Hershey Foods Corporation

HERSHEY FOODS CORPORATION
Strategic Planning




Introduction

In this report we are going to present an evaluation of the strategic planning of the Hershey Food Corporation based on the information of the 1,999 year. We also are going to evaluate the company performance of the actual company strategies and also the operation area; finally we will like to propose some recommendations toimprove the company performance looking forward achieving the established objectives.


Three main parts constitute the present report:

I. Formulation stage
a. Company profile
b. Vision and Mission statements
c. Code of ethics
d. External Audit
e. Competitive profile
f. Internal Audit
g. Long-term objectives
h. Strategic options

II. Implementation stage
a. Management issues
b.Annual Objectives
c. Policies
d. Financial Analysis

III. Evaluation stage
a. Strategy review
b. Keep track model


Finally we would like to close this report by giving a conclusion about the company performance and the future course of their strategic actions.






I. Formulation stage

a. A company profile


Hershey has grown from a one-product, one plant operation in 1894to a $3,9 billion company producing an array of quality chocolate, non-chocolate confectionary products and grocery products

Hershey Foods Corporation is the largest maker of chocolate candy in the country. However, competition exists so they do not have absolute control over the market. Although this competition partially controls Hershey, it still has some power to its own prices andstrategies Hershey has expanded into other markets. Its diverse product line now includes bags of candy, chocolate syrup, cocoa, non-chocolate candy. New products are constantly being added to this diversified list through new product development and the acquisition of smaller candy companies such as Cadbury, Leaf, and Henry Heide Beginning in the 90's, however, Hershey has pulled ahead of Mars.

Theyhave gone back to focusing on their basic products while still introducing new products. It has also increased advertising of "core brands" and for new items the main industry for Hershey is the candy industry. In the candy market, "the bar segment of the market accounts for about 40% of retail sales [and] loosely packed bags of candy are next with about 35% of the market". This market is anoligopoly. A few large firms dominate this market. The four largest companies that have about 75% of the market share in order are Hershey, Mars, Nestlé, and Brach. In the candy industry, one of the most important parts is advertising. Hershey has always spent a lot on advertising.
The Corporation's products are sold primarily to grocery wholesalers, chain grocery stores, candy distributors, massmerchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, concessionaires and food distributors by full-time sales representatives, food brokers and part-time retail sales merchandisers throughout the United States, Canada and Mexico. The Corporation believes its products are sold in over 2 million retail outlets in North America. In 2000, sales to Wal-Mart Stores,Inc. and Subsidiaries amounted to approximately 17% of the Corporation's total net sales. In Japan, the Philippines, Korea and China, the Corporation imports and/or markets selected confectionery and grocery products. The Corporation also markets confectionery and grocery products in over 90 countries worldwide.
The most significant raw material used in the production of the Corporation'schocolate products is cocoa beans. This commodity is imported principally from West African, South American and Far Eastern equatorial regions. West Africa accounts for approximately 70% of the world's crop. Cocoa beans are not uniform, and the various grades and varieties reflect the diverse agricultural practices and natural conditions found in the many growing areas. The Corporation buys a mix of...