Firm Level Research & Analysis

Confectionery has been one of the strongest markets out there ever since its inception. According to recent statistics, about 263.17 million Americans have consumed chocolates and other derivatives so far in the year 2018 CITATION Stand7 \l 1033 (Statista.com, n.d.). In contrast to this, the confectionery industry all over the world had a revenue of 186 billion USD in just the year 2017. In light of this, it could be seen how large and encompassing the industry is. In this article, an analysis of one of the most dominant companies in the United States, The Hershey Company, would be analyzed. This includes the firm’s basic information, strategic units, and a CC analysis among others. All in all, the authors of this article believes that although being a relatively small company in the world’s confectionery industry, looking at the Hershey Company could provide a much more better understanding of the whole industry.
1 Firm Level Research & Analysis
Despite its size and name, The Hershey Company is a relatively small company in its industry. Hershey’s Net Sales for 2017 totaled $7,515.4 million, a 1.0% increase from the previous year. Excluding foreign currency, however, Net Sales increased by .8% in 2017 (Hershey Co. 10-K, 2017). In conjunction, Net Income for 2017 totaled $783.0 million, a $53.0 million increase from 2016. As a late-stage company and one that occupies 45% of its market, Hershey’s return on investment has recently made a promising turnaround. Its second-quarter reports show that Hershey Co.’s return on investment as of July 1, 2018 is 34.29%, which was a significant change from its negative Return on Investment rates in previous quarters (Hershey Co. 10-K, 2017).
The Hershey Company is comprised of various brands that bring in revenue and increase its return on investment as a company. All of these brands manufacture ready-made products distributed to companies from which the consumer purchases the final product. The three most major brands of Hershey Co. include Hershey’s, Reese’s, and Kisses which are brands that sell chocolate products as well as baking products, toppings, and serving syrups. The Hershey’s and Reese’s brand additionally include chocolate spreads, snack bites, and mixes. To keep with the fluctuating trend of customer demand for premium chocolate, Hershey Co. supplies premium chocolate in the United States through the Scharfeen, Berger, and Dagoba brands. Other popular chocolate and non-chocolate brands owned by Hershey Co. include barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Lancaster, Payday, Rolo, Twizzlers, Whoppers, Krave meat snack products, Popwell snacks, SkinnyPop popcorn, Oatmega, Paqui, Tyrells, and York (Hershey Co. 10-K, 2017). Alongside its lead chocolate brands, Hershey Co. was placed as the third highest gum and mint product seller in 2015, encasing gum and mint brands Ice Breakers, Breathsavers, and Bubble Yum (Hershey Co. 10-K, 2017).
While Hershey continues to dominate the Chocolate and Confectionery Manufacturing from Cocoa Beans Industry, Hershey’s major competitors are Mars and Nestle, both of which earn a much higher income than Hershey. As of the most recent Financial Year, Mars earned a revenu...