Financial Ratios and Hershey

A. TWO KEY LESSONS LEARNT FROM THIS CASE Hershey Company is famous known for being the biggest manufacturer of chocolates and confectionary crossings in North America and grocery point of intersections in over 60 countries human beingswide. In 2009, Hershey sales up to 3. 23 percent. advertisement expenses ontogenesis by 46 percent as the beau monde spread overd to recognize iconic brands such(prenominal) as the Hershey Kiss and Reeses overlaps. delinquent to lower commodity damages, the company externalizes to bankrupt their Cacao Reserve brand as soundly as their Starbucks chocolate fictitious characternership. The company similarly plans to finishmouthed their online gift commerce.The company spread out its global presence via articulatio ventures in china and India. From this case, we found 2 key lessons as following (a) The first lesson is virtu altogethery the master(prenominal) of expanding to global commercialise (b) The second lesson is about the wideness for the true to keep developing customer preferences. It is important for company to focus on how to machinate global crossroad strategy to penetrate growing international trades. Therefore, Hershey should come up with new strategies in finance, marting and production department to complete globally and to attach the customer satisfaction and mart partake.B. deal Statement Since we could not find a vision statement of Hershey company then we suggest a vision as below Achieving consumers needs which making chocolate to a greater extent healthy, delicious and delightful for deportment From our opinion, this vision is clear in confines of to help the company to see where the company is going on in the in store(predicate) which the company much(prenominal) concern about customer need and bump offer the product of innate and organic chocolate for health. harmonise to researchers led by Natalie Rose, MD, of the University of California at San Diego.The result sug gests several(prenominal) possible relationships surrounded by eating chocolate and goallyness, 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 horm maven that act as an ati-depressant. Therefore, It captures the importance not only for healthy but alike the happiness of eating chocolate. C. Mission Statement The actual mission of the Hershey company is Bringing sweet moments of Hershey happiness to the world everyday To our stakeholders, this means Consumer Delivering choice consumer operate confecti iodinery experiences for all occasions. * Employees Winning with an aligned and charge organization while having fun. * Business Partner construction collaborative relationships for profitable growth with our customers, suppliers, and partners. * Shargonholder Creating sustainable time look on. * Communities Honoring our heritage through continued dedication to making a positive d ifference. The up-to-date mission consists of the following characteristics 1. Customer 2. Concern for survival, profitability, growth 3. doctrine 4. Self-concept 5.Concern for public image 6. Concern for employees Mission statement is often the most visible and public part of the strategic management process. The electric current mission is sufficient to remind the company on their attitude and outlook. However, it is important to complicate the nine characteristic, as mission statement would be more effective. From our abbreviation, the current mission lacks of other deuce-ace characteristics, which argon products, commercialize, and technology. These four characteristics argon important for the company in the long-run development. Thus, we think that the current mission fag be amend as follows Bringing sweet moments of chocolate Hershey happiness to the world every day To stakeholders, this means Consumer Delivering quality consumer with the lastest technology to driv e experiences for all occasions. Employee Winning with an aligned and empowered organization while having fun. Business Partners Building collaborative relationships for profitable growth with our customers, suppliers, and partners in the international market placeplace. make outholders Creating sustainable value. Communities Honoring our heritage through continued commitment to making a positive difference.D. External size up Opportunities 1. organic fertiliser foods products are one of the fastest growing sectors in the United States with a projected value of $26. 3 billion by 2011. 2. Seasonal sales such as Halloween and Valentines Day history for 10 percent of the annual sales in the industry. 3. come ons image, however, has suffered within the global community due to allegations about sourcing of deep brown from farms that employed children in Africa, as headspring as its selling tactics used to promote its infant milk substitutes in developing nations. 4.Consumers a re increasely aware of the nutritional value of various product ingredients with purchase decisions reflecting a preference for organic and nonadulterated products. 5. Confectionery products include chocolate, gum, cereal bars, and sugar confectionery products with a projected global market value of $107. 4 billion by 2010. 6. Chocolate currently accounts for 55. 8 percent of the markets general global value. Threats 1. Mergers and acquisitions in the past few years have influenced both the market share and product portfolio of global firms in the confectionery industry. 2. nose, 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. Nestle recently entered the organic products segment with projected sales of $24 billion by 2010. 4. Due to increase consumer concerns about artificial ingredients, the company Cadbury also manufactures a line of p roducts with no artificial colors or artificial flavorings under the Natural Confectionery Company. 5. Cadbury has a 71 percent market share in India, and enjoys a 53 percent market share in the chocolate category in Australia. . Due to increased consumer preference for low fat and organic products, spoil Nutrition and Health Well world has also developed a line of low-fat products and healthy snacks. 7. Some research analysts expect that international sell sugar prices may reach 40 cents a pound. 8. Cocoa future contract prices in 2008 ranged from $0. 86 to $1. 50 per pound, which represented a significant increase from 2007 prices. CPM Competitive Profile Matrix * Estimates for Hershey focused on similar product lines with Nestle, Cadbury and vitiate The Competitive Profile Matrix (CPM)Critical success factors Weight Hershey Nestle Cadbury Mars Rating Score Rating Score Rating Score Rating Score world-wide magnification 0. 2 4 0. 8 4 0. 8 3 0. 6 3 0. 6 pecuniary Positi on 0. 10 2 0. 2 4 0. 4 3 0. 3 2 0. 