Hershey’s SWOT analysis analyzes the brand’s strengths weak points, opportunities, and threats.
In Hershey’s SWOT analysis, advantages and disadvantages are internal factors while threats and opportunities are external elements.
SWOT Analysis is an established management technique that allows brands such as Hershey’s to measure their performance and business when compared with the competition.
Hershey’s is among the top companies that operate in the FMCG sector. The following table lists Hershey’s SWOT Analysis (which is Hershey’s SWOT (Strengths weaknesses, Strengths, Opportunities threats) and the top Hershey’s competitors and includes targeted market, segmentation positioning, and the Unique Selling Proposition.
The Hershey Company (Hershey) is a producer of chocolate and nonchocolate confectionery items.
The company is primarily focused on top-quality products, products for refreshment, and pantry items.
Its portfolio of products includes sugar and chocolate confectionery items, gum and mint refreshment items as well as baking ingredients, toppings as well as snacks, and beverages.
Hershey sells its goods under names including Hershey’s, Reese’s, Kit Kat, Kisses, Twizzlers, Jolly Rancher, Ice Breakers, Snackbarz, Heath, Bliss, Breathsavers, York, Twizzler, Whatchamacallit, Pieces, Almond Joy, Brookside, Good & Plenty, Lancaster, Payday, Rolo and Whoppers.
The company is present across North as well as South America, Europe, Asia as well as in the Middle East, and Africa. Hershey is the headquarters of Hershey, Pennsylvania, the US.
Strengths of Hershey’s
❤️ The largest chocolate maker The largest chocolate manufacturer Hershey’s was established in 1849 and has a significant footprint across the world. It is considered to be one of the top chocolate makers worldwide. The following are the US percentage of the market of Hershey’s.
❤️ Large spread Wide distribution Hershey’s is sold across over 60 nations however it is focused in certain countries and is averaging a share of market share in the rest of the world.
❤️ The innovative chocolatier company The brand of chocolate HTML0 Hershey’s is recognized as an innovative and innovative chocolate company. It has been branded in a variety of ways and created a variety of new products. A few of them are Hershey’s chocolate universe, the various packaging styles used by the brands, and the many different kinds of chocolates that have been created.
❤️ KitKat license The benefit of Hershey’s is that, due to its massive market share, Hershey’s in partnership with Nestle also holds the USA distribution rights for KitKat. KitKat is another brand that is loved all over the world and is among the most popular chocolates. This means that KitKat licenses are also a source of revenue for Hershey’s.
❤️ Massive range of product collection This is Hershey’s portfolio of products. It is evident by clicking the link to Wikipedia, that Hershey’s is present in more than 50 varieties of products and this is an enormous selection for a chocolatier. You can find every kind of chocolate within Hershey’s portfolio.
❤️ billion dollar sales each Year – Hershey’s boasts a staggering 7.5 billion dollars per year at the time of 2017.
❤️ Highly regarded business Highly regarded company Hershey is ranked 249 on the most highly regarded businesses list of Forbes. It also ranks 269th in the world when it comes to the most reputable employers. These two figures indicate the respect shown to the company’s brand.
❤️ brand equity The brand equity of Hershey’s is ranked 94th among the most valuable brand around the globe as well as a brand value of $7 billion. The company invests around 525 million dollars every year in marketing as well as marketing.
❤️ Philanthropy activities The company Hershey’s has made numerous efforts to support education, and with its own educational institutions, with great facilities. Recently, in conjunction with the Clinton Initiative, Hershey’s has pledged to ensure Basic Nutrition in Ghana.
Weaknesses in the SWOT analysis of Hershey’s
❤️ The purchase Cocoa Cocoa Hershey’s doesn’t purchase in a systematic manner and is criticized for it. Hershey’s doesn’t use fair trade practices, as is one would expect from an eminent company.
❤️ Its expansion has been not as extensive although it’s within the FMCG category, Hershey’s is expected to expand to more than 60 countries, thereby expanding its reach.
❤️ Numerous small players This segment is that there are a lot of regional and small players, thus decreasing the market share in various regions.
❤️ fake merchandise The issue with Hershey’s chocolate is they are easily duplicated and that is the issue facing developing countries where counterfeit Hershey’s products are found.
Opportunities of Hershey’s
❤️ Segment for snacks Apart from chocolates, Hershey’s can also snacks segment, though this would create greater diversification and will focus exclusively on its brand. However, many FMCGs are in different segments to achieve economies in scale.
