Hershey case study
ABSTRACT
The case study is about the failure of Hershey Foods Corporation when entering the Australian market. Our group will scrutinize the reasons of this failure and analyze the Australian market to figure out the opportunities and challenges of the new entrant into this market. Finally, based on the recent situation of Hershey, our group will propose some recommendations for Hershey to re-enter and be successful in the Australian as well as the international market.
I. Background
1. Company overview Hershey, which is one of the leading chocolate-making factories in the world, was founded in 1913. The company originated from a caramel confectionery business, and then moved to chocolate-making segment. The company's core values focus on maximizing customer value, achieving high quality products and building solid trade relations with partners. The growth and success of Hershey has been relied on the strong focus on high expenditure of marketing and promotions, and utilization of the state-of-the-art production facilities. The sharp emphasis on its core competencies - chocolate making is also a solid foundation for Hershey to become one of the most popular chocolate brand names.
2. Acquisition strategy To achieve its vision to become a major diversified food company, Hershey has been acquiring many players in this market. This strategy brought Hershey the leading position in the US confectionary industry. The company was the number one of the US confectionary market with the highest market share at 20.5%. In order to gain this position, it focused on a string of acquisitions in North America. The development timeline is presented as the following graph:
In 1986, Hershey acquired The Dietrich Corporation to manufacture and distribute Luden’s and Queen Anne confectionary product lines. Coming to the mid-1987, Hershey continued to purchase Nabiso Brands Ltd of Canadian operations. Thanks to this acquisition, Hershey became the low cost producer and
The case study is about the failure of Hershey Foods Corporation when entering the Australian market. Our group will scrutinize the reasons of this failure and analyze the Australian market to figure out the opportunities and challenges of the new entrant into this market. Finally, based on the recent situation of Hershey, our group will propose some recommendations for Hershey to re-enter and be successful in the Australian as well as the international market.
I. Background
1. Company overview Hershey, which is one of the leading chocolate-making factories in the world, was founded in 1913. The company originated from a caramel confectionery business, and then moved to chocolate-making segment. The company's core values focus on maximizing customer value, achieving high quality products and building solid trade relations with partners. The growth and success of Hershey has been relied on the strong focus on high expenditure of marketing and promotions, and utilization of the state-of-the-art production facilities. The sharp emphasis on its core competencies - chocolate making is also a solid foundation for Hershey to become one of the most popular chocolate brand names.
2. Acquisition strategy To achieve its vision to become a major diversified food company, Hershey has been acquiring many players in this market. This strategy brought Hershey the leading position in the US confectionary industry. The company was the number one of the US confectionary market with the highest market share at 20.5%. In order to gain this position, it focused on a string of acquisitions in North America. The development timeline is presented as the following graph:
In 1986, Hershey acquired The Dietrich Corporation to manufacture and distribute Luden’s and Queen Anne confectionary product lines. Coming to the mid-1987, Hershey continued to purchase Nabiso Brands Ltd of Canadian operations. Thanks to this acquisition, Hershey became the low cost producer and