The Hershey Company: Strategic Audit of the Organization

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The Hershey Company is a leading manufacturer, seller, and distributor of chocolate and confectionery products in the United States. The organization also distributes its products to numerous countries worldwide under more than 90 brands. This company’s rich history denotes that Hershey has utilized effective practices to run the business. However, the internal environment analysis reveals that the company has strengths and weaknesses, but the report demonstrates that positive features outweigh the disadvantages.

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To begin with, one should comment on the corporate structure of the Hershey Company. This business is a publicly-traded company, which contributes to some advantages. On the one hand, Hershey has increased access to capital-raising opportunities because both public and private entities and investors can become shareholders. On the other hand, the Board of Directors consists of twelve experienced and professional members who are responsible for using the existing resources to develop the business (Hershey Investors, n.d.). This corporate structure can be considered an internal strength because it results in a body of knowledgeable individuals dealing with making decisions.

It is also reasonable to draw attention to Hershey’s corporate culture because it can be significant for identifying internal strengths and weaknesses. On the one hand, the company invests much effort in promoting goodness. This term denotes that Hershey deals with environmental issues, combat systemic racism, and provides its employees with safe working conditions (Hershey, 2020). On the other hand, the company has the Supplier Code of Conduct to ensure that it cooperates with partners that uphold high ethical standards. This document opposes child labor, human trafficking, discrimination of all types, and harassment and promotes the freedom of association, fair wages, and worker health (Hershey, 2019). This information demonstrates that the corporate culture can be considered another internal strength because the Organization component of the VRIO Framework reveals that the company’s internal structure is its competitive advantage.

Regarding internal strengths and weaknesses, it is rational to focus on corporate resources, and marketing deserves attention. According to Bhasin (2019), Hershey spends more than 500 million dollars annually on advertising and marketing. This information supposes that the company invests sufficient resources to gain a competitive advantage. Consequently, Hershey has power in one of Porter’s forces: competition in the industry.

The company under analysis also impresses with overall financial performance. Firstly, Hershey had sales of 7.5 billion dollars in 2017 (Bhasin, 2019). Secondly, this state of affairs became a 40% rise in benefits compared to 2016 (UKDiss.com, 2021, para. 10). This information demonstrates that it can be expensive for other companies to imitate the organization’s resources and capabilities, which reveals the company’s advantage regarding the Imitability component of the VRIO Framework. These financial details demonstrate that Hershey has sufficient resources to succeed in the market.

The company also invests in research and development, and the COVID-19 pandemic highlighted this area. In particular, Hershey (n.d.b) draws sufficient attention to determining consumer behaviors and identifying how they have changed because of the pandemic. This information indicates that the company tries to make shopping experiences safer and more convenient for people in the new everyday world where the virus has brought many unforeseen challenges.

The analysis of the operations and logistics sphere reveals that Hershey deals with minimizing the power of suppliers according to Porter’s five forces. According to Hershey (n.d.a), the company deals with a global supply chain, while the Supplier Code of Conduct above contributes to finding the most professional partners. However, a weakness is that Hershey fails to have an organized strategy for purchasing cocoa (Bhasin, 2019). It is also necessary to claim that the company depends on a few cocoa suppliers, which is a potential disadvantage.

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Human resources can be considered another strength of the company. According to Statista (2021), Hershey employed more than 15,000 full-time employees worldwide. This workforce can be sufficient to ensure the operation of Hershey plants in numerous world countries. The efficient corporate structure and culture result in the fact that this workforce is organized and aims at achieving shared goals, which contributed to reaching the company’s objectives.

Finally, Hershey developed information technology, which is another strength. In particular, the company wanted to understand its consumers and “created a new approach to consumer intelligence and analytics” (Hershey, n.d.b, para. 3). Hershey Intelligence Engine pairs industry data with retail experience to predict consumer behavior. Furthermore, the company offers numerous online possibilities for customers. Consequently, potential clients are given decent opportunities to improve their shopping experience.

In conclusion, the report has demonstrated that the Hershey Company has many internal strengths. They include the corporate structure and culture, sufficient financial resources spent on marketing, research efforts, information technology, and others. However, the organization is not free from disadvantages, and an internal weakness refers to the failure to develop an organized strategy to purchase cocoa to limit the suppliers’ power. The analysis reveals that the positive features outweigh all the possible inefficiencies.

References

Bhasin, H. (2019). SWOT analysis of Hershey’s. Marketing91. Web.

Hershey. (2019). The Hershey Company supplier code of conduct [PDF document]. Web.

Hershey. (2020). Goodness in action. 2020 sustainability report [PDF document]. Web.

Hershey. (n.d.a). Innovating to meet the needs of chocolate and snack lovers. Web.

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Hershey. (n.d.b). Leveraging real-time consumer intelligence. Web.

Hershey Investors. (n.d.). Board of directors.  Web.

Statista. (2021). Number of full-time employees of the Hershey Company worldwide from 2008 to 2020. Web.

UKDiss.com. (2021). Business analysis of the Hershey Company. Web.

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BusinessEssay. 2022. "The Hershey Company: Strategic Audit of the Organization." September 8, 2022. https://business-essay.com/the-hershey-company-strategic-audit-of-the-organization/.

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BusinessEssay. "The Hershey Company: Strategic Audit of the Organization." September 8, 2022. https://business-essay.com/the-hershey-company-strategic-audit-of-the-organization/.