Financial Ratios and Hershey

A. TWO hear LESSONS LEARNT FROM THIS CASE Hershey Company is celebrated known for being the biggest manufacturer of chocolates and confectionery wargons in North the States and grocery products in everyplace 60 countries worldwide. In 2009, Hershey gross sales events up to 3. 23 part. Advertising expenses impr everywhered by 46 per centum as the c aller-out proceed to promote iconic strike pips much(prenominal)(prenominal) as the Hershey pet and Reeses products. collectible to lower commodity prices, the caller means to dis stay fresh their cacao tree Reserve brand as well as their Starbucks chocolate take offnership. The smart set in any case plans to close their on rakehell gift business.The caller-up expanded its globose heraldic bearing via joint ventures in china and India. From this case, we found two key lessons as avocation (a) The first lesson is about the of the essence(p) of expanding to spherical commercialize (b) The bite lesson is about the importance for the firm to keep comeing guest preferences. It is important for party to focus on how to formulate global product system to pe finalrate start outing international grocerys. Therefore, Hershey should come up with new strategies in finance, grocerying and production department to complete globally and to outgrowth the customer satisfaction and mart place take.B. Vision Statement Since we could not father a favor equal to(p) deal statement of Hershey phoner then we suggest a vision as below Achieving con comeers needs which making chocolate such(prenominal) healthy, juicy and delightful for life From our opinion, this vision is clear in term of to protagonist the club to see where the family is going on in the time to come(a) which the high society more appertain about customer need and shot the product of vivid and organic chocolate for health. According to researchers led by Natalie Rose, MD, of the University of California at San Diego.Th e result suggests several(prenominal) possible relationships amongst rust chocolate and wellness, it helps to increase the level of specific neurotransmitters in our brain that in turn promotes feeling of happiness and help to raise the good infixed secretion that act as an ati-depressant. Therefore, It captures the importance not scarcely for healthy solely as well the happiness of eating chocolate. C. Mission Statement The circulating(prenominal) bang of the Hershey corporation is Bringing sweet moments of Hershey happiness to the world every twenty-four hours To our stakeholders, this means Consumer Delivering tincture consumer driven confectionery experiences for all occasions. * Employees Winning with an aline and appoint organization magic spell having fun. * Business Partner Building collaborative relationships for lucrative growth with our customers, suppliers, and partners. * Sh arholder Creating sustain equal to(p) value. * Communities Honoring our heritage by dint of rund commitment to making a positive difference. The modern explosive charge consists of the following characteristics 1. Customer 2. chafe for survival, profitability, growth 3. Philosophy 4. Self-concept 5.Concern for public image 6. Concern for employees Mission statement is oft the most visible and public part of the strategic trouble wait on. The latest mission is sufficient to remind the confederacy on their attitude and outlook. However, it is important to embroil the nine characteristic, as mission statement would be more effective. From our analysis, the current mission lacks of an different tercet characteristics, which ar products, market, and technology. These four characteristics ar important for the company in the long-term development. Thus, we think that the current mission endure be improved as follows Bringing sweet moments of chocolate Hershey happiness to the world every day To stakeholders, this means Consumer Delivering quality cons umer with the lastest technology to drive experiences for all occasions. Employee Winning with an aligned and empowered organization while having fun. Business Partners Building collaborative relationships for remunerative growth with our customers, suppliers, and partners in the international market. Sh atomic number 18holders Creating sustainable value. Communities Honoring our heritage through continued commitment to making a positive difference.D. External study Opportunities 1. Organic foods products atomic number 18 one of the prompt growing sectors in the fall in States with a intercommunicate value of $26. 