Hershey Food Corporation Paper

 

 

INTRODUCTION
Hershey must sustain their long availed North American market share while exploring untapped world markets. For this purpose it needs to devise revitalized strategies for the market development. Given the resources Hershey has at its disposal, it can avail the opportunities in Asia for market development. Hershey’s niche market is the premium priced consumer. It can easily use its brand equity to create superior value perceptions in the minds of the consumers. However, due to the various factors such as increased competition from Nestle and Mars, increased cost structures and decreasing sales trends, loss of employee morale, Hershey needs to revise its strategies for development of markets. Following are some of the market development strategies that may be followed to achieve future profits, increased revenues and their sustenance.

TARGETING ASIAN MARKETS
Hershey has the opportunity to expand into Asia and gain significant market share there. Presently, there is very low competition in the candy market in Asia. It also can avail the advantages of being the first mover to fully expand into Asia. The aging Asian population should be initially the target in its expansion. World health conscious people form a formidable market for possible Hershey’s products. Such products need to be developed.

TARGETING OLD AGE MARKET FOR NUTRICIOUS PRODUCTS
Hershey can take advantage of the aging population of the world. It should develop more nutritious products which exactly cater to the energy needs of the elderly. Hershey should capitalize on this phenomenon by developing products geared toward older people. Research should be conducted initially to find out the cost benefits of the provision of such products.

SERIES OF PRELIMINARY RESEARCH OF FOREIGN MARKETS
Hershey should embark on the development and conduction of a series of preliminary research studies of foreign markets to know the subtle cultural variations in Asian markets. This information can be vital for the product development for these countries as the trends and tastes vary from culture to culture. Such a system of report generation should be done on a continuous basis. Comprehensive foreign market research can reduce the costly political and economic risks attached to the venture.

STRATEGIC ALLIANCES OR JOINT VENTURES IN FOREIGN MARKETS
Hershey should initially utilize the expert knowledge of the domestic corporations in the foreign countries by making strategic alliances or getting into joint ventures with them. Hershey has the options of cooperative arrangements that include research and development partnerships, cross distribution agreements, cross licensing agreements and cross manufacturing agreements. It can also avail the advantages of joint ventures. A joint venture occurs when two or more companies form a partnership or consortium for the purpose of capitalizing on some opportunity.

MARKET RSEARCH & DEVELOMENT
There is an urgent need to finance and redefine the importance of Research & Development. Hershey paid fewer dividends and funded R&D, it could eventually lower the cost of goods sold as it moved along the experience curve and ultimately raise the gross profit margin. Hershey has not been using its profits properly by paying a significant portion of them to shareholders in the form of dividends which should be transferred to the research & development. The research should focus not only finding new markets for the products but also the improvements in the existing products to match the newer markets.
 

PROPER UTILIZATION OF CASH
Current ratio’s climb from 1.39 to 1.80 has increased the ability of Hershey to use the extra cash into exploring newer markets. Feasibility of the investments must be prepared and carefully studied before making heavy asset investments that do not contribute to the market share. Such studies should also cater to the needs of controlling unnecessary and non-productive marketing and administrative expenses. It should curb long term acquisition of loans to increase its solvency and liquidity.

DIVESTITURE OF ASSETS
Assets involved in non-chocolate producing activities have to be divested so that the increasing debts may be covered. Selling a division or part of an organization is called divestiture, which are often used to raise capital for further strategic acquisitions or investments. Hershey can use divestiture as part of an overall retrenchment strategy to rid an organization of assets that are non-profitable, that require too much capital or that do not fit well with the other activities of the firm.

MORE RESPONSIVE AND FLEXIBLE CREDIT POLICIES
The seasonal changes in demand require a strategy to match such changes. Hershey has too much strong credit policies which though give an edge over its competitors but actually hinders its opportunities to increase the sales by adopting more lenient policies. There is no need to have such hard credit policies. The existing day’s turnover for Hershey is 32 while those of its competitor Nestle are 50 days. There can be more leniencies affordable to Hershey.

MORALE BUILDING OF EMPLOYEES
Hershey recently sold San Giorgio Macaroni (a pasta company) which lowered the morale of employees as it reduced its workforce by 930 people in January of 1999. The job security is a major concern for the employees which needs to be assured by the company. Incentives are not the sole factors for employee’s satisfactions. Hershey must also look for participation from the employees and use activities and methods to increase employee’s participation. There is an urgent need to retain the employee morale which was shattered by the undue termination of around 900 employees in one Hershey’s foreign subsidiaries. Hershey should be cautious in the future not to allow such layoffs in the future.

f those writers was attributed mostly to their teachers and the text contained a dialogue or discussion between various popular literary figures. Plato’s ‘Republic’ can be quoted as an example, which contains a discussion between Socrates and other characters. Moreover, “in the commentaries of the ancient texts, too, the focus is on the tradition rather than on the authors who wrote these works. The origin of these ancient traditions is usually associated with nebulous historical or mythical figures. When one studies any corpus of such texts along with the commentaries, one tends to think more in terms of collective authorship instead of an individual author. Thus, the idea or the knowledge transmitted was more important than the individuals who contributed to the tradition.”

The difference between the oral and scribal culture was minor. Although, oral culture is more primitive but after the initiation of scribal traditions both culture existed side by side. The oral communication lost its authenticity through re-communication but the scribal scripts existed unaltered and proved as more reliable pieces of information for the future. The amalgam of the oral and scribal culture is best described by the famous American author Elizabeth Eisenstein, saying that "scribal culture was so thin that heavy reliance was placed on oral transmission... producing a hybrid half-oral half literate culture that has no precise counterpart today".
 

End Notes

 

 Bureaucrats and Barbarians: The Greek Dark Ages. http://www.wsu.edu:8000/~dee/MINOA/DARKAGES.HTM

From Scribal Culture to Typographic Culture. http://www.cecm.sfu.ca/personal/tstanway/MKM/typographic.html

Odin, Jaishree K. Technologies of Writing, http://www.hawaii.edu/aln/printing.htm

Scribal culture, http://65.107.211.206/cpace/infotech/asg/ag11.html
 

 

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