Hershey: Going through a Sweet Recession

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Case Details:

Case Code : MKTG222
Case Length : 17 Pages
Period : 2000-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : The Hershey Company
Industry : Chocolate and Confectionary
Countries : US, Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

In 1887, after completing his apprenticeship with a confectioner, Milton S. Hershey (Milton) founded the Lancaster Caramel Company (Lancaster) to manufacture caramel candy. In 1895, Lancaster began manufacturing and selling milk chocolate...

The Changing Chocolate Market and Hershey's New Products

From 2000 onward, the sales of Hershey Corp's products had been flat (See Exhibit III for information about the sales and net income of Hershey's, 2001-2007). Analysts observed that the sales of milk chocolates in the US had been stagnant for some time, and attributed this trend to several factors...

Restructuring of Operations and Making International Forays

In February 2007, Lenny implemented a restructuring initiative. The three-year restructuring exercise was anticipated to cost US$ 550-575 million in pre-tax charges and non-recurring project implementation costs. However, it was expected to streamline the company's operations and result in annual savings of US$ 170-190 million by 2010...

The Marketing Initiative

Speaking about Hershey's future focus, West said, "Our primary goal in 2008 is to stabilize U.S. business marketplace performance. Markedly higher brand-building support, including advertising, quality merchandising, enhanced retail coverage, and new chocolate products within the premium and trade-up segments will enable us to achieve this goal."...

 Excerpts Contd...>>


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