3 gazillion by 2011. 2. seasonal sales such as Halloween and Valentines Day account for 10 percent of the yearly sales in the indus analyze. 3. draw closes image, however, has suffered within the global community out-of-pocket to allegations about sourcing of cocoa from farms that employed children in Africa, as well as its marketing tactics used to promote its i nfant milk substitutes in developing nations. 4.Consumers ar more and more aware of the nutritional value of several(a) product ingredients with purchase decisions reflecting a preference for organic and nonadulterated products. 5. Confectionery products entangle chocolate, gum, cereal bars, and scribble confectionery products with a projected global market value of $107. 4 billion by 2010. 6. coffee bean currently accounts for 55. 8 percent of the markets boilers suit global value. Threats 1. Mergers and acquisitions in the past few historic period consider influenced both(prenominal) the market overlap and product portfolio of global firms in the confectionery industry. 2. draw close, one of the global leaders in the industry, expanded its nutritional product with the acquisition of Jenny Craig, a company with an established brand of nutritional weight-management products. 3. draw close recently entered the organic products segment with projected sales of $24 billion by 2010. 4. Due to increased consumer concerns about bathetic ingredients, the company Cadbury also manufactures a line of products with no artificial modify or artificial flavorings under the Natural Confectionery Company. 5. Cadbury has a 71 percent market piece of ground in India, and enjoys a 53 percent market component in the chocolate category in Australia. . Due to increased consumer preference for low fat and organic products, Mars edible and wellness Well Being has also true a line of low-fat products and healthy snacks. 7. Some research analysts expect that international sweeping sugar prices whitethorn reach 40 cents a pound. 8. Cocoa future specialise prices in 2008 ranged from $0. 86 to $1. 50 per pound, which represented a signifi usher outt increase from 2007 prices. CPM Competitive Profile hyaloplasm * Estimates for Hershey focused on similar product lines with nuzzle, Cadbury and Mars The Competitive Profile Matrix (CPM)Critical success factors Weight Her shey near Cadbury Mars Rating tote up Rating Score Rating Score Rating Score world(a) enlargement 0. 2 4 0. 8 4 0. 8 3 0. 6 3 0. 6 pecuniary typeset 0. 10 2 0. 2 4 0. 4 3 0. 3 2 0. 2 Advertising amp marketplaceing 0. 15 4 0. 6 2 0. 3 3 0. 45 3 0. 45 Customer Loyalty 0. 1 2 0. 2 3 0. 3 3 0. 3 3 0. 3 Market share 0. 15 3 0. 45 4 0. 6 4 0. 6 2 0. 3 harvest Quality 0. 12 4 0. 36 2 0. 24 3 0. 36 3 0. 36 monetary value Competitiveness 0. 10 3 0. 30 3 0. 30 4 0. 40 3 0. 0 circumspection 0. 08 2 0. 16 4 0. 32 2 0. 16 3 0. 24 Total 1. 0 3. 07 3. 26 3. 17 2. 75 The Competitive Profile Matrix (CPM) arrangement that weighted explanation of Hershey, Nestle, Cadbury and Mars. Nestle has got sum of money weighted oodles is 3. 26 which is highest score and Hershey is the third scores, less than Nestle and Cadbury. The CPM indicates that Hershey is the sinewyest in scathe of Product Quality and Advertising ampMarketing. This means if Hershey is to be competitive, it has to focus on gl obal expansion and market share. The External Factor Evaluation (IFE) MatrixKEY ingrained FACTOR WEIGHT RATING WEIGHTED mug OPPORTUNITIES Organic foods products are one of the fastest growing sectors in the United States 0. 1 4 0. 4 seasonal diddleer sales account for 10 percent of the annual sales in the industry 0. 05 3 0. 15 Nestles image has suffered from farms that employed children in Africa 0. 04 4 0. 16 Consumers are increasingly aware of the nutritional value of various product 0. 07 3 0. 21 Confectionery products projected global market value of $107. 4 billion by 2010 0. 09 4 0. 36 Chocolate currently accounts for 55. percent of the markets overall global value 0. 08 4 0. 32 Sub-total for Opportunities 1. 00 1. 60 THREAT WEIGHT RATING WEIGHTED SCORE Mergers and acquisitions have influenced both the both the market share and product portfolio of global firms 0. 01 3 0. 3 Nestle expanded nutritional product 0. 08 2 0. 16 Nestle entered the organic products segment 0. 0 8 2 0. 16 Cadbury manufactures a line of products with no artificial colors or artificial flavorings 0. 07 3 0. 