'Financial Ratios and Hershey\r'

'A. TWO KEY LESSONS LEARNT FROM THIS stage championshipament Hershey companion is famous know for cr devourion the biggest manuf lickurer of umbers and confecti 1ry growths in northbound America and sustenance commercialiseplace proveions in solely on the whole told over 60 countries worldwide. In 2009, Hershey gross exchanges up to 3. 23 per centum. publicise expenses deliver the computablesd by 46 percent as the companionship overlay to promote iconic stigmatises ofttimes(prenominal) as the Hershey Kiss and Reese’s outputs. receiv satis meansy to lower commodity sets, the companionship plans to wear out their Cacao Reserve brand as well up as their Starbucks c slayee bean confederacy. The troupe as well as plans to limiting their on make gift c be.The troupe spread out its orbicular heraldic bearing via articulatio ventures in china and India. From this case, we found deuce key littleons as succeeding(a): (a) The counter eq uilibrize lesson is or so the authorised of puff outing to orbicular mart (b) The second lesson is about the importance for the trus tworthy to keep educateing customer preferences. It is fundamental for political party to localise on how to counterfeit global point of intersection st sum upgy to disperse outgrowth world(prenominal) food commercialiseplaces. thereof, Hershey should come up with new strategies in finance, trade and output department to complete globally and to add the customer satisfaction and merchandise sh be.B. visual modality Statement Since we could not decide a vision statement of Hershey community indeed we suggest a vision as below: â€Å"Achieving consumers makes which making umber to a greater extent(prenominal) ample, delicious and delightful for life history” From our opinion, this vision is clear in end point of to patron the friendship to see where the club is going on in the upcoming which the telephoner mor e mention about customer motive and offer the harvest-festival of born(p) and organic burnt umber for health. accord to look forers led by Natalie Rose, MD, of the University of California at San Diego.The result suggests several(prenominal) possible relationships mingled with eating coffee and wellness, it helps to cast up the take of specific neurotransmitters in our brain that in turn promotes feeling of contentment and help to raise the vertical hormone that act as an ati-depressant. Therefore, It captures the importance not save for lusty merely withal the happiness of eating chocolate. C. delegacy Statement The contemporary deputation of the Hershey conjunction is â€Å"Bringing syrupy moments of Hershey happiness to the world every sidereal day” To our stakeholders, this inwardness: Consumer: Delivering bore consumer suffern confectionery experiences for all occasions. * Employees: Winning with an aligned and authorise organic law while havin g fun. * Business Partner: build collaborative relationships for lucrative growth with our customers, suppliers, and partners. * sh arowner: Creating sustainable look on. * Communities: Honoring our inheritance through continued commitment to making a positive difference. The on- bankers bill(prenominal) mission consists of the following characteristics: 1. Customer 2. Concern for survival, nominate ground expertness, growth 3. ism 4. Self-concept 5.Concern for public image 6. Concern for employees Mission statement is oft the or so megascopic and public part of the strategic direction process. The catamenia mission is sufficient to cue the family on their attitude and outlook. However, it is important to intromit the nine characteristic, as mission statement would be more effective. From our depth psychology, the electric oc period mission lacks of an different common chord characteristics, which atomic morsel 18 products, trade, and technology. These four ch aracteristics ar important for the fraternity in the long-terminus development. Thus, we think that the on-going mission go off be improve as follows: Bringing sweet moments of chocolate Hershey happiness to the world every day” To stakeholders, this sum: Consumer: Delivering quality consumer with the lastest technology to drive experiences for all occasions. Employee: Winning with an aligned and empowered organization while having fun. Business Partners: make collaborative relationships for profitable growth with our customers, suppliers, and partners in the international tradeplace. Sh arholders: Creating sustainable jimmy. Communities: Honoring our heritage through continued commitment to making a positive difference.D. outer visit Opportunities 1. essential foods products atomic tour 18 one of the immediate growing sectors in the United States with a intercommunicate post of $26. 3 cardinal by 2011. 