Warren Buffett Stock Analysis : Hershey Company Essay

2501 Words11 Pages
Warren Buffett Stock Analysis: Hershey Company Understandability: Hershey is a company in the confectionery industry that produces and sells chocolate and candy. Hershey mainly focuses on its chocolate products, such as Hershey bar, Reese’s, Hershey’s Kisses, Hershey’s Bliss, Almond Joy, Mounds, York, Kit Kat and Reese’s Pieces. Porter’s Five Forces Porter’s Five Forces is a market-based view used to analyze the confectionery industry as a whole in a narrower context. The threat of potential new entrants is pretty low because entry barriers to the confectionery industry are pretty high and firms are not likely to enter due to many well-established brand names clustering and taking over the majority of the confectionery industry. The bargaining power of buyers is pretty good in general because there are a lot of different brands and types of chocolates and confectionery products for consumers to choose from. However, when looking at specific types of confectionery products, such as gluten-free or sugar-free products, buyers have no bargaining power whatsoever because these special types of products are not plentiful. The threat of substitute products is low because good substitutes for chocolate do not exist. The bargaining power of suppliers is not very high because cocoa is produced all over the world, such as in Brazil, Indonesia, the Ivory Coast and Ghana. Therefore, confectionery companies can choose to go with other cocoa suppliers all around the world. The rivalry

More about Warren Buffett Stock Analysis : Hershey Company Essay

Open Document