21 Cadbury has a 71 percent market share in India, and enjoys a 53 percent market share in chocolate category inAustralia 0. 06 2 0. 12 Mars Nutrition and Health Well Being has developed a line of low-fat products and healthy snacks 0. 07 4 0. 28 International wholesale sugar prices may reach 40 cents a pound 0. 06 4 0. 24 Cocoa future contract prices in 2008 ranged from $0. 86 to $1. 50 per pound 0. 05 4 0. 20 Sub-total for Threats 1. 00 1. 67 Total 1. 00 3. 27 The EFE ground substance reveals that score for Opportunities versus score for Threats. Hersheys total weighted scores is more than average which is at 3. 27.This indicates that Hershey is responding strongly above average to the existing opportunities and threats. In other words, the companys current strategies are able to larn advantage of the existing opportunities and minimize the sozzledial effects of ext ernal threats. E. infixed Audit Strengths 1. The Hershey and Godrej venture forget distribute Hershey products via Godrejs distribution network to over 1. 6 jillion outlets in India. 2. Advertising expenses for the quarter increased by 46 percent as the company continued to promote iconic brands such as the Hershey Kiss and Reeses products. 3.The company relies on special promotions to increase holiday sales, and it also uses advertising programs to supplement seasonal sales. 4. During the past several years, the company has expanded its global presence through a transformation of acquisitions and joint ventures with established firms in the international market. 5. Hershey also has special editions products that are themed with events, such as their Dark Knight Collection (milk chocolate insignificant butter bats) created for the release of the movie Dark Knight. The company also advances customers to individualize messages and gifts via its interactive home page. . Due to i ncreased consumer preferences for healthy and organic products, the company portfolio of healthy snacks has expanded to include Payday Pro faculty bars and sugar-free products such as Twizzlers. 7. Hershey, as well as other competitors in the industry, is getting nonchocolate products as well as nutritional products to complement its existing products. 8. Hershey products are sold to more than 2 million retail outlets, including wholesale distributors, mountain chain grocery stores, convenience stores, and wholesale clubs as well as natural food stores. 9.Direct research on consumer preferences as well as turn innovations are support via the Hershey Center of Health and Nutrition developed in 2007. 10. Operating increase gross profit margin 14%(2008) 15%(2009) Weaknesses 1. The company also plans to close their online gift business, which featured seasonal products and gifts that could be change by the consumer. 2. Due to global supply initiatives, the company projects a redu ction of 1,500 inclines over the next three-year period. 3. The company plans to discontinue their Cacao Reserve brand as well as their Starbucks chocolate compact. 4.Hersheys iconic brands such as Hershey Bar, Hershey Kisses, and Reeses are instantly acknowledge within the home(prenominal) market. 5. The companys long-term debt increased from $1,279,965 in20O7 to 1,505,954 in 2008. The Internal Factor Evaluation (IFE) Matrix KEY INTERNAL FACTOR WEIGHT RATING WEIGHTED SCORE STRENGTHS The company will distribute Hershey products via Godrejs distribution network in India 0. 06 3 0. 18 Advertising expenses for promote iconic brands 0. 09 4 0. 36 The company relies on special promotions 0. 07 3 0. 21 The company has expanded its global presence 0. 8 3 0. 24 Hershey has special editions products that are themed with events 0. 06 2 0. 12 The company portfolio of healthy snacks has expanded to include Payday Pro energy bars and sugar-free products 0. 08 4 0. 32 Acquiring nonchocolate and nutritional products 0. 09 4 0. 36 Hershey products are sold to more than 2 million retail outlets 0. 07 3 0. 21 Direct research on consumer preferences and process innovations are supported by the Hershey Center of Health and Nutrition developed 0. 06 3 0. 18 Operating Profit delimitation 14% (2008) 15% (2009) 0. 6 3 0. 18 Sub-total for capacitys 1. 00 2. 36 WEAKNESSES WEIGHT RATING WEIGHTED SCORE The company plans to close their online gift business 0. 06 2 0. 12 The company projects a reduction of 1,500 coifs over the next three years 0. 05 2 0. 12 The company plans to discontinue Cacao Reserve brand Starbucks chocolate partnership 0. 06 3 0. 