2 Advertising ampMarketing 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 Product Quality 0. 12 4 0. 36 2 0. 24 3 0. 36 3 0. 36 Price Competitiveness 0. 10 3 0. 30 3 0. 30 4 0. 40 3 0. 0 management 0. 08 2 0. 16 4 0. 32 2 0. 16 3 0. 24 positive 1. 0 3. 07 3. 26 3. 17 2. 75 The Competitive Profile Matrix (CPM) show that weighted draw of Hershey, Nestle, Cadbury and Mars. Nestle has got total weighted advance is 3. 26 which is steepest tag and Hershey is the third scores, less than Nestle and Cadbury. The CPM indicates that Hershey is the strongest in terms of Product Quality and Advertising ampMarketing. This means if Hershey is to be warlike, it has to focus on global expansion and market share. The External constituent Evaluation (IFE) MatrixKEY INTERNAL FACTOR WEIGHT RATING heavy fool OPPORTUNITIES Organic foods products are one of the fastest growin g sectors in the United States 0. 1 4 0. 4 Seasonal 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 boilersuit global value 0. 08 4 0. 32 Sub-total for Opportunities 1. 00 1. 60 THREAT WEIGHT RATING WEIGHTED gull 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. 08 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 existence 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 matrix 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 higher up average to the existing opportunities and threats. In other words, the companys current strategies are able to make advantage of the existing opportunities and minimize the squiffyial effects of external threats. E. Internal Audit Strengths 1. The Hershey and Godrej venture ordaining distribute Hershey products via Godrejs distribution network to over 1. 6 million outlets in India. 2. Advertisi ng 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 limited 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 variety 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 gentle Collection (milk chocolate peanut butter bats) created for the release of the movie Dark Knight. The company also encourages customers to personalise messages and gifts via its interactive home page. . Due to increased consumer preferences for healthy and organic products, the company portfolio of healthy snacks has expanded to include Payday Pro energy bars and sugar-free products such as Twizzlers. 7. Hershey, as well as other competitors in the industry, is acquiring nonchocolate products as well as nutritional products to complement its existing products. 8. Hershey products are sold to more than 2 million sell outlets, including wholesale distributors, chain grocery stores, convenience stores, and wholesale clubs as well as natural food stores. 9.Direct research on consumer preferences as well as process innovations are supported via the Hershey vegetable marrow of Health and Nutrition developed in 2007. 10. Operating Profit Margin 14%(2008) 15%(2009) scant(p)nesses 1. The company also plans to close their online gift business, which featured seasonal products and gifts that could be personalized by the consumer. 2. Due to global supply initiatives, the company projects a reduction of 1,500 sticks over the next 3-year period. 3. The company plans to discontinue their Cacao Reserve brand as well as their Starbucks chocolate alliance. 4.Hersheys iconic brands such as Hershey Bar, Hershey K isses, and Reeses are instantly recognized within the domestic 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 Nu trition developed 0. 06 3 0. 18 Operating Profit Margin 14% (2008) 15% (2009) 0. 6 3 0. 18 Sub-total for military capabilitys 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 positions 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 Based on the IFE evaluation shows that score for Strengths versus score for Weaknesses. Total weighted scores for Hershey is 3. 04 considered as higher up average which is indicates that the companys internal position is strong. Financial Ratio Analysis (2008) festering judge % (5-Year Annual Avg. ) ABC Company Sales 16. 22% sort out Income (5-Year Ann ual 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/Equity Ratio 10. 42 modern Ratio 1. 06 Quick Ratio 0. 59 investment consequences % Return On Equity 98% Return On Assets 9% Return On Equity (5-Year Avg. ) 62. 95% Return On Assets (5-Year Avg. ) 10. 72% solicitude Efficiency Income/Employee 24. 33 Revenue/Employee 400. 99 Inventory Turnover 8. 66 Asset Turnover 1. 41 NET WORTH ANALYSIS OF AVP (2008 IN MILLION) Growth proportions Growth rate = (current year tight year) / nates year * 100 Percentage 2009 Growth rate in sales 3. 23 2008 3. 76 2007 0. 5 2008 Growth rate in net income 45. 41 Stockholders Equity + Goodwill $ 872,876 Net Income * 5 $ 1,557,025 Share price * Net Income 34. 74 * 311,405 = 10,818,210 Number of Shares Outstanding * Share Price 227,035 * 34. 74 = 7,887,196 M ethod Average 5,283,826. 70 FINANCIAL ANALYSIS The financial analysis for Hershey will be provided giving by liquidity proportions, leverage ratios, activity ratios, and profitability ratios as following. PROFITABILITY RATIOS From an accounting standpoint, profitability is defined as business chance on in an activity.The measures used in this section detail how profitable the firms operations are and how well the firm generates a return on capital. The ratios for profitability analysis are return on assets, sales margin, return on impartiality, and the dividend overcompensateout ratio. Return on Assets Return on assets (ROA) measures a companys efficiency in generating profits from its available assets. This is calculate by dividing net income by total assets. An increasing ratio indicates higher efficiency. Hersheys ROA change from 5% in 2007 to 9% in 2008 indicating that Hershey became more in force(p) over the 2008 fiscal year.Return on Equity The return on equity (ROE) is a measure of how well a company is able to return a profit using the shareholders investment. It is reckon by dividing net income by the shareholders equity. A higher estimate indicates a fall apart 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 famed amidst 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 slowly a company can pay off short-term debts, in specific those due in the fiscal year. Current Ratio The current ratio mothers a strong measure of a companys liquidity. It compares the bills and cash equivalents plus any current assets that will be turned into cash within a year to current liabilities that must be paying(a) 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 desire in order 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 only uses cash, market securities, and accounts receivables to compare against current liabilities. This is done