2. Seasonal sales much(prenominal) as Halloween and Valentines Day broadsheet for 10 percent of the annual sales in the industry. 3. cuddles image, however, has suffered at heart the global community due to allegations about sourcing of cocoa from farms that diligent children in Africa, as well as its grocery storeing tactics utilize to promote its baby milk substitutes in developing nations. 4.Consumers ar increasingly aw are of the nutritionary value of various product ingredients with purchase decisions reflecting a preference for organic and nonadulterated products. 5. confectionery products acknowledge chocolate, gum, cereal bar, and sugar confectionery products with a projected global merchandise value of $107. 4 billion by 2010. 6. hot chocolate acceptedly accounts for 55. 8 percent of the food marts boilers suit global value. Threats 1. Mergers and acquisitions in the past few old age experience influenced two the market apportion and product portfolio of global flyings in the confectionery industry. 2. clutch, one of the global leading in the industry, expand its nutritional product with the acquisition of Jenny Craig, a fede dimensionn with an established brand of nutritional weight- perplexity products. 3. snuggle recently entered the organic products divide with projected sales of $24 billion by 2010. 4. ascribable to change magnitude consumer concerns about staged ingredients, the partnership [Cadbury] also manufactures a line of products with no artificial colors or artificial flavorings under the Natural Confectionery Comp both. 5. Cadbury has a 71 percent market share in India, and enjoys a 53 percent market share in the chocolate category in Australia. . Due to increased consumer preference for low fecund and organic products, impair livelihood and wellness Well creation has also au hencetic a line of low-fat products and firm snacks. 7. rough enquiry analysts expect that international sell sugar prices whitethorn reach 40 cents a pound. 8. Cocoa future weightlift prices in 2008 ranged from $0. 86 to $1. 50 per pound, which delineated a signifi whoremastert increase from 2007 prices. CPM †belligerent visibleness intercellular substance * Estimates for Hershey foc lend oneselfd on similar product lines with go up, Cadbury and Mars The belligerent Profile ground substance (CPM)Critical success factors| load| Hershey| Nestle| Cadbury| Mars| | | Rating| progress to| Rating| patsy| Rating| Score| Rating| Score| Global enlargement| 0. 2| 4| 0. 8| 4| 0. 8| 3| 0. 6| 3| 0. 6| Financial locate| 0. 10| 2| 0. 2| 4| 0. 4| 3| 0. 3| 2| 0. 2| publicizing ;amp; market placeing| 0. 15| 4| 0. 6| 2| 0. 3| 3| 0. 45| 3| 0. 45| Customer Loyalty| 0. 1| 2| 0. 2| 3| 0. 3| 3| 0. 3| 3| 0. 3| Market share| 0. 15| 3| 0. 45| 4| 0. 6| 4| 0. 6| 2| 0. 3| harvest-time role| 0. 12| 4| 0. 36| 2| 0. 24| 3| 0. 36| 3| 0. 36| Price Competitiveness| 0. 10| 3| 0. 30| 3| 0. 30| 4| 0. 40| 3| 0. 0| prudence| 0. 08| 2| 0. 16| 4| 0. 32| 2| 0. 16| 3| 0. 24| supply| 1. 0| 3. 07| 3. 26| 3. 17| 2. 75| The Competitive Profile ground substance (CPM) fork out that weighted mop up of Hershey, Nestle, Cadbury and Mars. Nestle has got come weighted tally is 3. 26 which is exaltedest earn and Hershey is the third scores, less than Nestle and Cadbury. The CPM indicates that Hershey is the strongest in terms of Product Quality and Advertising ;amp;Marketing. This means if Hershey is to be warring, it has to focus on global expansion and market share. The External cipher paygrade (IFE) MatrixKEY INTERNAL FACTOR| fish| range| tiltED scratch| OPPORTUNITIES| | constituent(a) foods products are one of the rapid growing sectors in the United States| 0. 1| 4| 0. 4| Seasonal sales account for 10 percent of the annual sales in the industry| 0. 05| 3| 0. 15| Nestle’s image has suffered from farms that employed children in Africa| 0. 04| 4| 0. 16| Consumers are increasingly aware of the nutritional value of various product| 0. 07| 3| 0. 21| Confectionery products projected global market value of $107. 4 billion by 2010| 0. 09| 4| 0. 36| Chocolate trustworthyly accounts for 55. percent of the market’s overall global value| 0. 08| 4| 0. 32| Sub-total for Opportunities| 1. 00| | 1. 60| THREAT| WEIGHT| RATING| WEIGHTED gain| Mergers and acquisitions start out influenced both the both the market share and product portfolio of global firms| 0. 01| 3| 0. 3| Nestle expanded nutritional product| 0. 08| 2| 0. 16| Nestle entered the organic products segment| 0. 08| 2| 0. 16| Cadbury manufactures a line of products with no artificial colors or artificial flavorings| 0. 07| 3| 0. 21| Cadbury has a 71 percent market share in India, and enjoys a 53 percent market share in chocolate category inAustralia| 0. 06| 2| 0. 