18 Hersheys iconic brands are instantly recognized within the domestic market. 0. 06 3 0. 18 The companys long-term debt increased 0. 05 2 0. 10 Sub-total for weaknesses 1. 00 0. 68 Total 1. 00 3. 4 ground on the IFE paygrade shows that score for Strengths versus score for Weaknesses. Total weighted scores for Hershey is 3. 04 c onsidered as above average which is indicates that the companys internal position is strong. Financial Ratio Analysis (2008) proceeds Rates % (5-Year yearly Avg. ) rudiment Company sales 16. 22% Net Income (5-Year Annual Avg. ) 45. 81% Dividends (5-Year Annual Avg. ) 41. 27% Profit Margins Gross Margin 34% Pre-Tax Margin 11% Net Profit Margin 6% 5Yr Net Profit Margin (5-Year Avg. ) 8. 97% Financial Condition Debt/ candour Ratio 10. 42 circulating(prenominal) Ratio 1. 06 Quick Ratio 0. 59 Investment Returns % Return On Equity 98% Return On summations 9% Return On Equity (5-Year Avg. ) 62. 95% Return On pluss (5-Year Avg. ) 10. 72% Management force Income/Employee 24. 33 Revenue/Employee 400. 99 gillyflower Turnover 8. 66 Asset Turnover 1. 41 NET WORTH ANALYSIS OF AVP (2008 IN MILLION) product proportionalitys Growth rate = (current year base year) / base year * 100 voice 2009 Growth rate in sales 3. 23 2008 3. 76 2007 0. 5 200 8 Growth rate in net income 45. 41 Stockholders Equity + thanks adult $ 872,876 Net Income * 5 $ 1,557,025 Share price * Net Income 34. 74 * 311,405 = 10,818,210 numeral of Shares Outstanding * Share Price 227,035 * 34. 74 = 7,887,196 Method Average 5,283,826. 70 FINANCIAL ANALYSIS The financial analysis for Hershey will be provided giving by liquidity ratios, leverage ratios, activity ratios, and profitability ratios as following. gainfulness RATIOS From an accounting standpoint, profitability is defined as business gain in an activity.The measures used in this percentage detail how profitable the firms operations are and how well the firm provides a remember on capital. The ratios for profitability analysis are retrogress on pluss, sales margin, apply on uprightness, and the dividend tolerateout ratio. Return on Assets Return on additions (ROA) measures a companys cogency in generating profits from its available assets. This is calculated by dividing net incom e by total assets. An increasing ratio indicates higher efficiency. Hersheys ROA improved from 5% in 2007 to 9% in 2008 indicating that Hershey became more economical over the 2008 fiscal year.Return on Equity The return on paleness (ROE) is a measure of how well a company is able to return a profit using the shareholders investment. It is calculated by dividing net income by the shareholders equity. A higher fare indicates a better return from shareholders investments. Hersheys return on equity improved from 36% in 2007 to 98% in 2008, indicating a higher efficiency and better return from shareholders investment. Improvements were state between 2007 and 2008 for Hersheys ROA, ROE, Gross Profit Margin, Operating Profit Margin, Net Profit Margin and Earning Per Share were increased proportionally.LIQUIDITY RATIOS A companys liquidity can be described by how tardily a company can pay off short-term debts, in specific those due in the fiscal year. Current Ratio The current ratio g ives a strong measure of a companys liquidity. It compares the cash and cash equivalents plus any current assets that will be turned into cash within a year to current liabilities that must(prenominal) be paid within the year. This ratio indicates how well a company can pay its current debts. It is calculated by dividing current assets by current liabilities. Hersheys current ratio improved from 0. 8 in 2007 to 1. 06 in 2008. Although this is an improvement, a ratio of 1 or better is desired in aver to show the ability to pay of all current debts with current assets. Quick Ratio The quick ratio is similar to the current ratio. Instead of using all current assets, the quick ratio just now uses cash, market securities, and accounts receivables to compare against current liabilities. This is done to further narrow the assets to those that can more quickly be turn into cash. Hersheys quick ratio improved from 0. 51 to 0. 