The marketing strategies are significant part of every company and further these strategies are needed to boost profitability internationally. Hershey’s food company has been taken in the task to outline and discuss the significance and role of marketing strategies. Hershey’s is one of the biggest and well known brand in the chocolate and food industry who is offering various food products globally. The mission statement, vision and core values of Hershey’s have been discussed in the task briefly. The paper further explains that various strategies such as business level strategy, functional level strategy and corporate level strategy that help the company to be a leader in the global market. Pestle analysis, SWOT analysis and porter five forces analysis have been drawn in the task.
Hershey Company is well known food Corporation which is incorporated in 1894 with its headquartered is situated in Hershey, Pennsylvania that is also a home to Hershey’s chocolate world (Thehersheycompany, 2018). It is stated that Hershey’s is available around the United States, due to their mass network of distribution. It has been noted that Hershey brands are loved and liked globally. The main products of Hershey include Licorice candy, spreads snacksters, dark Cocoa, soft cream candy, cookie layer crunch bar and dark chocolate peanut butter cups. The company provides chocolates at reasonable prices and progressive workplace to the employees for performing tasks and duties effectively. It is studied that the firm has started with humble roots and a simple and unique five –cent Hershey’s bar but now the company makes more than 80 brands that are enjoyed across the globe including Hershey’s kisses cups. Reese’s Peanut butter cups and Hershey’s milk chocolate bars. Hershey’s has 18,000 considerable employees spread all over the world and further the company has shared a unique and effective passion for helping and supporting (Thehersheycompany, 2018). The organization brings goodness by helping vibrant societies, committing to sustainable and effective business practices and supporting children in need and build bright and dynamic future for them.
Mission and vision
The main mission of the company is to bringing sweet moments of happiness to everyone in the world every day. The core values of the firm include collaborate, develop, question, innovate, inspire and honesty. The main vision of Hershey is to boost and maximize the profitability and sales by rendering tasty chocolates to the customers across the world. The firm continues to explore and expand the sales and manufacturing locations in the world. Along with this, the firm is interconnected with the Giant center and Hersheypark stadium. The products of the firm are being sold in more than 60 countries in the global market.
Internal and external audit of Hershey’s
It is stated internal and external audit are essential to gain competitive benefits and to maximize revenue and outcomes globally (Kyriakidou, Chipouras, Katsianis and Sphicopoulos, 2010). There are enormous external and internal factors that may affect the long term growth and success of the firm. The internal audit helps Hershey’s to accomplish its objectives and goals by using dynamic strategies (Chirla and Funar, 2010). On the other hand, external audit is also essential to analyze and evaluate the risks and challenges of the market internationally (Ahmed and Rafiq, 2013). Various techniques or methods are being used by the company to prevent identify internal strengths and external challenges and issues widely. Some of the techniques have been discussed below.
SWOT analysis for Hershey’s Company is discussed below.
· Hershey’s is one of the biggest and unique chocolate producers of North America. Thus, it helps in building good image in the minds of the customers.
· Strong and unique brand name and awareness.
· Strong and unique public image through the school for orphan kids.
· Promotions and advertisement by contributing in various segments.
· Well know brand for its chocolates.
· The company uses effective supply chain technology and resources.
· Unique customer loyalty (Mbaskool, 2018).
· Online advertising and marketing
· There is high and intense competition in the global market.
· Limited market share due to stiff competition.
· Increased geographic coverage leading to lesser and dilution authority (Mbaskool, 2018).
· Newer product, technology and innovations
· International expansion and development can maximize business sales and market share.
· Improvement and enhancement in distribution (Mbaskool, 2018).
· Rising prices of sugar and milk.
· Changes in customer preferences and tastes
· Intense and high competition in this category (Mbaskool, 2018).
· Increasing concerns of health and further increasing occurrences of diabetes and obesity.
Porter five forces analysis
The porter five forces analysis helps in striving with competitors in the global market. It also helps analyzing and measuring the position of competitors internationally. The porter five forces analysis for Hershey has been discussed below.
Threats of new entrants: There is a low threat of new competitors in the chocolate and cocoa product industry just because of the presence of economy of scale, the need for large and wide capital needs and requirements, the differences and similarities in the products, lack of access to distribution and advertisement channels, the presence of switching costs and rules and legislations that are placed for product manufacturers. Thus, it is noted that there is less possibility of new entrants in the competitive market (Belz and Schmidt?Riediger, 2010).
