Hersheys\' chocolate and cocoa industry General Administration (Firm Infrastruct
ID: 349017 • Letter: H
Question
Hersheys' chocolate and cocoa industry
General Administration (Firm Infrastructure) Discuss Hershey's company’s general administration/infrastructure.
What company functions are associated with firm infrastructure?
Discuss the organizational culture of Hershey's. (( Consider such things as its decision-making process (centralized or decentralized), its degree of formalization (lots of rules or empowered employees), its working environment, etc.))
Discuss how these functions and activities are performed.
Discuss the leadership of Hersheys. (For example: how long has the senior leadership been in place? Does the senior leadership of your company have a track record with your company or with a previous company and what is that record? What sort of leadership does your senior leadership practice? Is your senior leadership risk taking or risk averse in their actions? Etc.)
Discuss the sort of ethical reputation Hershey has? Does Hershey have effective guidance regarding appropriate ethical conduct? Has Hershey faced accusations of ethical misconduct? Etc.
discuss how value is added (a strength) and how Hershey infrastructure is detrimental/harmful to your company (a weakness). and company’s infrastructure, summarize Strengths and Weaknesses below. S&Ws MUST be derived from the above description of this activity.
Strengths: Summarize your strengths
Weaknesses: Summarize your weaknesses
Explanation / Answer
General Administration (Firm Infrastructure) Discuss Hershey's company’s general administration/infrastructure.
he Hershey Company Introducing the World of Chocolate
examines the remarkable successes and failures of TheHershey Company, the largest North American manufacturer of chocolate and sugar confectionery products, in its constant pursuit to maintain growth and profitability in a competitive industry dominated by only a few giant confectionery corporations. Through careful analysis and thorough research, The Hershey Company Introducing theWorld of Chocolate will provide a clear and concise assessment of how The Hershey Company came to be a global corporate giant, how it has maintained its dominant position in the industry, and where the company is going in the near future. Markesha McCants, Nicole Frye, Jessica Miller, Manon Polk, and George Rogers. The book authors retain sole copyright to his or her contributions to this book. ISBN 978-1-60585-999-6This report is in association to the capstone project issued by The University of Tennessee MBA program satisfying credit for the Management/Accounting 790, Strategic Management & Business Policy course. The Hershey Company- Introducing the World of Chocolate
Milton Hershey sought not only to build a company, but also to build a community. He believed that workers worked better under pleasant working conditions and pleasant surroundings. For this reason, Hershey built an infrastructure to take care of his workers. This infrastructure was accompanied with a department store, convention hall, and lots of schools. ³In a long and useful life, Milton S. Hershey proved himself to be a courageous entrepreneur, a determined builder and a compassionate humanitarian´
American producer of chocolate, Hershey performs poorly in the international community. Currently, the company’s presence is limited to Brazil, Canada, Mexico, and the United States (www.investopedia.com). The Hershey Company’s infrastructure has weakened considerably in the past decade. The company has experienced a weak connection between Mexican operations and U.S. operations. This is further fueled by the fact that Hershey has become increasingly dependent on Mexican production. This is primarily due to the increasing production costs associated with U.S. production
What company functions are associated with firm infrastructure?
Operations
Hershey's operations consist of two business segments (North America; and International and Other), in which more than 80 name brands are made, marketed, sold, and distributed. Many product types sold under the Hershey's, Kisses, and Reese's names are included in the company's chocolate business unit. Other popular brand franchises -- such as Twizzlers, Mounds, York, Kit Kat, Ice Breakers, and Bubble Yum -- fall within the company's sweets and refreshment business unit.
Geographic Reach
Hershey has two reportable segments: North America and International and Other. North America is the largest segment (accounting for 88% of the total revenue) and caters to the traditional chocolate and non-chocolate confectionery market, as well as grocery and growing snacks markets, within the US and Canada.
International and Other (12%) has operations in China, Mexico, Brazil, India, and Malaysia, primarily for consumers in these regions. The segment also distributes and sells confectionery products in export markets within Asia, Latin America, Middle East, Europe, Africa and other regions. It also includes global retail operations, including Hershey's Chocolate World stores in Hershey, Pennsylvania; New York; Las Vegas; Shanghai; Niagara Falls (Ontario); Dubai; and Singapore, as well as operations associated with licensing the use of certain of Hershey's trademarks and products to third parties around the world.
Sales and Marketing
Among its significant customers, wholesale distribution giant McLane Company accounts for 25% of Hershey's sales each year. It's the primary distributor of Hershey products to Wal-Mart. Hershey leverages a staff of full-time sales representatives and food brokers to peddle its products to customers. In general the confectionery company counts wholesale distributors, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores among its vast customer set. Hershey's distribution network ships its products from its manufacturing plants to strategically located distribution centers, using common carriers to deliver products from there to customers.
Financial Performance
Hershey achieved historic growth in 2016, with revenues peaking at a record-setting $7.44 billion. The growth was driven by higher North America volumes, largely in products supported by increased high-profile promotional programming such as NCAA March Madness, the Summer Olympics, and NCAA Football College Game Day. It was also helped by new product launches for Snack Mix, Snack Bites, and Hershey's Cookie Layer Crunch bars.
Discuss the organizational culture of Hershey's. (( Consider such things as its decision-making process (centralized or decentralized), its degree of formalization (lots of rules or empowered employees), its working environment, etc.))