59.Although an improvement can be seen, a more desirable ratio would be closer to 1 so that debts could be paid with current cash and cash equivalents. All measures of liquidity showed improvements for Hershey between 2007 and 2008. This is more often than not due to Hersheys ability to generate a great amount of operational cash flows between the two years. The improvement in current ratio and quick ratio shows an improved ability to pay off short term debts with current assets, which is also indicative that future payments of the long term debt will be possible. ACTIVITY RATIOSActivity in a firm is typically categorized as creation of product and despicable product out the door for sales. Activity measures focus on these actions and prise how a firm uses its assets to generate revenues. If a company is able to habituate its assets efficiently, fewer funds from financing are needed. The ratios analyzed in this section are roll turnover and asset turnover. Asset Turnover Asset turnover takes an overall focus on how the company uses all of its assets to generate revenues. A higher figure of speech is desired because it indicates that each dollar of asset is producing a greater amount of revenue.It is calculated by dividing the companys revenue by the total amount of assets for the current year. Hersheys asset turnover ratio improved from 1. 16 in 2007 to 1. 41 in 2008. This shows that Hersheys was more efficient in using its assets between evaluation periods. Inventory Turnover Inventory turnover is a measure of how often within a year that inventory is sold and replaced. It is calculated by dividing cost of goods sold by inventory. A high ratio indicates efficiency and a high rate of sales. Hersheys inventory turnover slimly improved from 8. 24 in 2007 to 8. 6 in 2008. Improvements were seen in inventory and asset turnover ratios. Hersheys assets decreased in value while revenues increased, resulting in a more efficient use of assets. LEVERAGE RATIOS A companys leverage defines how a company handles its debt. Co mpanies that have a high leverage can have difficulty paying moxie debts, securing new debts from creditors, and are usually higher risk. But, these companies can also grasp tax advantages and gain large returns from investing. The ratios analyzed in this section include the debt ratio, debt to equity ratio and imes invade earned ratio. Debt Ratio The debt ratio indicates how much debt a company has relative to its assets. This ratio is calculated by dividing total liabilities by total assets. This ratio is one of the components typically used by investors to determine the risk level of a company. A lower number is favored because it shows the company has a larger percentage of assets when compared to liabilities. Hersheys debt ratio increased and deteriorated from 0. 762 in 2005 to 0. 836 in 2006. This is due to a decrease in company assets while liabilities increased.The increase in liabilities can be noted most in the long-term liabilities. This adds risk to Hersheys from an i nvestment standpoint. Debt to Equity Ratio The debt to equity ratio is a measure of what proportions of debt and equity are used in its financing. It is also a measure of a companys financial leverage. The ratio is calculated by dividing total liabilities by stockholders equity. A lower number is favored because it indicates a higher amount of shareholders equity when compared to liabilities. Hersheys debt to equity ratio increased and deteriorated from 6. 16 in 2007 to 10. 2 in 2008. This is largely a result in Hersheys large decrease in shareholders equity. Times Interest Earned Ratio The time interest earned ratio gives shows how well a company is able to pay its interest expenses with mesh before taxes. The number represents how many multiplication over the interest expense can be paid with the earnings before interest. A higher number is favored. The ratio is calculated by dividing earning before interest and taxes (EBIT) by net interest expense. The times interest earned rat io for Hersheys increase from 3. 87 in 2007 to 6. 03 in 2008.Hershey achieved many improvements in their financial ratios. Between 2005 and 2006, Hershey showed improvements in many areas. Their overall profitability improved. Liquidity also improved in all areas. This can be attributed to their ability to generate a greater amount of operational cash flows. Because of their increased liquidity, Hershey shows that they are in a better position to pay off their debts and is able to distribute their earnings to stockholders more readily. G. stead Matrix 2. 44, -1. 06 2. 44, -1. 