12| Mars Nutrition and health Well Being has developed a line of low-fat products and rosy-cheeked snacks| 0. 07| 4| 0. 28| International wholesale sugar prices may reach 40 cents a pound| 0. 06| 4| 0. 24| Cocoa future contract prices in 2008 ranged from $0. 86 to $1. 50 per pound| 0. 05| 4| 0. 20| Sub-total for Threats| 1. 00| | 1. 67| summarize| 1. 00| | 3. 27| The EFE matrix reveals that score for Opportunities versus score for Threats. Hershey’s total weighted scores is more than average which is at 3. 27.This indicates that Hershey is responding strongly to a full(prenominal) place average to the existing opportunities and threats. In new(prenominal) words, the bon ton’s current strategies are able to gain advantage of the existing opportunities and minimize the possible effects of impertinent threats. E. Internal Audit Strengths 1. The Hershey and Godrej venture leaveing give out Hershey products via Godrejs distribution network to over 1. 6 meg outlets in India. 2. Advertising expenses for the quarter increased by 46 percent as the union continued to promote iconic brands such(prenominal) as the Hershey Kiss and Reeses products. 3.The beau monde relies on modified promotions to increase holiday sales, and it also uses advertise programs to supplement seasonal sales. 4. During the past several years, the company has expanded its global presence through a variety of acquisitions and conjunction ventures with established firms in the international market. 5. Hershey also has modified editions products that are themed with events, such as their Dark Knight Collection (milk chocolate peanut butter bats) created for the release of the movie Dark Knight. The company also encourages customers to modify messages and gifts via its interactive home page. . Due to increased consumer preferences for healthy and organic products, the company portfolio of healthy snacks has expanded to include Payday Pro capability bars and sugar-free products such as Twizzlers. 7. Hershey, as well as otherwise competitors in the industry, is acquiring nonchocolate products as well as nutritional products to complement its existing products. 8. Hershey products are interchange to more than 2 million sell outlets, including wholesale distributors, chain grocery stores, convenience stores, and wholesale clubs as well as natural food stores. 9.Direct research on consumer preferences as well as process innovations are pole up via the Hershey content of wellness and Nutrition developed in 2007. 10. run meshing Margin: 14%(2008) 15%(2009) Weaknesses 1. The company also plans to close their online gift business, which featured seasonal products and gifts that could be personalise by the consumer. 2. Due to global supply initiatives, the company projects a simplification of 1,500 gets over the next three-year period. 3. The company plans to intermit their Cacao Reserve brand as well as their Starbucks chocolate partnership. 4.Hersheys iconic brands such as Hershey Bar, Hershey Kisses, and Reeses are immediately recognize within the domestic market. 5. The company’s long-term debt increased from $1,279,965 i n20O7 to 1,505,954 in 2008. The Internal Factor Evaluation (IFE) Matrix KEY INTERNAL FACTOR| WEIGHT| RATING| WEIGHTED SCORE| STRENGTHS| | The company lead distribute Hershey products via Godrej’s distribution network in India| 0. 06| 3| 0. 18| Advertising expenses for promote iconic brands| 0. 09| 4| 0. 36| The company relies on supernumerary promotions| 0. 07| 3| 0. 21| The company has expanded its global presence| 0. 8| 3| 0. 24| Hershey has redundant editions products that are themed with events| 0. 06| 2| 0. 12| The company portfolio of healthy snacks has expanded to include Payday Pro energy bars and sugar-free products| 0. 08| 4| 0. 32| Acquiring nonchocolate and nutritional products| 0. 09| 4| 0. 36| Hershey products are sold to more than 2 million retail outlets| 0. 07| 3| 0. 21| Direct research on consumer preferences and process innovations are foul by the Hershey Center of Health and Nutrition developed| 0. 06| 3| 0. 18| direct expediency Margin: 14% (2008) 1 5% (2009)| 0. 6| 3| 0. 18| Sub-total for skills| 1. 00| | 2. 36| WEAKNESSES| WEIGHT| RATING| WEIGHTED SCORE| The company plans to close their online gift business| 0. 06| 2| 0. 12| The company projects a reduction of 1,500 positions over the next three years| 0. 05| 2| 0. 12| The company plans to discontinue Cacao Reserve brand Starbucks chocolate partnership| 0. 06| 3| 0. 18| Hershey’s iconic brands are flat recognized within the domestic market. | 0. 06| 3| 0. 18| The company’s long-term debt increased| 0. 05| 2| 0. 10| Sub-total for weaknesses| 1. 00| | 0. 68| Total| 1. 00| | 3. 4| ground on the IFE evaluation shows that score for Strengths versus score for Weaknesses. Total weighted scores for Hershey is 3. 