Hershey Foods Corporation: Bitter Times in a Sweet Place SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hershey Foods Corporation: Bitter Times in a Sweet Place
The proposed sale of Hershey Foods during the summer of 2002 captured headlines and imaginations. Six months after making its decision to explore a potential sale, the board of the Hershey Trust Company was examining two serious offers: a joint bid from Cadbury Schweppes PLC and Nestle S.A. and an independent bid from the Wm. Wrigley Jr. Company. In essence, the board faced both an economic and a governance decision. On the economic side, the board needed to determine the value of Hershey as a stand-alone entity compared with the bids being offered. On the governance side, the board needed to decide whether selling Hershey compromised the board's original mandate from Milton Hershey.
Authors :: Kenneth Eades, Sean Carr, Sam Weaver, Gustavo Rodriguez
Swot Analysis of "Hershey Foods Corporation: Bitter Times in a Sweet Place" written by Kenneth Eades, Sean Carr, Sam Weaver, Gustavo Rodriguez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hershey Board facing as an external strategic factors. Some of the topics covered in Hershey Foods Corporation: Bitter Times in a Sweet Place case study are - Strategic Management Strategies, Financial analysis, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Hershey Foods Corporation: Bitter Times in a Sweet Place casestudy better are - – cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , geopolitical disruptions, wage bills are increasing,
there is increasing trade war between United States & China, increasing energy prices, etc
Introduction to SWOT Analysis of Hershey Foods Corporation: Bitter Times in a Sweet Place
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hershey Foods Corporation: Bitter Times in a Sweet Place case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hershey Board, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hershey Board operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hershey Foods Corporation: Bitter Times in a Sweet Place can be done for the following purposes –
1. Strategic planning using facts provided in Hershey Foods Corporation: Bitter Times in a Sweet Place case study
2. Improving business portfolio management of Hershey Board
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hershey Board
Strengths Hershey Foods Corporation: Bitter Times in a Sweet Place | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hershey Board in Hershey Foods Corporation: Bitter Times in a Sweet Place Harvard Business Review case study are -
High brand equity
– Hershey Board has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hershey Board to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Hershey Board is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Hershey Board is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Kenneth Eades, Sean Carr, Sam Weaver, Gustavo Rodriguez can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Finance & Accounting industry
– Hershey Foods Corporation: Bitter Times in a Sweet Place firm has clearly differentiated products in the market place. This has enabled Hershey Board to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Hershey Board to invest into research and development (R&D) and innovation.
Organizational Resilience of Hershey Board
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hershey Board does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Hershey Board in the sector have low bargaining power. Hershey Foods Corporation: Bitter Times in a Sweet Place has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hershey Board to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Hershey Board is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Hershey Board is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hershey Foods Corporation: Bitter Times in a Sweet Place Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Hershey Board has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Hershey Board are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Hershey Board has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Hershey Foods Corporation: Bitter Times in a Sweet Place - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Hershey Foods Corporation: Bitter Times in a Sweet Place Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Hershey Board digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hershey Board has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Hershey Foods Corporation: Bitter Times in a Sweet Place | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hershey Foods Corporation: Bitter Times in a Sweet Place are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hershey Foods Corporation: Bitter Times in a Sweet Place, is just above the industry average. Hershey Board needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As Hershey Foods Corporation: Bitter Times in a Sweet Place HBR case study mentions - Hershey Board takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Hershey Board is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Hershey Board needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hershey Board to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hershey Board is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hershey Foods Corporation: Bitter Times in a Sweet Place can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Hershey Board has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Hershey Board even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hershey Foods Corporation: Bitter Times in a Sweet Place, in the dynamic environment Hershey Board has struggled to respond to the nimble upstart competition. Hershey Board has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Hershey Board, firm in the HBR case study Hershey Foods Corporation: Bitter Times in a Sweet Place needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Kenneth Eades, Sean Carr, Sam Weaver, Gustavo Rodriguez suggests that, Hershey Board is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study Hershey Foods Corporation: Bitter Times in a Sweet Place that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Hershey Foods Corporation: Bitter Times in a Sweet Place can leverage the sales team experience to cultivate customer relationships as Hershey Board is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Hershey Board needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Need for greater diversity
– Hershey Board has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Hershey Foods Corporation: Bitter Times in a Sweet Place | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Hershey Foods Corporation: Bitter Times in a Sweet Place are -
Creating value in data economy
– The success of analytics program of Hershey Board has opened avenues for new revenue streams for the organization in the industry. This can help Hershey Board to build a more holistic ecosystem as suggested in the Hershey Foods Corporation: Bitter Times in a Sweet Place case study. Hershey Board can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hershey Board in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hershey Board can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Hershey Foods Corporation: Bitter Times in a Sweet Place, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Hershey Board to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hershey Board can use these opportunities to build new business models that can help the communities that Hershey Board operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Loyalty marketing
– Hershey Board has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hershey Board in the consumer business. Now Hershey Board can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Hershey Board can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Leveraging digital technologies
– Hershey Board can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Hershey Board to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Hershey Board has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Hershey Foods Corporation: Bitter Times in a Sweet Place - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hershey Board to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Hershey Board can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hershey Foods Corporation: Bitter Times in a Sweet Place suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hershey Board to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Hershey Board to hire the very best people irrespective of their geographical location.
Threats Hershey Foods Corporation: Bitter Times in a Sweet Place External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hershey Foods Corporation: Bitter Times in a Sweet Place are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hershey Board with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hershey Board can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Hershey Foods Corporation: Bitter Times in a Sweet Place .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Hershey Board business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Hershey Board is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Hershey Board.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hershey Board can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Hershey Board will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Hershey Board needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Regulatory challenges
– Hershey Board needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
High dependence on third party suppliers
– Hershey Board high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Environmental challenges
– Hershey Board needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Hershey Board can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Hershey Board in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Hershey Foods Corporation: Bitter Times in a Sweet Place Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Hershey Foods Corporation: Bitter Times in a Sweet Place needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Hershey Foods Corporation: Bitter Times in a Sweet Place is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Hershey Foods Corporation: Bitter Times in a Sweet Place is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hershey Foods Corporation: Bitter Times in a Sweet Place is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Hershey Board needs to make to build a sustainable competitive advantage.