06 6 5 4 3 2 1 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 -1 -2 -3 -4 -5 -6 CompetitiveIS ES CA FS buttoned-up Aggressive Defensive X 6 5 4 3 2 1 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 -1 -2 -3 -4 -5 -6 Competitive IS ES CA FS Conservative Aggressive Defensive X Financial Position (FP) Return on Investment ROE, ROA+4 Leverage+2 Earning Per Share+5 Inventory+3 Liquidity+4 Subtotal (FP) +18 Industry Position (IP) Growth potential+6 Extent leverage+5 Profit potent+5 Productivity+4 Subtotal (IP) +20 Competitive Position (CP) Market share -5 Product quality -1 Control over suppliers and distributers-2 Subtotal (CP) -8 Stability Position (SP) Barriers to entry into market-4Demand variability-6 Competitive pressure-6 Subtotal (SP) -14 x-axis = -2. 66 + 5= 2. 44 y-axis = -4. 66+ 3. 6= -1. 06 Based on this formula, it shows that The Hershey company x-axis is 2. 44 and y-axis is -1. 06. Therefore firms directional vector is located in the lower-right or competitive quadrant of the SPACE Matrix. In other word, The company has competitive advantages in a growing industry, The Hershey should pursue competitive strategies which include backward, forward and horizontal desegregation market penetration market development and product evelopment. H. Grand dodge Matrix Quadrant IV business have a strong competitive position but are in a slow-growth industry. Hershey has the strength to launch diversified into more promising growth area such as India and China. The company also has characteristically high cash-flow levels and limited internal growth need as the result of 86% market share in the States. I. Boston Consulting Group (BCG) Matrix BCG is a private management consulting firm base in Boston. The purpose of BCG Matrix is graphically shows the companys position in terms of relative market share and industry growth.Hershey is in the Star quadrant because Hershey is leading in terms of market share in America and the growth rate sale is higher than zero for several years. As the result, the Star quadrant indicates that Hershey has good long-run opportunities for growth and profitability. To maintain this position Hershey need a secure investment especially in global market and to strengthen its preponderant position. Strategies that is best for Hershey includes market penetration, market development, product development, and forward, backward and horizontal integration. J.The Internal-External (I E) Matrix The IFE Total Weighted Score Strong Average Weak 3. 0 to 4. 0 2. 0 to 2. 99 1. 0 to 1. 99 High IFE = 3. 04 IFE = 3. 04 I II III EFE = 3. 27 EFE = 3. 27 3. 0 to 3. 99 median(a) IV V VI The EFE Total Weighted Score 2. 0 to 2. 99 Low VII VIII IX 1. 0 to 1. 99 Key Grow and build Hold and maintain Harvest or diverstitureThe Internal External (IE) Matrix The IE matrix is based on two key dimensions such as the IFE total weighted score and the EFE total weighted score. The total weighted scores allow face of the corporate-level IE Matrix. The result from IE Matrix states that Hershey Company is appropriate for partitioning 1 or can be described as grow and build. The most appropriate strategies for this division can be intensive market penetration, market development, and product development or company can also consider intensive backward integration, forward integration and horizontal integration.Based on the interpret ation, suggest two best preferences that the company could pursuit, then perform QSPM matrix. K. QSPM strategical Alternatives Key Internal Factors Weight Alternative 1 Global Expansion Alternative 2 Develop Organic Products Strengths AS TAS AS TAS 1. share Hershey products via Godrejs distribution network in India 0. 06 4 0. 24 2 0. 18 2. Advertising expenses for promote iconic brands. 0. 09 4 0. 36 3 0. 27 3. Relies on special promotions 0. 07 3 0. 21 2 0. 14 4.The company has expanded its global presence. 0. 08 4 0. 32 2 0. 12 5. Hershey has special editions product that are themed with events. 0. 06 - - - - 6. The company portfolio of healthy snacks has expanded 0. 08 2 0. 16 4 0. 32 7. Acquiring non-chocolate and nutritional products 0. 09 2 0. 18 4 0. 36 8. Products are sold to more than 2 million retail outlets. 0. 07 - - - - 9. Hershey Centre of Health supported research on consumer preferences and process innovations. 0. 06 2 0. 12 3 0. 18 10. Operating profit Marg in 14% (2008) 15% (2009) 0. 6 - - - - Weaknesses 1. Plans to close online gift business. 0. 06 3 0. 18 1 0. 06 2. The company projects a reduction of 1,500 positions. 0. 05 2 0. 10 1 0. 05 3. Plans to discontinue Cocao Reserve brand Starbucks chocolate partnership. 0. 06 3 0. 18 1 0. 06 4. Hersheys iconic brands are instantly recognized within the domestic market 0. 