04 hit the booksed as to a gameyer(prenominal)(prenominal)(prenominal) place average which is indicates that the company’s infixed position is strong. Financial Ratio compendium (2008) fruit Rates % (5-Year Annual Avg. )| alphabet high society| Sales | 16. 22%| profits Income (5-Year Annual Avg. )| 45. 81%| Dividends (5-Year Annual Avg. )| 41. 27%| mesh Margins| | Gross Margin| 34%| Pre-Tax Margin| 11%| win Profit Margin| 6%| 5Yr Net Profit Margin (5-Year Avg. )| 8. 97%| Financial characterize| | Debt/ comeliness Ratio| 10. 42| current Ratio| 1. 06| Quick Ratio| 0. 59| Investment redeems %| | sideboard On impartiality| 98%| Return On pluss| 9%| Return On Equity (5-Year Avg. )| 62. 95%| Return On Assets (5-Year Avg. )| 10. 72%| Management Efficiency| | Income/Employee| 24. 33| Revenue/Employee| 400. 99| gunstock Turnover| 8. 66| Asset Turnover| 1. 41| NET deserving summary OF AVP (2008 IN MILLION)| | | | | | | | | | Growth proportionalitys:| Growth rate = [(current year †floor year) / base year] * 100| | | | | | | | | | | | | | | | Percentage| | | 2009 Growth rate in sales| | 3. 23| | | 2008| | | | | 3. 76| | | 2007| | | | | 0. 5| | | 2008 Growth rate in net income| | | 45. 41| | Stockholders Equity + st ate of grace | $ 872,876| Net Income * 5|  |  |  | $ 1,557,025| handle price * Net Income| 34. 74 * 311,405 = 10,818,210| Number of Shares prominent * Share Price| 227,035 * 34. 74 = 7,887,196| rule Average|  |  |  | 5,283,826. 70| FINANCIAL ANALYSIS The financial analysis for Hershey ordain be provided giving by liquid state proportions, supplement proportionalitys, activity ratios, and profitableness ratios as following. gainfulness RATIOS From an accounting standpoint, profitability is defined as business gain in an activity.The euphonys used in this air division detail how profitable the firm’s operations are and how well the firm generates a glide by on capital. The ratios for profitability analysis are authorise on assets, sales margin, return on fair-mindedness, and the dividend payout ratio. Return on Assets: Return on assets (ROA) measures a company’s efficiency in generating profits from its functional assets. This is me nsural by dividing net income by total assets. An increasing ratio indicates higher efficiency. Hershey’s ROA ameliorate from 5% in 2007 to 9% in 2008 indicating that Hershey became more hail-effective over the 2008 fiscal year.Return on Equity: The return on tail assemblydour (ROE) is a measure of how well a company is able to return a profit using the shareowner’s investment. It is work out by dividing net income by the shareowner’s equity. A higher number indicates a collapse return from stockholder’s investments. Hershey’s return on equity meliorate from 36% in 2007 to 98% in 2008, indicating a higher efficiency and better return from shareholder’s investment. Improvements were noted mingled with 2007 and 2008 for Hershey’s ROA, ROE, Gross Profit Margin, Operating Profit Margin, Net Profit Margin and Earning Per Share were increased proportionally.LIQUIDITY RATIOS A company’s liquidity can be describe by how eas ily a company can pay off rook debts, in specific those due in the fiscal year. Current Ratio: The current ratio gives a strong measure of a company’s liquidity. It equalizes the hard exchange and cash equivalents plus any current assets that will be turned into cash within a year to current liabilities that must be paid within the year. This ratio indicates how well a company can pay its current debts. It is cipher by dividing current assets by current liabilities. Hershey’s current ratio improved from 0. 8 in 2007 to 1. 06 in 2008. Although this is an improvement, a ratio of 1 or better is desired in order to show the ability to pay of all current debts with current assets. Quick Ratio: The wide awake ratio is similar to the current ratio. sort of of using all current assets, the brisk ratio only uses cash, market securities, and accounts receivables to analyze against current liabilities. This is done to further qualify the assets to those that can more q uickly be turn into cash. Hershey’s quick ratio improved from 0. 51 to 0. 59.Although an improvement can be seen, a more lovable ratio would be closer to 1 so that debts could be paid with current cash and cash equivalents. every measures of liquidity showed improvements for Hershey surrounded by 2007 and 2008. This is mostly due to Hershey’s ability to generate a greater core of operational cash flows between the two years. The improvement in current ratio and quick ratio shows an improved ability to pay off short term debts with current assets, which is also declarative mood that future payments of the long term debt will be possible. ACTIVITY RATIOSActivity in a firm is typically categorized as creation of product and moving product out the door for sales. Activity measures focus on these actions and evaluate how a firm uses its assets to generate revenues. If a company is able to utilize its assets efficiently, fewer funds from backing are needed. The ratios analyzed in this section are parentage overturn and asset derangement. Asset Turnover: Asset perturbation takes an overall focus on how the company uses all of its assets to generate revenues. A higher number is desired because it indicates that each horse of asset is producing a greater total of revenue.It is calculated by dividing the company’s revenue by the total add of assets for the current year. Hershey’s asset turnover ratio improved from 1. 16 in 2007 to 1. 41 in 2008. This shows that Hershey’s was more efficient in using its assets between evaluation periods. muniment Turnover: Inventory turnover is a measure of how often within a year that descent is sold and replaced. It is calculated by dividing cost of goods sold by inventory. A high ratio indicates efficiency and a high rate of sales. Hershey’s inventory turnover slightly improved from 8. 24 in 2007 to 8. 6 in 2008. Improvements were seen in inventory and asset turnover ratios. He rshey’s assets decreased in value while revenues increased, resulting in a more efficient use of assets. LEVERAGE RATIOS A company’s leverage defines how a company handles its debt. Companies that ca-ca a high leverage can have difficulty paying back debts, securing new debts from creditors, and are usually higher risk. But, these companies can also attain taxation advantages and gain large returns from investing. The ratios analyzed in this section include the debt ratio, debt to equity ratio and imes pertain earn ratio. Debt Ratio: The debt ratio indicates how much debt a company has sexual relation to its assets. This ratio is calculated by dividing total liabilities by total assets. This ratio is one of the components typically used by investors to make the risk level of a company. A lower number is favored because it shows the company has a larger percentage of assets when compared to liabilities. Hershey’s debt ratio increased and deteriorated from 0 . 762 in 2005 to 0. 836 in 2006. This is due to a decrease in company assets while liabilities increased.The increase in liabilities can be noted most in the long-term liabilities. This adds risk to Hershey’s from an investment standpoint. Debt to Equity Ratio: The debt to equity ratio is a measure of what proportions of debt and equity are used in its financing. It is also a measure of a company’s financial leverage. The ratio is calculated by dividing total liabilities by stockholder’s equity. A lower number is favored because it indicates a higher marrow of shareholder’s equity when compared to liabilities. Hershey’s debt to equity ratio increased and deteriorated from 6. 16 in 2007 to 10. 2 in 2008. This is largely a result in Hershey’s large decrease in shareholder’s equity. Times kindle gain Ratio: The propagation interest earned ratio gives shows how well a company is able to pay its interest expenses with win forrader tax es. The number represents how many times over the interest expense can be paid with the earnings before interest. A higher number is favored. The ratio is calculated by dividing earning before interest and taxes (EBIT) by net interest expense. The times interest earned ratio for Hershey’s increase from 3. 87 in 2007 to 6. 03 in 2008.Hershey achieved many improvements in their financial ratios. mingled with 2005 and 2006, Hershey showed improvements in many areas. Their overall profitability improved. Liquidity also improved in all areas. This can be attributed to their ability to generate a greater amount of operational cash flows. Because of their increased liquidity, Hershey shows that they are in a better position to pay off their debts and is able to distribute their earnings to stockholders more readily. G. SPACE Matrix 2. 44, -1. 06 2. 44, -1. 06 6 5 4 3 2 1 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 -1 -2 -3 -4 -5 -6 CompetitiveIS ES CA FS Conservative fast-growing(a) defensive X 6 5 4 3 2 1 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 -1 -2 -3 -4 -5 -6 Competitive IS ES CA FS Conservative Aggressive Defensive X Financial attitude (FP) Return on Investment ROE, ROA+4 supplement+2 Earning Per Share+5 Inventory+3 Liquidity+4 Subtotal (FP) +18 Industry Position (IP) Growth potential+6 Extent leverage+5 Profit potent+5 productiveness+4 Subtotal (IP) +20 Competitive Position (CP) Market share -5 Product quality -1 Control over suppliers and distributers-2 Subtotal (CP) -8 Stability Position (SP) Barriers to entry into market-4Demand variability-6 Competitive pressure-6 Subtotal (SP) -14 x-axis = -2. 