b) Strategy Position and Action Evaluation Matrix (SPACE)

Internal Analysis External Analysis

Financial Position (FP) Rating Stability Position (SP) Rating
Return on Investment (ROI)
Leverage
Working Capital
Cash Flow
Financial Position (FP) Average
4
2
4
4
3.5
Price range of competing products
Competitive Pressure
Price elasticity of demand
Barriers to entry into market
Stability Position (SP) Average
-3
-6
-4
-4
-4.25
Competitive Position (CP) Industry Position (IP)
Market Share
Product quality
Customer loyalty
Control over suppliers/ distributors
Competitive Position (CP)
Average
-5
-1
-2
-2
-2.5
Growth potential
Profit potential
Financial stability
Ease of entry into market
Industry Position (IP) Average
6
5
4
4
4.75

FP Average = 14/4 = 3.5
SP Average = -17/4 = -4.25
CP Average = -10/4 = -2.5
IP Average = 19/4 = 4.75
Space Matrix Coordinates:
X- axis: CP + IP = -2.5+4.75= 2.25
Y- axis: FP + SP = 3.5 + (-4.25) = -0.75
Coordinate (2.25, -0.75)
Conclusion: Vector points in competitive quadrant


Space Matrix analysis:
Based on this formula, it shows that The Hershey company x-axis is 2.25 and y-axis is -
0.75.Therefore the Hershey Company directional vector is located in competitive quadrant of
the space matrix. This indicates that the Hershey Companys competitive analysis falls under
these categories which are market penetration, market development, product development,
forward integration, horizontal integration and joint ventures. Hershey Company is
considered a financially stable company that has strong competitive advantages in the
market place in a growing and stable industry. Over time, Hershey Company should increase
its financials as well as increasing the competitive advantage by expanding their product
lines, integrating some suppliers and lowering the costs.


7
6
5
4
3
2
1
-7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7
-1
(2.25, -0.75)
-2
-3
-4
-5
-6
-7
IP CP
Defensive
Aggressive Conservative
FP
Competitive
SP
g) Recommendations
From our analysis provided from the list of matrixes, we have come out with several
strategies.
New Strategies to be Started
No. Strategies Estimated cost ($)
1. Expand to global market
Hershey currently has a limited presence in many areas of the world.
We are suggesting the new organization structure to Hershey Food
Corporation. We suggest continental president, which will help to
complete globally or to increase the market share globally because
they will have the experience of the particular continents and they will
work according market conditions. The Hershey Company should go
international advertisement to promote the product as well as they
have to find out the new channels of distribution and adopt the new
channels to increase their sales.

150,000
2. Explore more locations to obtain cocoa bean
The Hershey Company should explore more and find alternate
locations for obtaining the cocoa bean from cacao tree such as
country like Jamaica. The West African regions are very volatile, this
situation will allow Hershey to have more control and authority over
their raw materials. Therefore Hershey can reduce their dependency
on an area where political unrest is still high.

100,000
3. Provide holiday products in outlets
Hershey Company can use this opportunity to try to provide holiday
products in outlets other than their website. Hershey can optimize the
importance of their specialty gift products on non-traditional holidays
such as sweetie days, grandparents day, bosss days and on
traditional holidays such as Christmas Day, Valentines Day, Mothers
Day and Halloween Day. By providing Hershey as a gifts using retail
channels, Hershey has the opportunity to increase the sale of their
specialized gift products.

35,000
4. By using innovative and efficient facilities
To remain a cost leader as well creating a differentiate product line,
Hershey must adapt quickly to change and use new technologies.
Having an innovative and efficient facility can help operation on a
global scale and cut costs in production. The best strategy to cut cost
is by making its supply chain more efficient where it further increase
the companys global name and allow them to outsource production
of their low value added products.
100,000
Existing Strategies to be Continued
6. Expand their marketing strategy to alternate consumer
channels
One of the marketing strategy Hershey company need to do is they
have to invest in advertisement. By investing in advertisement, they
can maintain the market share as well as increase the market share.
Therefore, Hershey should adopt and use the global channels of
50,653
distribution and multinational channel to increase the sales of their
products worldwide

7. Develop organic product
Hershey needs to continue to expand the market healthy products in
order to gain a greater market share. Hershey should continue to
market the products they already have in categories and continues to
develop new products that address the healthy to the public, this will
increase their revenue throughout the year.

300,000