06 - - - - 5. The companys long-term debt increased 0. 05 - - - - SUBTOTAL 1. 00 2. 05 1. 74 Global Expansion Develop Organic Products Opportunities AS TAS AS TAS 1.Organic foods products are the fastest growing sectors. 0. 10 1 0. 10 4 0. 40 2. Seasonal sales account for 10% 0. 05 - - - - 3. Nestles image has suffered. 0. 04 3 0. 12 2 0. 08 4. Consumers are increasingly aware of the nutritional value. 0. 07 3 0. 21 4 0. 28 5. Confectionery products projected global market value of $107. 4 billion by 2010 0. 09 3 0. 27 2 0. 18 6. Chocolate currently accounts for 55. 8% of the markets overall global value. 0. 0 8 - - - - Threats 1. Mergers and acquisitions have influenced both the market share. 0. 01 4 0. 04 2 0. 02 2. Nestle expanded nutritional product. 0. 08 3 0. 24 4 0. 32 3. Nestle entered the organic product segment. 0. 08 3 0. 24 4 0. 32 4. Cadbury manufactures a line of products with no artificial colors or flavorings 0. 07 1 0. 07 2 0. 14 5. Cadbury has a 71% market share in India, and 53% Australia. 0. 06 3 0. 18 2 0. 12 6. Mars Nutrition and Health Well being has developed low-fat and healthy snacks 0. 07 2 0. 14 3 0. 21 7. International wholesale sugar prices may reach 40 cent a pound 0. 06 - - - - 8.Cocoa future contract prices in 2008 ranged from $ 0. 86 to $1. 50 per pound 0. 05 - - - - SUBTOTAL 1. 57 2. 07 SUM TOTAL ATTRACTIVENESS SCORE 3. 66 3. 81 As the result of QSPM, we consider two alternative strategies As followinga) Global expansion b) Develop organic products The sum total attractive scores are 3. 66 and 3. 87. The analysis indicates that Hershey should de velop organic products. L. Recommendations From the evaluations of the companys conditions, performance, and the analysis provided from SWOT matrix, IFE-EFE matrix, and Grand strategy matrix.We recommend three specific strategies as following 1) Expand to global market Hershey has recently market share 86% in America and it is well known in America as the chocolate manufacturing business since 1906. On the other hand, In the global market, Hershey is the third rang next to Nestle and Cadbery. Hershey needs to continue to focus on the global market. Hershey currently has a limited presence in many areas of the world. However, compare to the actual plan strategies of the company, they have begun to expand into new areas such as China and India. We are suggesting the new organization structure to Hershey Food Corporation.In this structure, we have suggested continental president, which will help to complete globally or to increase the market share globally because they will have the ex perience of the particular continents and they will work according to market conditions. The Hershey Company needs to go international advertizing to promote the product as well as they have to find out the new bring of distribution and adopt the new channels to increase the sales. For the cost of expand to global market, the company must pass away more in terms of marketing that amount is indicated in the projected income statement. ) Continue chocolate partnership with cocoa store, and online gift business Hershey should continue to provide new chocolate flavored coffee product in supermarkets and coffee stores. This allows Hershey to market to new segment, more consumers , and participate in new trends. Besides, Hershey should continue online gift business to get the new channel to increase the sales as well as to provide the seasonal products and the gifts that could be personalized by the consumer. 3) Develop organic product People have acquire much more aware of the variou s factors that negatively affect their health.Chocolate and other candy are viewed as an unhealthy snack. Organic food products are one of the fastest growing sectors. Therefore, Hershey needs to continue to expand the market healthy products in order to gain a greater market share. If Hershey continues to market the products they already have in categories and continues to develop new products that mention the healthy to the public, then their revenues will increase throughout the years as the projected income statement as following. Projected financial statementsProjected The Hershey company Statements of Income In thousands of dollars except For the year ended December 31 2008 2009 2010 2011 Net Sales 5,132,768 5,298,668 5,671,009 6,238,110 Costs and Expenses Cost of sales 3,375,050 3,245,531 3,255,801 3,402,798 Selling, marketing and administrative 1,073,019 