Bargaining power of buyers: The bargaining power is low in the hands of buyers. Buyers are generally a demanding lot for chocolate products. They want to buy the best food products at minimum prices. This put high pressure on the company profitability and effectiveness in the long run. Thus, bargaining power is low which helps in maximizing the profitability and outputs of Hershey’s. The company needs to focus and analyze the tastes, preferences and choices of the buyers for increase the sale and revenue globally. Therefore, the bargaining power is low to moderate just because the company is providing diversified products to the customers across the globe.
Bargaining power of suppliers: It is stated that bargaining power of suppliers is decreased because the industry is a significant and unique customer of the supplier group and vendors do not pose any kind of threat of forward integration. It is stated that bargaining power is moderate to high because the suppliers often concentrated on the products and services; there are no any substitute products in the global market. There is a great significance of the supplier’s products in the international market. The suppliers in dominant position can reduce the margins in the global market. The powerful and strong suppliers in food sector use their negotiating power to extract high prices from the company in confectioner’s field.
Threats of substitute’s products and services: When new and innovative chocolate products meet a similar customer wants requirements and needs in various then company’s profitability and growth suffer. Threat of substitute is high in the food industry, hence it may influence the position and goodwill of the firm adversely (Mutunga and Minja, 2014).
Rivalry among the existing competitors: If the competition among the existing leaders in an industry is high and intense then it exercise down prices and reduce the overall profitability of the firm. The company operates and manages business in a very competitive manner. Rivalries may put direct impact on the long term objectives and goals which are set by Hershey’s in the competitive market.
Pestle analysis helps the company to identify and measure the external risks and issues. Hershey’s uses pestle analysis to stand out over the rivalries globally. The pestle analysis for Hershey’s has been discussed below.
Political factor: In today’s competitive world, the company has begun to focus on the healthy eating habits of the customers widely. It is a direct result to the maximized instances of diseases interconnected to poor and ineffective eating habits, like diabetes, heart disease and cancer. It may affect the market share of Hershey’s in the global market. This causes a high and great threat to the cocoa and chocolate industry. Along with this, Hershey’s needs to focus on the various rules, regulations and policies to overcome the rivalries in the marketplace (Nestle, 2013).
Economic factor: It is analyzed that Gasoline has been maximizing at a higher rate in the past few years which is becoming a great threat for the firm. This trend is going continue in today’s competitive world for many years such as natural disasters minimizing supplies in the marketplace (Porter, 2011). This is affecting the Hershey’s business activities in multiple manners. First, the transportation and production prices would maximize as gasoline prices increase. Along with this, the gasoline prices increase then the demand for ethanol would also rise high. It is noted that sugar is one of the important ingredients for generation of ethanol. Thus, as need for ethanol rises then sugar demand will also increase. The extra demand for sugar for some other purposes either maximizes the prices of the products or decreases the sugar supply to the chocolate industry. Both these effects may put direct impact on the profit and sales margin of Hershey’s Company (Christiansen, 2014).
Socio-cultural factor: It has been analyzed from the various studies that customers constantly change their tastes, preferences, desires and choices for chocolate products and services. It is further noted that the customers also want a high variety of chocolate and food products (Brežná, Piknová and Kuchta, 2009). This enables the company to expand and explore their product lines to fulfill the new needs, requirements and wants of the customers along with this, it also provides a good opportunity for greater sales and revenue of the new and innovative products. The organization needs to identify and measure the tastes and preferences of the customers for maximizing the outcomes in the international market.
Technological factor: It is noted that high and innovative technology is used by the company to compete with rivalries globally. In today’s globalization world, Hershey’s needs to focus on the technology and resources for enhancing the sale and production of food products in the global market ( Aurand, 2013).
Legal factor: The legal factors such as rules, regulations and policies which are made by the government also put direct impact on the targets and progress of Hershey’s in a large extent. Before initiating the business, the company needs to focus on the legal factors effectively and successfully (Schuldt, Muller and Schwarz, 2012).
Environmental factor: The environmental factors such as weather, climate changes and globalization may also put adverse impact on the production and sale of Hershey’s. All these environmental factors shall be analyzed and identified by the company to produce new and innovative products globally (Pomeranz, 2013).
Current business strategies of Hershey’s
There are ample of strategies that being used by the company in today’s competitive world. Some of the current business strategies have been described below.
Business level strategy: It is noted that the company uses ample of business strategies to meet the long term requirements of the customers. One of the biggest strategies that used by the firm is differentiation strategy. Hershey’s uses a differentiation strategy instead of a cost leadership approach to beat the competitors (Bacanu, 2010). It focuses on the prices, plans and policies of the rivalries to distinguish its products in the competitive market. A market research and survey is done by the firm to analyze and determine the choices, tastes and requirements of the key target audience (Saltini and Akkerman, 2012). Hershey’s focuses on the quality of the products and tastes of the customers instead of prices. This strategy helps to attain maximum level of outputs in the market (David, 2011).