Charitable or seasonal altruism can seem as though it is a selfless act, but they are also a significant driver of organization’s culture, identity and employee morale. Benevolent barons like Ford, Carnegie, and Rockefeller established foundations with large donations meant to carry on their legacy forever. With an unprecedented amount of wealth, these patrons build a sustainable platform for global growth, deliver exceptional shareholder value, and strengthen the corporate image and reputation. One such company, honoring the legacy of its founder is The Hershey Company or commonly known as Hershey’s that ranks as one of America’s best corporate citizens due to its global Corporate Social Responsibility (CSR) efforts.
Charitable or seasonal altruism can seem as though it is a selfless act, but they are also a significant driver of organization’s culture, identity and employee morale. Benevolent barons like Ford, Carnegie, and Rockefeller established foundations with large donations meant to carry on their legacy forever. With an unprecedented amount of wealth, these patrons build a sustainable platform for global growth, deliver exceptional shareholder value, and strengthen the corporate image and reputation. One such company, honoring the legacy of its founder is The Hershey Company or commonly known as Hershey’s that ranks as one of America’s best corporate citizens due to its global Corporate Social Responsibility (CSR) efforts.
Discuss how these functions and activities are performed.
Discuss the leadership of Hersheys. (For example: how long has the senior leadership been in place? Does the senior leadership of your company have a track record with your company or with a previous company and what is that record? What sort of leadership does your senior leadership practice? Is your senior leadership risk taking or risk averse in their actions? Etc.)
Discuss the sort of ethical reputation Hershey has? Does Hershey have effective guidance regarding appropriate ethical conduct? Has Hershey faced accusations of ethical misconduct? Etc.
discuss how value is added (a strength) and how Hershey infrastructure is detrimental/harmful to your company (a weakness). and company’s infrastructure, summarize Strengths and Weaknesses below. S&Ws MUST be derived from the above description of this activity.
Strengths: Summarize your strengths
Weaknesses: Summarize your weaknesses
Customer Segments
Hershey manufactures, markets, and distributes a range of chocolate and confectionery products, intended for consumption by the mass consumer market. While the Company does sell products directly to consumers online and in physical stores, it principally reaches the general consumer market indirectly via sales to customers in the following segments:
The majority of Hershey’s customers resell the Company’s products to end-consumers in retail outlets in North America and other locations worldwide. In 2015 approximately 26% of the Company’s consolidated net sales were made to McLane Company, one of the largest wholesale distributors in the US to convenience stores, drug stores, wholesale clubs and mass merchandisers, and the primary distributor of Hershey products to Wal-Mart Stores.
Hershey’s principal market is its native US. The Company, however, serves a global customer base, marketing and distributing its products across Asia Pacific, Latin America, Europe, Africa, and the Middle East.
Value Propositions
Hershey provides value to its customers in the following ways:
Channels
Hershey operates a website at www.thehersheycompany.com, through which it provides information on its various brands, products, operating locations, and corporate activities. The Company also operates an online store at www.hersheysstore.com, where consumers are able to purchase a range of Hershey products – including flagship brands such as Hershey’s, Reese’s and Twizzlers – as well as Hershey-branded merchandise, such as homeware, apparel, and toys. Additionally, Hershey sells products directly to consumers through its physical network of Hershey Chocolate World locations across the US, as well as in Dubai, Shanghai, and Singapore.
The majority of Hershey’s sales are made to retailers and distributors via the Company’s in-house direct sales force, which is organised by geographic regions and product line. These sales personnel operate out of the Company’s offices across North America, Latin America, Asia Pacific, and the Middle East, including in China, the United Arab Emirates, Brazil, the Philippines, and Mexico.
Hershey’s sales channels are supported by its own extensive manufacturing and distribution infrastructure, which spans a number of countries across all of its operating regions. The Company’s infrastructure facilitates the shipment of its products from manufacturing plants to strategically located distribution centres around the world, form which the Company primarily utilises the services of third party common carriers to deliver products to customers.
Customer Relationships
Hershey offers a full range of products to general consumers on a self-service basis through its online store, which allows customers to browse its catalogue of products and merchandise, place orders, track deliveries, and manage accounts without interacting with members of the Company’s sales and support personnel. The Company’s chain of physical retail outlets also provides a largely self-service experience, with sales representatives also available to offer personal assistance and complete purchases.
Hershey’s direct sales force works closely with its retail and distribution customers, who are frequently afforded their own account management teams and executives, who maintain regular contact with the Company’s customers. The Company negotiates contract terms directly with clients, in order to efficiently cover their individual requirements. By providing personal care to its customers, Hershey seeks to establish longstanding business relationships.
Hershey provides customer support to consumers through its online Customer Care portal, where consumers are able to access information on shipping and returns, ordering and payment, and FAQs, or can contact support directly for personalised care through an online contact form.
Additionally, Hershey operates several social media accounts – including with Facebook, Twitter, LinkedIn, YouTube, and Instagram – through which customers can interact with the Company directly.
Key Activities
Hershey is a manufacturer, marketer, and distributor of chocolate and non-chocolate confectionery items. The Company offers a broad portfolio of products, including gum and mint refreshment products; and pantry items, including baking ingredients, beverages, spreads, meat snacks, bars, and snack bites.
Hershey aligns its operations into two reportable business segments: North America, which is responsible for the Company’s chocolate and sugar confectionery business, as well as its grocery and snacks business, across the US and Canada; and International and Other, which is responsible for the Company’s operations across all other jurisdictions where the Company manufactures, imports, markets, sells or distributes chocolate and non-chocolate confectionery products. Hershey markets, sells and distributes its products under approximately 80 brand names – including Hershey’s, Reese’s Jolly Rancher, and Kit-Kat – in more than 70 countries across the Americas, Europe, Asia Pacific, Africa, and the Middle East.
Key Partners
Hershey works in conjunction with a range of companies and organisations in the manufacture and distribution of its products. These partners include: