Conducting an Environmental Scan

Conducting an Environmental Scan

Jennifer Todd

University of Phoenix

STR/581

Professor Jim Pepitone

February 8, 2010

The Hershey Company is one of the largest North American manufacturers of quality chocolate and sugar confectionary products. With revenues of nearly $5 billion and more than 13,000 employees worldwide, The Hershey Company markets such brands as Hershey’s, Reese’s, Hershey’s Kisses, and Ice Breakers. Hershey is the leader in the fast growing dark and premium chocolates like Hershey’s Special Dark, Hershey’s Extra Dark and Cacao Reserve (www.hersheys.com). Some other popular brands of Hershey’s chocolate are: Almond Joy, Kit Kat, Payday, and Milk Duds to name a few. They have had the success and contributed to reaching sales of over four billion dollars.

An External Analysis has five forces. The first one is Threat of Entry which is moderately favorable to the Hershey industry attractiveness. The next force is Intensity of Rivalry. It is moderately unfavorable to the industry attractiveness. The third force is Power of Buyers who is moderately unfavorable. The forth force is Power of Suppliers which depends on the supplier. The last force is the Pressure from Substitutes and they are moderate to the Hershey industry attractiveness. The overall industry attractiveness is moderately unattractive.

Macro Environment

Opportunities

As consumers we are constantly changing our preferences when it comes to products. Since we now want richer products as far as chocolate, bakeries are now using chocolate and cocoa that is of higher quality. Consumers also want a wider variety of chocolate products which enables industries to expand the chocolate line to meet the needs of the consumers which in return provides excellent sales opportunities for the new product.

Chocolate and Cocoa products have an opportunity to establish joint ventures with other retail companies that are in other industries. An example of this...