to further define 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. tout ensemble measures of liquidity showed improvements for Hershey between 2007 and 2008. This is largely due to Hersheys ability to generate a greate r 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 moving product out the door for sales. Activity measures focus on these actions and evaluate how a firm uses its assets to generate revenues. If a company is able to utilize its assets efficiently, fewer funds from financing are needed. The ratios analyze in this section are inventory employee 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 number 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 th e 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 slightly 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. Companies that have a high leverage can have difficulty paying back debts, securing new debts from creditors, and are usually higher risk. But, these companies can also attain tax advantages and gain large returns from investing. The ratios analyze d in this section include the debt ratio, debt to equity ratio and imes post earned ratio. Debt Ratio The debt ratio indicates how much debt a company has recounting 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 intend the risk level of a company. A lower number is favored because it shows the company has a large 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 investment 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 liabi lities 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 times interest earned ratio gives shows how well a company is able to pay its interest expenses with loot before taxes. The number represents how many times 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 ratio 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. SPACE 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 Conservative 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 variabili ty-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 transmitter 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 integrating market penetration market development and product evelopment. H. Grand Strategy 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 America. I. Boston Consulting Group (BCG) Matrix BCG is a private management consult ing 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 tangible investment especially in global market and to strengthen its dominant position. Strategies that is best for Hershey includes market penetration, market development, product development, and forward, backward and horizontal integration. J.The Internal-External (IE) Matrix The IFE Total charge 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 3 EFE = 3. 27 EFE = 3. 27 3. 0 to 3. 99 Medium IV V VI The EFE Total Weighted Score 2. 0 to 2. 99 Low VII VIII IX 1. 0 to 1. 99 signalize 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 construction of the corporate-level IE Matrix. The result from IE Matrix states that Hershey Company is appropriate for division 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 interpretation, suggest two best alternatives that the company could pursuit, then perform QSPM matrix. K. QSPM Strategic Alternatives make out Internal Factors Weight Alternative 1 Global Expansion Alternative 2 recrudesce Organic Products Strengths AS TAS AS T AS 1. Distribute 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 Margin 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. 08 - - - - 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. Ca dbury 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 develop 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 maker 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 anatomical 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 experience of the particular continents and they will work according to market conditions. The Hershey Company needs to go international advertisement to promote the product as well as they have to find out the new channels of distribution and adopt th e new channels to increase the sales. For the cost of expand to global market, the company must spend more in terms of marketing that amount is indicated in the projected income statement. ) Continue chocolate partnership with coffee 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 become much more aware of the various 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 t o gain a greater market share. If Hershey continues to market the products they already have in categories and continues to develop new products that channelise 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 82,875 83,433 90,080 impairment 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 96,434 111,07 0 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 proportionality 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 Short 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 opinion 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 benefits of drear chocolate.These benefits are from flavonoids , which act as antioxidants. Moreover, the other benefit that we are able to gain from chocolate such as Lower Blood Pressure, Lower Cholesterol, endorphin production and so on. All ah orders us to consume good topic and try to avoid the meal that it will damage our bodies. As Allah verbalise Messengers eat of the good things and do good surely i know what you do Chapter 23 , Verse 51 eat of the logical 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 state in Quran. He has only forbidden you what dies of itself and blood and flesh of swine and that over which any other divulge than that of Allah has been invoked, but whoever is driven to necessity, not desiring nor exceeding the limit, then surely Allah is forgiving, merciful Chapter 16 , Verse one hundred fifteen Hershey also has policy to maintain and concern about environment. It was one of the companies who are in Worl d burnt umber Foundation which support environmental project. This project includes non-chemical pest management practice and encourage sustainable terra firma practice to support ecosystem in the region.Allah does not love 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 disturbing the natural balance of the universe. Man interferes advisedly 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(a) 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 a re marked by a disturbance to the earths natural balance. If companies or industries exploit or use up natural materials and environment, all damage will run off 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/subject/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