Hershey Case Study

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Case 1: Hershey Christopher Dobbins MBA 710 July 24th, 2012 Dr. Moscato Introduction to Hershey Hershey Foods Corporation is number one in the confectionary foods market. Although many people associate Hershey with chocolate, the company started when founder Milton Hershey decided to produce caramel in 1894.They are most famous for their major candy brands such as Hershey 's, Reese 's, Kit Kat, Kisses, Twizzlers, Jolly Rancher etc. However, Hershey also sells grocery products including: baking chocolate, chocolate milk, ice cream toppings, cocoa, chocolate syrup, and peanut butter. Hershey has two main operating divisions, Hershey Chocolate North America and Hershey International. Hershey exports their products to over 90…show more content…
Competitors are also well positioned in international markets in order to diversify economic stresses of their business environments. Potential Entry of New Competitors In order to enter into the confectionary market and compete with Hershey is impossible. Not only because they are number one of the largest in their industry but because they are well established. Hershey has been doing business for over a century. There is no way for a new entrant to achieve that level of brand awareness and customer brand loyalty. It would also be impossible for an entrant to compete as an economy of scale because of the large amount of start up capital it would require to compete. There is also the issue of technological Know-How. As stated earlier Hershey has been doing this sort of business for over a century and is very efficient at what they do. Potential Development of Substitute Products Hershey faces many issues when it comes to substitute products. In the confectionary industry there is a large number of substitute products. If any of Hershey’s competitors are delivering more value to consumers through price, quality, or quantity they will lose customers. The only thing that separates Hershey from everyone else is their brand recognition. Maintaining their image, product quality, and competitive pricing is key to avoid losing customers. Bargaining Power of Consumer Consumers have extremely high bargaining power when it comes to Hershey products. As

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