Swot Analysis Of Hershey Company

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Hershey Company and Chocolate Industry Situation and Challenges

Company Information
Take 5 was a chocolate bar that first produced by the Hershey Company in the 2004. It consisted of 5 components: pretzel, caramel, peanut butter, peanuts, and a chocolate coating. The Hershey Company was found by Milton S. Hershey in 1894. Its headquarters are in Hershey, Pennsylvania. Now Hershey is the largest chocolate producer in North America and a leader of chocolate industry in the world. It operates in 50 countries and employs more than 14,000 people worldwide. In 2013, Hershey’s total company revenue is about $7.0 billion, majority of that in domestic market about $4.7 billion. (Hester Jeon, 2013) Chocolate business unit and the sweets and refreshment business are the Hershey's two primary business units. Hershey owns more than 80 famous brand names including Hershey's chocolate bars, Hershey's Kisses, Reese's, Kit Kat, Twizzlers and so on. In last 5 years, the company is focused on expand its international markets share in different countries like China and Mexico while maintaining its markets share in North America.

Industry Information
In the chocolate industry the companies produce and retail chocolate products and confectioneries by using cacao beans, sugar and other materials. The Hershey Company, Nestle SA, Mars Inc. are the major players in America chocolate industry. Hershey Company’s market share is 30.5%, Mars Inc is 24.2%, Nestle SA is 10.1%. In 2013, America chocolate industry revenue is $15.5 billion and profit is $2.1 billion. In the past 5years the average annual growth is about 1.5% (Exhibits 1). Because of lower per capita disposable income in 2008, the consumers turned to buy cheaper candy and chocolate. The sales vol...

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.... In 2008, the world price of cocoa increased 31.4%, in 2010 it increased another 17.9% in 2010. The other raw material, sugar’s price increased 44.3% in 2010. (Hester Jeon, 2013) Therefore, a significant spiking in the price of raw materials adversely affects profit of the whole chocolate industry. The Mars Inc has a plan to invest in cocoa planting’s research and development. The company wants to help the cocoa farmers increase their yields and efficiency. Consequently, the could reduce and control the price of cacao beans.
Growing health consciousness
More and more Americans have realized that consuming to much sugar and fat is harmful to their health. This concern would reduce the sales of traditional chocolate product. Chocolate manufacturer actively research and develop new healthier and more nutritious chocolate like free-sugar, low-sugar and dark chocolate.

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