Strategic Management of Hershey's Company and Cocoa Shortage Analysis

This report provides a strategic analysis of Hershey's Company, examining its market position and holdings. It includes a PESTEL analysis of cocoa production conditions in Brazil and Cameroon, exploring political, economic, social, technological, legal, and environmental factors. The report also addresses the global cocoa shortage, detailing the adulteration of cocoa and the impact of production methods. It concludes by emphasizing the importance of sustainable practices in the chocolate industry. The analysis covers various aspects of the business environment, including the influence of political changes, economic activities, social factors, technological advancements, and legal regulations on Hershey's operations and the cocoa supply chain. The report also highlights the significance of environmental considerations and the need for green innovations within the chocolate industry.

Running head: STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
Strategic management of Hershey's Company
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1STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
Table of Contents
1. Introduction..................................................................................................................................2
2. Detailed Analysis and Summary of the Brazil and Cameroon Cocoa Production......................2
2.1. PESTEL Analysis of Brazil Cocoa Production Situations...................................................2
2.2. PESTEL Analysis of Cameroon Cocoa Production Situations............................................3
3. Hershey to Provide an Exposure Analysis to the World's Growing Cocoa Shortage.................6
4. Conclusion...................................................................................................................................7
Reference List..................................................................................................................................8

2STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
1. Introduction
The objective of the paper is to conduct strategic analysis of Hershey’s company and
analysis of world’s growing cocoa shortage will be carried out. The report will also offer
synopsis of the company along with its holdings, porters five forces and recent market position.
Moreover, detailed analysis and summary of Brazil and Cameroon cocoa production conditions
through using PESTEL analysis will be carried out.
2. Detailed Analysis and Summary of the Brazil and Cameroon Cocoa Production
2.1. PESTEL Analysis of Brazil Cocoa Production Situations
Political
 Changing direction encompassing sustenance measures and displaying activities
 Government security within new developing economies – risks can be considered as a
major part of globalization
 Altering worldwide controls – well known practice along with making adjustments to
various political powers
Economic-
 Learning of developing expansion, monetary development rates along with income levels
 Altering spending plans that can be considered as cost cognizant customer.
 Increasing cost of crude material products in connection with requirement of source from
supportable providers

3STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
Social- Chocolate industry in Brazil considers certain social factors. Chocolate companies in the
country and it are gathered that the consumers preferred cocoa, coffee and liquid chocolate.
Chocolates and certain other products offered by companies are acceptable socially. In addition,
there are certain concerns in the western world that contributes to rising instances of corpulence,
that are mostly among youngsters (Fayard et al. 2014). Several nutritionists motivate people to
diminish their use of chocolate and sweet, which is probably that, has an impact on chocolate
companies deals later on.
Technological- It is gathered that, innovation has altered chocolate companies’ creation and
pressing procedure all through years, initiating with help of several mix machines that offers
espresso and cocoa picks up. Late moves in such manner incorporate the utilization of pathogen
testing frameworks and recording licenses for warm safe chocolate (Rothaermel 2015).
Legal- At last, innovation altered chocolate procedure of creation and pressing throughout years,
beginning with use of new mix machines with espresso and cocoa beverages. Late moves
considers adequate utilization of pathogen testing structures and recording licenses for warm
chocolate.
Environmental- The principle factor that influences all organizations is nature. Non-renewable
energy sources are utilized as a part of colossal sums and henceforth expanding in costs. There
might be options required later on. Besides, every brand needs a very much created ecological
picture in the market (Kew and Stredwick 2017). Subsequently, chocolate industry must attempt
to begin putting resources into green innovations that is condition agreeable procedures.
2.2. PESTEL Analysis of Cameroon Cocoa Production Situations
Political

4STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
The difference in administering party shape work to moderates combining with Liberal
democrats might affect chocolate companies in negative or positive manner. Certain
confinements based on experienced labours section from outer Cameroon and forcing duties will
impact future speculation situation along with investor profit instalments (Jewell and Saenger
2014).
Economic
Economic activities might result in huge improvements in chocolate companies
operation. The recent procurement to Kraft sustenance makes huge trouble with partners along
with increaased refusal from government division. Chocolate companies, one of esteemed
chocolate brands is gathered from British Ownerships. The legitimate notification based on
working hours of representative is another issue that considers the working hours and additional
consideration for talented workers. The legitimate activities for maintaining industrial facility
hours might affect Cadbury in an unfriendly way (Khattab, Fonn and Ali 2017). Another
legitimate concern is with the medicinal services of clients and people groups that considers
using chocolte items in like manner. The weight issues along with ensuing less are considered for
to National wellbeing administration (NHS). Most health concerns caused due to utilization of
cocoa items are talked about in some instances. In the event that there are legitimate, control for
application of substance in chocolate is forced that can affect chocolate companies in a converse
way.
Legal

5STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
The universal legal factors affect chocolate companies business operation and worldwide
operations too. The focus of clients on cost cutting and constrained use spending impact
chocolate companies deals to downstream. The direction in loan fees might affect the
development ventures of chocolate companies. Cash attained by clients and partners influence
them to remain on obtaining all sweet items rather than putting resources into chocolate
companies (Steger 2015). The Acquisition of chocolate companies’ nourishment influences a
decent incentive to investors, to mean while the reliance of association to monetary situation may
choose the future estimation of chocolate companies shares. The national the lowest pay
permitted by law will be additionally reliant to monetary circumstance influencing chocolate
companies, on the off chance that it is cut down, the operational cost might decrease in worker
instalments yet it might impact conversely in deals figures.
Social
The social factors within chocolate industry and eating are expanding. In view of
examination from future years, population of the nation for the most part focussed on snacks and
crisps rather than chocolates, sweet and gums. Such intense change affects chocolate companies
in deals figures. Most of chocolate companies’ world considers maintaining an exceptional
behaviour to guests along with analysing the chocolate companies producing process. The rapid
promotion is for the most part focussed on chocolate companies’ world program. Recent and
roundabout preferences might be used to neighbourhood group around the chocolate companies’
world region (Majaro 2013). This might attain Positive or negative influence on chocolate
companies business section. General society bans on fixings using as chocolate companies
notwithstanding guidance from dieticians pose more risk to deals.

6STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
Technological factors
The technological factors are maintained properly being developed of chocolate
companies in pioneering work area. The usage of new mix machines along with espresso and
cocoa enhanced imperative significance in future innovation of chocolate companies. The cost of
machineries, maintained of new hardware along with of innovation streams makes overhead
costs to chocolate companies’ certain arrangements (Pisapia, Jelenc and Mick 2016).
3. Hershey to Provide an Exposure Analysis to the World's Growing Cocoa Shortage
It has been offered that the English cocoa has been widely adulterated with starch
materials like potato flour or sago in masking the additional cocoa butter. In order to
manufacture cocoa, most of the cocoa butter is eliminated in the manufacturing process. After
the separation of fat and the residue is ground, the organisation includes small percentage of
various substances like starch in preventing caking or potassium bicarbonate to neutralise the
astringents and natural acids along with making the dissolving process of the liquid easy. The
food value of Cocoa is extremely high, since it contains 20% protein, 40% carbohydrate and
40% fat. It is stimulating slightly due to the presence of theo bromine and alkaloid, which are
closely associated with caffeine.
However, the processing of the cocoa beans is complicated. There is citation of fruit
harvest or fermented in a pulpy state for three to nine days during which the seeds are killed
through heat and turning them brown. The fermentation activates the enzymes imparts the
materials that would provide the beans their features, chocolate flavour during roasting. After
this, the beans are sold in the global markets. The African nations harvest nearly two-thirds of
the total global output. The remainder is obtained from the nations of South America, mainly

7STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
Brazil and Ecuador. The trading of the crop is carried out on global commodity future markets.
The attempts by manufacturing nations to stabilise process through global agreements have little
success.
4. Conclusion
The report offered synopsis of the company along with its holdings, porters fiove forces
and recent market position. Moreover, detailed analysis and summary of Brazil and Cameroon
cocoa production conditions through using PESTEL analysis will be carried out. The paper also
revealed that the principle factor that influences all organizations is nature. Non-renewable
energy sources are utilized as a part of colossal sums and henceforth expanding in costs. There
might be options required later on. Besides, every brand needs a very much created ecological
picture in the market. Subsequently, chocolate industry must attempt to begin putting resources
into green innovations that is condition agreeable procedures.
It has been offered that the English cocoa has been widely adulterated with starch materials like
potato flour or sago in masking the additional cocoa butter. In order to manufacture cocoa, most
of the cocoa butter is eliminated in the manufacturing process. After the separation of fat and the
residue is ground, the organisation includes small percentage of various substances like starch in
preventing caking or potassium bicarbonate to neutralise the astringents and natural acids along
with making the dissolving process of the liquid easy. The trading of the crop is carried out on
global commodity future markets. The attempts by manufacturing nations to stabilise process
through global agreements have little success.

8STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
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9STRATEGIC MANAGEMENT OF HERSHEY’S COMPANY
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