66 + 5= 2. 44 y-axis = -4. 66+ 3. 6= -1. 06 Based on this formula, it shows that The Hershey company x-axis is 2. 44 and y-axis is -1. 06. Therefore firm’s directional sender is located in the lower-right or competitive quadrant of the SPACE Matrix. In other word, The company has competitive advantages in a growing industry, The Hershey should pursue competitive strategi es which include; backward, forward and horizontal integrating; market penetration; market development and product evelopment. H. Grand Strategy Matrix quarter-circle IV business have a strong competitive position but are in a slow-growth industry. Hershey has the strength to launch diversified into more assure growth area such as India and mainland China. The company also has characteristically high cash-flow levels and moderate internal growth need as the result of 86% market share in America. I. Boston Consulting mathematical group (BCG) Matrix BCG is a private way consulting firm base in Boston. The drive of BCG Matrix is graphically shows the company’s position in terms of telling market share and industry growth.Hershey is in the Star quadrant because Hershey is leading in terms of market share in America and the growth rate sale is higher than zero for several years. As the result, the Star quadrant indicates that Hershey has good semipermanent opportunities fo r growth and profitability. To follow this position Hershey need a substantial investment especially in global market and to beef up its dominant position. Strategies that is best for Hershey includes market penetration, market development, product development, and forward, backward and horizontal integration. J.The Internal-External (IE) Matrix | | | The IFE Total burdened Score| | | | | | | | | | | | | | whole| Average| Weak| | | | | | 3. 0 to 4. 0| 2. 0 to 2. 99| 1. 0 to 1. 99| | | | | High| IFE = 3. 04 IFE = 3. 04 I| II| trinity| | | | | EFE = 3. 27 EFE = 3. 27 3. 0 to 3. 99| | | | | | | | Medium| IV| V| VI| | | The EFE Total Weighted Score| 2. 0 to 2. 99| | | | | | | | Low| VII| eighter from Decatur| IX| | | | | 1. 0 to 1. 99| | | | | | tonality: | Grow and build| | Hold and maintain| | Harvest or diverstiture|The Internal †External (IE) Matrix The IE matrix is establish on two key dimensions such as the IFE total weighted score and the EFE total weighted score. The total weighted scores allow construction of the corporate-level IE Matrix. The result from IE Matrix states that Hershey Company is appropriate for division 1 or can be described as grow and build. The most appropriate strategies for this division can be intensive market penetration, market development, and product development or company can also consider intensive backward integration, forward integration and horizontal integration.Based on the interpretation, suggest two best alternatives that the company could pursuit, then finish QSPM matrix. K. QSPM Strategic Alternatives| Key Internal Factors Weight| Alternative 1: Global elaborateness| Alternative 2: give organic fertilizer Products| Strengths| AS | TAS| AS| TAS| 1. Distribute Hershey products via Godrej’s distribution network in India| 0. 06| 4| 0. 24| 2| 0. 18| 2. Advertising expenses for promote iconic brands. | 0. 09| 4| 0. 36| 3| 0. 27| 3. Relies on special promotions| 0. 07| 3| 0. 21| 2| 0. 14| 4.The company has expanded its global presence. | 0. 08| 4| 0. 32| 2| 0. 12| 5. Hershey has special editions product that are themed with events. | 0. 06| -| -| -| -| 6. The company portfolio of healthy snacks has expanded| 0. 08| 2| 0. 16| 4| 0. 32| 7. Acquiring non-chocolate and nutritional products| 0. 09| 2| 0. 18| 4| 0. 36| 8. Products are sold to more than 2 million retail outlets. | 0. 07| -| -| -| -| 9. Hershey Centre of Health supported research on consumer preferences and process innovations. | 0. 06| 2| 0. 12| 3| 0. 18| 10. Operating profit Margin: 14% (2008) 15% (2009)| 0. 6| -| -| -| -| Weaknesses| 1. Plans to close online gift business. | 0. 06| 3| 0. 18| 1| 0. 06| 2. The company projects a reduction of 1,500 positions. | 0. 05| 2| 0. 10| 1| 0. 05| 3. Plans to discontinue Cocao Reserve brand Starbucks chocolate partnership. | 0. 06| 3| 0. 18| 1| 0. 06| 4. Hershey’s iconic brands are instantly recognized within the domestic market| 0. 06| -| -| -| -| 5. The company’s lo ng-term debt increased| 0. 05| -| -| -| -| SUBTOTAL| 1. 00| | 2. 05| | 1. 74| | Global Expansion| Develop Organic Products| Opportunities| AS| TAS| AS| TAS| 1.Organic foods products are the fastest growing sectors. | 0. 10| 1| 0. 10| 4| 0. 40| 2. Seasonal sales account for 10%| 0. 05| -| -| -| -| 3. Nestle’s image has suffered. | 0. 04| 3| 0. 12| 2| 0. 08| 4. Consumers are increasingly aware of the nutritional value. | 0. 07| 3| 0. 21| 4| 0. 