Cfa Hershey Chocolate

Hershey’s and Cadburys are moving towards the premium chocolate market through the acquisition or upmarket launches (Zietsma, 2007). The profit potential present in this sector supported by its 20% annual growth rate make it very attractive for large organizations to come forward and avail this opportunity. There is a low threat of new entrants prevailing in this chocolate industry because of the high capital requirements and expected retaliation by current manufacturers. Current players in the industry also possess some barriers to entry for new entrants by maintaining economies of scales with their large production capacity and keeping their product differentiation with their specialized and novelty chocolate products. Even though there are low switching costs and easy access to distribution channels, but still the brand loyalty of the customers including the Rogers’ Chocolate itself make it harder for new firms to come into the competition.

Hershey’s ratios indicate that the Company’s ability to earn income is increasing across the periods analyzed. Increasing profit margins and gross profit rates indicate that the Company is managing its costs effectively. Increasing return on assets indicates that the Company has been effectively using its assets to generate earning power. The Hershey Company appears to be profitable and is effectively managing costs and resources to generate increased income and provide greater return to its investors, demonstrated by increases in return on equity and earnings per share.

The Hershey Company and Tootsie Roll Industries, Inc. have weathered the ”Great Depression” with a history of more than one hundred years in the confectionary candy making industry. Their vision and longevity have pushed them into the twenty first century to meet the needs of the community, consumer, affordability, environment and healthy control portions. Both companies have made available, reduced sugar, sugar free, nut free, peanut free and gluten free products that is reflected in their candies, gum and mints. The two companies are worth investing in, but may be better than the other.

The founder of Hershey Chocolate, Milton Hershey, had a long journey to creating some of the most famous candy today. From a young age he lived in poverty and his parents constantly fought due to differences, which would always have an impact on Milton’s life. He started out in the business struggling, first with his caramel business going under and the unhelpful advice of his father that only led to Milton making more mistakes. Once Milton made it big he went on to do amazing things and dedicated a big part of his life to helping other people and focusing on the well-being of his employees. Milton Hershey was indeed one of the most famous and successful people in the candy community, but it was only through many hardships and stress that got him there.

The following statistics stated in the case indicate that “23% of respondents would definitely buy the Montreaux dark chocolate with fruit product and 40% would probably buy the product.” These average ratings strongly suggest that this product should be introduced into the market very gradually. This strategy would enable the company to evaluate consumer buying patterns so that the company could determine future production levels and future marketing strategies that benefit both the company and the consumer. Financial information given in the case also indicates that the company needs to introduce this product very conservatively. Exhibit 1 informs that with 5.98 million total purchases, low awareness, low ACV and mediocre product, Montreaux would gross $17.44 million. Exhibit 2 shows that with medium awareness, medium ACV and an average product Montreaux would gross $25.1 million. These figures do not meet Montreaux’s objective of earning at least $30 million in its first year. Exhibit 3 shows a slightly improved situation: with high awareness, high ACV, and an excellent product, Montreaux would gross

To facilitate the valuation aspect of the analysis, free-cash-flow forecasts are provided in case Exhibit 10 for Hershey as a stand-alone entity. Most students should find it easy to calculate a value for Hershey using the discounted-cash-flow (DCF) method and industry-comparable multiples, which also are provided. As with any valuation case, students must make judgments about the appropriate capital structure, the weighted average cost of capital (WACC), sales growth, and the terminal growth rate. Once students have explored the value drivers for Hershey though sensitivity analysis, they may then evaluate the bids from both Nestlé S.A.–Cadbury Schweppes PLC (NCS) and the Wm. Wrigley Jr. Company. They will want to examine whether the bids are fair from the perspective of HFC shareholders and whether the synergies assumed by the bidders in their offer prices are reasonable.

What is competition like in the premium chocolate industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants?

We believe that diversification of an investment portfolio alone is not a valid reason to sell Hershey Foods Corporation in this case. Ten years ago, there would have been few benefits for the Hershey School with the sale of the Hershey Foods Corporation stock. These benefits include a price advantage on the sale of the stock and a short-term monetary gain for the endowment fund. Another benefit is that the Hershey Trust Company’s investment portfolio would be less concentrated in Hershey stock, which in theory may be to their advantage if the Hershey stock were to suddenly decline in value.

The decision to sell the shared faced strong opposition from Hershey employees, local businesses, and politicians. The community did not want foreign company to take over Hershey Company due to the legacy of Hershey involvement in the community will be compromised and many jobs might be lost.

Hershey has bought and produced tons of chocolate for over 50 years that has had the blood, sweat and tears of the not only the children on the Ivory Coast, but the adults as well. The way that Hershey has been able to sell to their consumers with very low prices on all their products is because they buy from the cocoa farms that have child slaves. Many of which were taken from their homes, sold or needed to provide for their families. They would come work for cocoa farmers and get paid little to nothing. Children who work on the Ivory Coast usually are between ages 12 and 16,

Hershey chocolate is known as one of the world’s most popular chocolate brands. For 118 years, the Hershey brand remains a favorite chocolate treat in over 90 different countries. Beginning only manufacturing milk chocolate, the company today manufacturers over 100 different varieties of candy. Many people are familiar with the traditional Hershey milk chocolate bar, Reese’s peanut butter cups, and bite sized Hershey kisses. The process behind producing these famed treats is a fascinating process. By evaluating the company’s manufacturing process and business dynamics, consumers can gain a better perspective of the science behind the candy the enjoy most.

million less compared to those in 1998, a drop of 12% (Refer Table I for the details of Hershey‟s

The Hershey Company, known until April 2005 as the Hershey Foods Corporation and commonly called Hershey 's, is the largest chocolate manufacturer in North America. Its headquarters are in Hershey, Pennsylvania, which is also home to Hershey 's Chocolate World. It was founded by Milton S. Hershey in 1894 as the Hershey Chocolate Company, a subsidiary of his Lancaster Caramel Company. Hershey 's products are sold in about sixty countries worldwide. In addition, Hershey is a member of the World Cocoa Foundation. The company has been topped to 384, compared with the previous rank 404, in 2013 (CNN, 2013). This paper is going to show the company’s international environment,

The tree begins with the “Hershey’s” bar because it only has chocolate, which is the common ingredient amongst all the candy. “Hershey’s” branches off into “M&M’s”,” Reese’s Cups”, and ‘Kit Kat”. The candies on this level all have two ingredients. "M&M’s" branch off into their own phylum because it is the only second level (candies consisting of two ingredients) chocolate with a coating. “Reese’s” and “Kit Kat” section off because although both have two ingredients, “Kit Kat” has a crunchy inside and “Reese’s” has a creamy inside. “Reese’s” does not branch off into other candies because it is the only candy with a purely creamy inside. “Kit Kat” and “M&M’s”, on the other hand, branch off into other candies. “M&M’s” lead to “M&M’s with peanuts”.

The proposed sale of Hershey Foods Corporation (HFC) during the summer of 2002 captured headlines and imaginations. After all, Hershey was an American icon, and when the company’s largest shareholder, the Hershey Trust Company (HSY), asked HFC management to explore a sale, the story drew national and international attention. The company’s unusual governance structure put the Hershey Trust’s board in the difficult position of making both an economic and a governance decision. On the one hand, the board faced a challenging economic decision that centered on determining whether the solicited bids provided a fair premium for HFC shareholders. On the other hand, the governance decision required the