Case 12 Hershey Company - 2009MGT4760-1 *Fahmi BECS 0721391, Hasan BACC 0720683, Ringga BBA 0724213, Abi 0729623

BECS E-mail of sender representing the group: idrisfahmi89@gmail.com Our group case 1 of 2 Due date: 19-jul-2012 Filename: Fahmi- case12 Destination e-mail MGT4760-1: first.ceo2003@gmail.com Date of submission: 17-jul-2012

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 Develop new dietary chocolates who would like to lose weight or diabetic Key factors Strength 1. The sales in second quarter 2009 is increased by 5.9 percent to $1.17 billion and the profit is amounted to $71.3 million 2. Hershey recently expanded its global presence via joint venture in China and India 3. Seasonal Sales help Hershey to boost up its revenue 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 company projects a reduction of 1,500 positions over the next 3 year period 0.10 4 0.4 0.20 1 0.15 0.10 2 0.16 3 0.24 0.15 2 0.2 4 0.4 0.15 4 0.6 4 0.6 Weight AS TAS AS TAS 2 Partners with other intermediaries for including Hersheys products in their gift baskets

2. Hersheys remains heavily dependent on its domestic markets without 86% of revenues derived from operations in the United States 3. The companys long term debt increased from $ 1,279,965 in 2007 to $ 1,505,954 in 2008. Long term debt to equity ratio is 4.73 Sum Weight Opportunities 1. The theme park eclipsed having its 75 million visitors 2. Increased consumer preferences for healthy and organic products 3. Declining in core brand sales 4. Mergers and acquisitions 5. Having higher EPS than other confectioners industry in average 6. Increased consumer concerns about artificial ingredients Threats 1. Price fluctuations 2. Expansion business of competitors (by generating sales from outside United States ) 3. Major competitors have been introducing other products portfolio (products line) such as pet care, pharmaceutical products, milk products, etc. 4. Poor harvests of sugar which increase its price Sum Weight
th

0.15

0.3

0.6

0.15

0.45

0.45

1.00 0.08 2 0.16

0.15

0.6

0.05 0.15 0.12

2 0.3

3 3 4

0.15 0.45 0.48

0.08

0.24

0.13

0.13

0.52

0.07

0.21

0.03

0.06

0.06

0.14

0.56

0.28

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 Hersheys 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.