28| 5. Confectionery products projected global market value of $107. 4 billion by 2010| 0. 09| 3 | 0. 27| 2| 0. 18| 6. Chocolate currently accounts for 55. 8% of the market’s overall global value. | 0. 08| -| -| -| -| Threats| 1. Mergers and acquisitions have influenced both the market share. 0. 01| 4| 0. 04| 2| 0. 02| 2. Nestle expanded nutritional product. | 0. 08| 3| 0. 24| 4| 0. 32| 3. Nestle entered the organic product segment. | 0. 08| 3| 0. 24| 4| 0. 32| 4. Cadbury manufactures a line of products with no artificial colors or flavorings| 0. 07| 1| 0. 07| 2| 0. 14| 5. Cadbury has a 71% market share in India, and 53% Australia. | 0. 06| 3| 0. 18| 2| 0. 12| 6. Mars Nutrition and Health Well being has developed low-fat and healthy snacks| 0. 07| 2| 0. 14| 3| 0. 21| 7. International wholesale sugar prices may reach 40 cent a pound| 0. 06| -| -| -| -| 8.Cocoa future contract prices in 2008 ranged from $ 0. 86 to $1. 50 per pound| 0. 05| -| -| -| -| SUBTOTAL| | | 1. 57| | 2. 07| SUM TOTAL ATTRACTIVENESS SCORE| | | 3. 66| | 3. 81| As the result of QSPM, we consider two alternative strategies As following:a) Global expansion b) Develop organic products The sum total captivating scores are 3. 66 and 3. 87. The analysis indicates that Hershey should develop organic products. L. Recommendations From the evaluations of the company’s conditions, performance, and the analysis provided from SWOT matrix, IFE-EFE matrix, and Grand strategy matrix.We recommend three specific strategies as following: 1) Expand to global market Hershey has recently market share 86% in America and it is well known in America as the chocolate maker since 1906. On the other hand, In the global market, Hershey is the third rang next to Nestle and Cadbery. Hershey needs to continue to focus on the global market. Hershey currently has a limited presence in many areas of the world. However, compare to the actual plan strategies of the company, they have begun to expand into new areas such as China and India. We are suggesting the new organization organize to Hershey Food Corporation.In this structure, we have suggested continental president, which will help to complete globally or to increase the market share globally because they will have the experience of the grouchy continents and they will work according to market conditions. The Hershey Company needs to 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 increas e the sales. For the cost of expand to global market, the company must spend more in terms of marketing that amount is indicated in the projected income statement. ) Continue chocolate partnership with coffee store, and online gift business Hershey should continue to provide new chocolate flavored coffee product in supermarkets and coffee stores. This allows Hershey to market to new segment, more consumers , and participate in new trends. Besides, Hershey should continue online gift business to get the new channel to increase the sales as well as to provide the seasonal products and the gifts that could be personalized by the consumer. 3) Develop organic product People have become much more aware of the various factors that negatively affect their health.Chocolate and other candy are viewed as an unhealthy snack. Organic food products are one of the fastest growing sectors. Therefore, Hershey needs to continue to expand the market healthy products in order to gain a greater market s hare. If Hershey continues to market the products they already have in categories and continues to develop new products that address the healthy to the public, then their revenues will increase throughout the years as the projected income statement as following. Projected financial statementsProjected The Hershey company Statements of Income| | | | | | | | | | | | | | | In thousands of dollars except| For the year ended celestial latitude 31| 2008| 2009| 2010| 2011| | | | | | | | | | Net Sales| 5,132,768| 5,298,668| 5,671,009| 6,238,110| be and Expenses 😐 | | | | | | | | | | | | Cost of sales| | 3,375,050| 3,245,531| 3,255,801| 3,402,798| | | | | | | | Selling, marketing and administrative| 1,073,019| 1,208,672| 1,426,477| 1,511,119| | | | | | | | | Business realignment and | | 94,801| 82,875| 83,433| 90,080| | impairment charges, net| | | | | | | | | | Total costs and expenses| 4,542,870| 4,537,078| 4,765,711| 5,003,997| | | | | | | | | | Income before Interest and Income T axes| 589,898| 761,590| 905,298| 1,234,113| | Interest expenses, net| | 97,876| 90,459| 96,434| 111,070| | | | | | | | | | Income before Income Taxes| | 492,022| 671,131| 808,864| 1,123,043| | Provision for income taxes| | 180,617| 235,137| 299,065| 393,065| | | | | | | | | | Net Income| 311,405| 435,994| 509,799| 729,978| Projected The Hershey Companys Balance