Hershey's Strategic Paper

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The Hershey Company TABLE OF CONTENTS Page Disclaimer 1 Table of Contents 2 Industry Summary 3 Company Summary 7 Mission Statement Analysis/Revised Mission 13 External Analysis Summary 18 Internal Analysis Summary 21 Financial Analysis Summary 24 Alternative Strategies 29 Strategy Recommendation 36 INDUSTRY SUMMARY History of Chocolate Chocolate is made from cocoa powder, which comes from the cocoa tree’s football shaped, melon-like fruit. Cocoa trees grow best in the tropical environments of Africa and South America under the shade of the rainforest canopy.…show more content…
People are seeking functional foods which promote health and fight disease. This is reflected in the chocolate industry by a huge market shift in the preference for dark chocolate. 7 Dark chocolate products contain numerous antioxidants which promote healthy body cell function and fight disease, particularly cancer. The higher the concentration of cocoa, the more antioxidant power the product has. Premium dark chocolate products contain anywhere from 60% to 95% cocoa concentration. 9 Milk chocolate typically contains only 10% cocoa. Dark chocolate also have about 40% less sugar than their milk chocolate counterparts. Dark chocolate has always been considered an indulgence, now it can also be considered a health food. The good news for the chocolate industry is that consumers are willing to pay a premium for these dark chocolate products, with the average dark chocolate candy bar selling at $2 to $3. Sales of dark chocolate have increased exponentially at approximately 20% per year since 2001. This segment of the market is growing five times faster than the 3.9% average of the chocolate industry as a whole. 8 Sales of premium dark chocolates are currently at $1.2 billion in the United States, or approximately 8% of the chocolate market. 8 While America’s favorite traditional candy bars are still the staple of the chocolate industry today, analysts predict that dark chocolate will dominate the market in the next 25 years. Milk chocolate, say the
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