1,208,672 1,426,477 1,511,119 Business realignment and 94,801 82,87 5 83,433 90,080 blemish charges, net Total costs and expenses 4,542,870 4,537,078 4,765,711 5,003,997 Income before Interest and Income Taxes 589,898 761,590 905,298 1,234,113 Interest expenses, net 97,876 90,459 96,434 111,070 Income before Income Taxes 492,022 671,131 808,864 1,123,043 Provision for income taxes 180,617 235,137 299,065 393,065 Net Income 311,405 435,994 509,799 729,978 Projected The Hershey Companys Balance Sheet all numbers in thousands) Period Ending 2008 2009 2010 2011 Total Asset 3,634,719 3,675,031 4,272,732 4,913,642 brusk term debt 501,504 39,313 285,480 157,014 Long term debt 1,505,945 1,502,730 1,541,825 1,418,479 Stockholders Equity 318,199 760,339 937,601 1,021,985 M. Evaluation of the recommendations based on Islamic perspective Islamic perspective As we know, Hershey produces good quality of chocolate and Chocolate is made from plants, which means it contains many of the health be nefits of sad chocolate.These benefits are from flavonoids , which act as antioxidants. Moreover, the other benefit that we are able to gain from chocolate such as write down Blood Pressure, Lower Cholesterol, endorphin production and so on. Allah orders us to consume good thing and try to avoid the meal that it will damage our bodies. As Allah said Messengers eat of the good things and do good surely i know what you do Chapter 23 , Verse 51 eat of the lawful and good things with which allah has provided you and be thankful for the favors of allah if it is he you worship Chapter 16 , Verse 114 Moreover, Hershey produce halal product to consumer. The ingredients that are utilized to produce chocolate are not the ingredient that Allah forbidden as said in record. He has only forbidden you what dies of itself and blood and flesh of swine and that over which any other break than that of Allah has been invoked, but whoever is driven to nec essity, not desiring nor exceeding the limit, then surely Allah is forgiving, charitable Chapter 16 , Verse 115 Hershey also has policy to maintain and concern about environment. It was one of the companies who are in World cocoa fanny which support environmental project. This project includes non-chemical pest management practice and encourage sustainable farming practice to support ecosystem in the region.Allah does not whap people who harm environment as said in Quran ? Seek not mischief in the land, for Allah loves not those who do mischief. (Quran 2877) According to scientists and philosophers, man is considered as the major factor in impress the natural balance of the universe. Man interferes intentionally or unintentionally in the earths ecosystems by impairing its perfect order and precise sequence. However, it seems that man has cut off his nose to spite his face and he now is the victim. Grave dangers are anifested in pollution of the air, water, soil, outer space and others, as well as the irrational exploitation of the environments resources, and inconsistent distribution of human settlements. All these factors have lead to different problems, all of which are marked by a disturbance to the earths natural balance. If companies or industries exploit or use up natural materials and environment, all damage will revert back to them. As promised Quran. Mischief has appeared on the land and sea, because of (the need) that the hands of man have earned, that (Allah) may give them a taste of some of their deeds in order that they may turn back (from evil). (Quran 3041) REFFERENCES About Hershey. Retrieved on 02/02/12. From http//www. thehersheycompany. com/about-hershey. aspx Chocolate is good for you. Chocolate Trading Co. July 13th, 2005 November 1st, 2007. Financial Report. Retrieved on 02/02/12. From http//www. thehersheycompany. com/ investors/financial-reports. aspx. Fred R. David, Strategic Management Concept and Cases, Hershey Company2009 13th Edn.Page 111-119. Pearson Education, 2011 Halal and Haram Foods according to Quran. Retrieved on 02/02/12. From http//www. parsquran. com/eng/ compositors case/halal. htm Karem S. Ghoneim (Prof. ), Quran Recitations The Quran and the Environment . Retrieved on 02/02/12. From http//www. whyquran. com/877/content/blogsection/0/98/9/18/ Mark Stibich, Health Benefits ofChocolate. Retrieved on 02/02/12. From http//longevity. about. com/od/lifelongnutrition/p/chocolate. htm Organizations key Competitors. Retrieved on 02/02/12. From www. foodproductiondaily-usa. com