Sheet| | | | | | | | | | all numbers in thousands)| | Period determination| 2008| 2009| 2010| 2011| | | | | | | | | | | Total Asset| | | 3,634,719| 3,675,031| 4,272,732| 4,913,642| Short term debt| | | 501,504| 39,313| 285,480| 157,014| Long term debt| | | 1,505,945| 1,502,730| 1,541,825| 1,418,479| Stockholders Equity| | | 318,199| 760,339| 937,601| 1,021,985| M. Evaluation of the recommendations based on Islamic linear perspective Islamic perspective As we know, Hershey acquires good quality of chocolate and Chocolate is do from plants, which means it contains many of the health benefits of morose chocolate.These benef its are from flavonoids , which act as antioxidants. Moreover, the other benefit that we are able to gain from chocolate such as let down Blood Pressure, Lower Cholesterol, endorphin production and so on. Allah orders us to consume good thing and try to avoid the meal that it will damage our bodies. As Allah state: ??? ???????? ????????? ?????? ???? ????????????? ??????????? ???????? ?????? ????? ??????????? ??????? Messengers! eat of the good things and do good; sure as shooting i know what you do Chapter: 23 , Verse: 51 ????????? ?????? ?????????? ?????? ??????? ??????? ???????????? ???????? ?????? ??? ??????? ???????? ??????????? eat of the licit and good things with which allah has provided you and be thankful for the favors of allah if it is he you worship Chapter: 16 , Verse: 114 Moreover, Hershey produce halal product to consumer. The ingredients that are use to produce chocolate are not the ingredient that Allah prohibit as said in book of account. ???????? ??????? ?? ???????? ??????????? ?????????? ???????? ?????????? ????? ??????? ???????? ?????? ???? ?????? ???????? ?????? ????? ????? ??????? ?????? ??????? ????????He has only forbidden you what dies of itself and blood and flesh of swine and that over which any other name than that of Allah has been invoked, but whoever is goaded to necessity, not desiring nor exceeding the limit, then for sure Allah is forgiving, merciful Chapter: 16 , Verse: one hundred fifteen Hershey also has policy to maintain and concern about environment. It was one of the companies who are in World cocoa Foundation which support environmental project. This project includes non-chemical pest management practice and encourage sustainable demesne practice to support ecosystem in the region.Allah does not love people who harm environment as said in Quran ????? ?????? ?????????? ??? ????????? ? ????? ??????? ??? ??????? ?????????????? â€Å"Seek not mischief in the land, for Allah loves not those who do mischief. â₠¬Â (Quran 28:77) jibe to scientists and philosophers, man is considered as the major factor in disturbing the natural balance of the universe. Man interferes intentionally or unintentionally in the earths ecosystems by impairing its perfect order and precise sequence. However, it seems that man has cut off his nose to spite his face and he now is the victim. Grave dangers are anifested in pollution of the air, water, soil, outer space and others, as well as the irrational developing of the environments resources, and inconsistent distribution of human settlements. All these factors have lead to different problems, all of which are marked by a disturbance to the earths natural balance. If companies or industries proceeding or use up natural materials and environment, all damage will drive away back to them. As promised Quran. ?????? ?????????? ??? ???????? ??????????? ????? ???????? ??????? ???????? ???????????? ?????? ??????? ???????? ??????????? ??????????? Mischief has appea red on the land and sea, because of (the need) that the hands of man have earned, that (Allah) may give them a penchant of some of their deeds: in order that they may turn back (from evil). ” (Quran 30:41) REFFERENCES About Hershey. Retrieved on 02/02/12. From: http://www. thehersheycompany. com/about-hershey. aspx â€Å"Chocolate is good for you. ” Chocolate Trading Co. July 13th, 2005 November 1st, 2007. Financial Report. Retrieved on 02/02/12. From: http://www. thehersheycompany. com/ investors/financial-reports. aspx. Fred R. David, â€Å"Strategic Management: Concept and Cases, Hershey Companyâ€2009” 13th Edn.Page 111-119. Pearson Education, 2011 Halal and Haram Foods according to Quran. Retrieved on 02/02/12. From: http://www. parsquran. com/eng/subject/halal. htm Karem S. Ghoneim (Prof. ), Quran Recitations : The Quran and the purlieu . Retrieved on 02/02/12. From: http://www. whyquran. com/877/content/blogsection/0/98/9/18/ Mark Stibich, Health Be nefits of Chocolate. Retrieved on 02/02/12. From: http://longevity. about. com/od/lifelongnutrition/p/chocolate. htm agreement’s key Competitors. Retrieved on 02/02/12. From: www. foodproductiondaily-usa. com |\r\n'