Corporate strategy: Hershey’s Company is considered a single business, the lowest level of diversification because their main concentration on the confectionery products and services. The company has a wide range of food and chocolate products but they do not have a wide array of business units (Bonn and Fisher, 2011). It is stated that diversification strategy being implemented by the company to make a good image in the international market. The firm has developed this strategy for successful sales and marketing. Hershey’s uses two different diversification strategies such as dominant business diversification strategy and single business strategy. Hershey’s uses diversification strategy seeks to be a player in the niche market. It helps in attracting and retaining wide range of customers with the help of this strategy. Along with this, the company uses growth strategy to get more and more revenue from the sale of chocolate and food products. In this strategy, the company focuses on the major areas of growth and success through which it can enhance and boost its profitability widely (Leonard, 2018).
Functional level strategy: One of the largest and unique strategies that initiated by the firm is functional level strategy. It is considered the bottom line of strategy where the company begins to think about the multiple departments within the business and how they would work together to reach objectives and goals (Manza, 2014). At functional level strategy, the company focuses on the marketing, finance, information management, human resource management and public relations (Aya?, Samanlioglu and Büyüközkan, 2013). By implementing this strategy, the firm has been able to run the business activities and operations successfully and effectively. A sustainable and effective human resource management is exercised to make dynamic policies and strategies within the organization. With effective functional level strategy, Hershey’s can easily grow and survive its business actions and activities widely (Freemanagementbooks, 2018).
International level strategy: The Company uses international level strategy such as porter diamond model to stay in the competitive market. The porter diamond model for Hershey’s has been detailed below.
Porter diamond model
Factor condition: Under this factor, the company focuses on the various production elements such as infrastructure, resources and knowledge. These factors are relevant elements for competitiveness in specific food industry. These elements can be categorized into various material resources such as human resources, costs, knowledge and infrastructure. By using this strategy, Hershey’s could able to strive with the competitors globally.
Related and supporting industries: The success of an effective and dynamic market depends on the presence of the suppliers and related industries in the global market. Competitive vendors internationalization and reinforce innovation. Apart from this, suppliers related to food industry are also significant for the company. By using this strategy, Hershey’s Company has been able to identify potential suppliers and other rivalries in the marketplace. Further, this strategy also helps in differentiating company’s products from the rivalries (Pawar and Veer, 2013).
Home demand condition: In this factor, Hershey determines and analyzes the economies of scale, market size, growth, transportation costs and trends of the market. By initiating this strategy, it is a wider scope to maximize outputs and returns internationally.
Strategy, structure and rivalry: This factor is interconnected to the manner or route in which a company in managed and controlled its corporate goals and objectives and analyze the competitors within its own organizational culture. Culture aspects play a significant and empirical role in this. The main competitors of the firm include Galaxy, Mars, Nestle and Carburys that may impact directly on the productivity and efficiency of Hershey’s Corporation. Effective and dynamic strategies are made by the company to struggle with rivalries globally.
Government: The government plays a strong and powerful role in promoting and encouraging the development and expansion of food industries because it provides finance to food companies. Thus, the company can be influenced by granting financial incentives and some other subsidies.
Change event: Change events are being considered by Hershey to gain various competitive advantages internationally (Ismail and Yusop, 2014).
There are enormous suggestions that can be beneficial for the firm while initiating the business successfully; some of the recommendations have been drawn below.
- It is recommended that Hershey’s Corporation shall focus on the prices of the competitor’s products to attain maximum outputs and returns globally.
- Promotional and advertisement strategies shall be used by Hershey’s to promote and improve the quality of food and chocolate products widely.
- It is further suggested that Hershey’s must focus on the differentiation strategy to build and improve the financial image in the competitive market.
- Marketing mix must be used by the company to stay in the global market. Marketing mix strategy covers price, product, place, promotion, physical evidence, process and people. This strategy helps in minimizing the prices of the products widely.
- Customer feedback must be collected by the firm to improve the quality of chocolate products. By gathering feedback and reviews, the company can easily sell its products globally further it will also help to resolve and handle the queries and complaints of the customers.
- A marketing survey and research shall be conducted to minimize the challenges, threats and risk of the market and competitors.
It is evident from the above mentioned discussion that Hershey is a number one brand in the global market who is producing chocolate and food products. In today’s era, the firm is maximizing and enhancing revenue and profitability by rendering tasty and delicious products to the customers all over the world. The firm uses innovative strategies such as pestle analysis, SWOT analysis and porter five forces analysis to maximize the scope of growth and development. Along with this, Hershey’s also uses various corporate and business level strategies to carry out the business successfully.
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