions

Employees Winning with an aligned and empowered organization... while having fun

Business Partners Building collaborative relationships for profitable growth with our customers, suppliers and partners

Shareholders Creating sustainable value

Communities Honoring our heritage through continued commitment to making a positive difference.

3. STRATEGIES

Improve existing business:

*

Continue to provide new chocolate and chocolate-flavored products to grocery stores and Starbuck's or other coffee stores (CI #1)

* Continue to market Hershey products with other food industries (CI #1)

*

Continue to work with vendors to convert packaging to recycled materials

* Continue to seek out ways to decrease total packaging weight in order to save on amount of trucks needed to transport products

* Concentrate on methods to gain competitive advantage (CI #1, 2)

* Find alternate and less volatile area to harvest the cocoa bean from the cocoa tree (CI #4)

* Reduce dependency on West African regions who presently provide the majority of the cocoa beans (CI #4)

* Continue to focus on cost control, quality enhancement, customer service, and productivity improvement

* Continue to improve sales throughout the United States and in all foreign countries that sell Hershey products (CI #2)

* Monitor labor conditions of where and how the raw materials needed for Hershey products are being produced (CI #4)

Expand business:

* Continue to produce healthier snacks (CI #1)

* Spend more in marketing healthier products (CI #1)

* Focus on the global market, especially China and India (CI #2)

* Integrate country's culture into marketing all brands (CI #2)

* Capitalize on specialty holidays offering Hershey gifts to retail outlets (CI #1)

* Improve marketing of the health benefits of dark chocolate

* Increase promotions expenditures (CI #1, 2)

Consumers:

* Attract and retain customers by providing quality products (CI #1, 2)

* "Bringing sweet moments of Hershey happiness to the world every day"

* Continue to develop healthier snack options for consumers (CI #1)

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