Hershey's Strategic Paper
The
Hershey
Company
TABLE OF CONTENTS
Page
Disclaimer 1
Table of Contents 2
Industry Summary 3
Company Summary 7
Mission Statement Analysis/Revised Mission 13
External Analysis Summary 18
Internal Analysis Summary 21
Financial Analysis Summary 24
Alternative Strategies 29
Strategy Recommendation 36 INDUSTRY SUMMARY
History of Chocolate
Chocolate is made from cocoa powder, which comes from the cocoa tree’s football shaped, melon-like fruit. Cocoa trees grow best in the tropical environments of Africa and South America under the shade of the rainforest canopy. Inside the pods are the beans, which must be dried and ground to create the cocoa powder.1
The earliest known mention of cocoa dates back to about 4000 years ago in the Amazon Forest. 1 The first clear use of cocoa was by the Mayan people in Mexico in the Sixth Century, where it was consumed as a cold, unsweetened beverage. The word chocolate actually comes from a Mayan word meaning “bitter water.” The cocoa pod symbolized life and fertility and was considered the god’s food. 2
When the Spanish invaded Mexico, they brought the seeds back home to Spain where new recipes were created. This began the evolution of chocolate in Europe, where the Swiss eventually became known as the premier makers of chocolates.
Chocolate production was brought to the United States by Milton Hershey in 1893. Chocolate has since become the favorite indulgence of many Americans.
The Chocolate Industry Today
Cocoa pods must be harvested by hand. Each fruit contains 20 to 40 seeds or cocoa beans. The beans are removed from the pods and placed in large piles to ferment, which takes about one week; this develops the rich cocoa flavor. As cocoa beans vary in potency and flavor, most companies purchase a variety of beans to blend for their
Hershey
Company
TABLE OF CONTENTS
Page
Disclaimer 1
Table of Contents 2
Industry Summary 3
Company Summary 7
Mission Statement Analysis/Revised Mission 13
External Analysis Summary 18
Internal Analysis Summary 21
Financial Analysis Summary 24
Alternative Strategies 29
Strategy Recommendation 36 INDUSTRY SUMMARY
History of Chocolate
Chocolate is made from cocoa powder, which comes from the cocoa tree’s football shaped, melon-like fruit. Cocoa trees grow best in the tropical environments of Africa and South America under the shade of the rainforest canopy. Inside the pods are the beans, which must be dried and ground to create the cocoa powder.1
The earliest known mention of cocoa dates back to about 4000 years ago in the Amazon Forest. 1 The first clear use of cocoa was by the Mayan people in Mexico in the Sixth Century, where it was consumed as a cold, unsweetened beverage. The word chocolate actually comes from a Mayan word meaning “bitter water.” The cocoa pod symbolized life and fertility and was considered the god’s food. 2
When the Spanish invaded Mexico, they brought the seeds back home to Spain where new recipes were created. This began the evolution of chocolate in Europe, where the Swiss eventually became known as the premier makers of chocolates.
Chocolate production was brought to the United States by Milton Hershey in 1893. Chocolate has since become the favorite indulgence of many Americans.
The Chocolate Industry Today
Cocoa pods must be harvested by hand. Each fruit contains 20 to 40 seeds or cocoa beans. The beans are removed from the pods and placed in large piles to ferment, which takes about one week; this develops the rich cocoa flavor. As cocoa beans vary in potency and flavor, most companies purchase a variety of beans to blend for their