❤️ Expansion We don’t believe that 60 countries are enough for such an iconic brand, and Hershey’s is definitely able to expand even further. It actually has a small presence in India and the other countries in which there is plenty of potential for expansion due to the size of the population.
❤️ Distributor network Naturally, as the company expands the significance of having a robust distribution network grows exponentially. Because Hershey’s is the largest retailer of chocolates and chocolates, it requires to be in a position to exert the appropriate pulling power to ensure a sturdy distribution network can be built.
Threats In The SWOT Analysis Of Hershey’s
❤️ The competition is fierce High competition – One of the most significant threats to the growth of Hershey’s is the fact that there is a lot of rivalry in the chocolatier industry. The top three brands are Mars, M&M, and Cadbury which are powerful brands within this sector. In the end, Hershey fights these rivals at all times.
❤️ Margins shrinking The cost of all goods is rising. Costs of distribution costs, labor costs, fuel prices Everything is rising. Because of this rise in costs over time, and also due to the fiercely competitive environment the margins of companies are shrinking. Over the course of time, the bottom line gets affected by these costs even though the top line remains consistent.
❤️ The importance of health awareness As time passes, more and more users are being aware of the benefits of living a healthy way of life particularly since a variety of news and blogs have been focusing on these. The first recommendation in the health tips is to cut down on eating sugar or sugar-based products. Since chocolates are sugar-based, more people are turning away from chocolate and the consumption of chocolate is declining.
❤️ Raw material issues Problems with raw materials Cocoa is the main ingredient for Hershey’s as well as a massive consumption of Cocoa all over the globe in a variety of varieties. In the end, getting the appropriate quantity of Cocoa is a significant cost and bottleneck in production.
Limitations of SWOT Analysis for Hershey
While SWOT analysis is a popular tool for strategic planning, SWOT analysis is used widely to plan strategic strategies However, the analysis has some limitations.
- Certain characteristics or aspects of an organization could be both a strength as well as a weakness at the same time. This is among the main limitations of SWOT analyses. For instance, changing environmental regulations can be an opportunity and a threat to the company. However, it may also provide an opportunity in the sense that it allows the company to compete on the same level or gain an advantage over its competitors if it is able to create products more quickly than its competitors.
- SWOT doesn’t provide a way to get a competitive edge It is not a strategy to gain a competitive advantage, therefore it should not be considered a solution in and of itself.
- The matrix is merely an idea to begin discussions on how suggested strategies can be implemented. It also provided an evaluation window, but it did not provide an implementation plan based on its strategic competitiveness. Hershey
- It is a static analysis and analysis of the existing conditions and a small number of potential modifications. As the environment, circumstances, as well as threats, and strategies, evolve, the dynamics of a competitive setting cannot be analyzed in one matrix.
- SWOT analysis could make a firm over-emphasize the importance of a single external or internal aspect when formulating strategies. There are interrelations between the most important external and internal elements that SWOT doesn’t reveal, which could be crucial in determining strategies.
Weighted SWOT Analysis of Hershey
Given the above-identified shortcomings of the SWOT analysis/ matrix, the management of corporations has decided to assign an appropriate amount of weightage for each of the strengths and weaknesses of the company.
Companies also evaluate the probability of the events happening in the near future, and the impact they can be on the performance of the company.
This technique is known as the Weighted SWOT analysis. It is superior to basic SWOT analysis as With weighted SWOT Analysis Hershey, managers can concentrate on the most important elements and ignore the less crucial ones.
It also eliminates the problem of a long list that causes organizations to make an extensive list, but with no factors considered crucial.
References Books on Hershey SWOT Analysis
Hershey (2018), “Hershey Annual Report”, Published in 2018.
Euromonitor (2018), “Consumer/Non-Cyclical Sector Analysis “, Published in 2018.
A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
L. Wrigley, Divisional Autonomy and Diversification (Ph.D., Harvard Business School, 1970)
M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975)
R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)
After a thorough study of the swot study of Hershey’s, it has been found that Hershey’s is the top chocolate manufacturer.
The health risks, fake products and rising costs for ingredients, and a lack of control are the most significant problems.
Hershey’s might want to consider offering less calorie-based chocolates in order to meet the needs of those who are concerned about their health.