a. Financial Ratio AnalysisRatio200820072006

Liquidity Ratios

Current Ratio

Quick Ratio

Leverage Ratios

Debt-to-Total-Assets Ratio

8604

Debt-to-Equity Ratio

Long-Term Debt-to-Equity Ratio

Times-Interest-Earned Ratio

Activity Ratios

Inventory Turnover

-

Fixed Assets Turnover

Total Assets Turnover

Account Receivable Turnover

= 8.57-

Average Collection Period

Profitability Ratios

Gross Profit Margin

Operating Profit Margin

Net Profit Margin

Return on Total Assets

-

Return on Stockholders Equity

Earnings Per Share

1.360.932.34

The financial analysis for Hershey will be provided giving by liquidity ratios, leverage ratios, activity ratios, and profitability ratios.All liquidity measures showed an increase for Hershey between 2007 and 2008. This is largely due to its ability to generate Hershey larger amount of operating cash flow in both years, as seen in the adequacy of cash flows. The increase in current ratio and quick ratio indicates a better ability to pay short-term debt with current assets, which also suggests that future payments of long-term debt will possible. The average collection period shows the same situation. Initially Hershey itself has enough liquidity to meet its obligation during operation such as the ability to pay up credit suppliers, current taxation or other current liabilities or dividends.While, the entire leverage ratio for Hershey improved during the period under review with an exception. This indicates that the risk Hershey has decreased overall. Several reasons exist for this decreased risk. Shareholders' equity increase and interest expense decrease. There is improvement was seen in Hersheys activity ratios over the evaluation period. Declined was seen in the accounts receivable, which also affected the average collection period ratio. Improvements were seen in inventory and asset turnover ratios. Hershey assets decreased in value then revenues increased resulting in a more efficient use of assets.Moreover, improvement was observed from Return on Asset (ROA), sales margin, and Return on Equity (ROE) of Hershey. Revenues and costs goods sold increased proportionally, thus not affect the profitability measures. This increase can be attributed to a decrease selling, marketing and administrative costs, and a decline in business restructuring and cost of assets between 2007 and 2008.Finally, all financial measures show improvements in many areas between 2007 and 2008. Their overall profitability improved due to lower expenses, particularly selling, marketing and administrative costs (SM&A) and business restructuring costs. Liquidity has also improved in all areas where can be attributed to their ability to generate a greater amount of operating cash flow. Due to increase their liquidity, Hershey shows that they are in a better position to pay their debts and are able to distribute their income to shareholder easier.

b. Organizational Chart

As we can know that Hershey Company does not make public an organizational chart. The organizational chart above created based on the executive titles. According to the Hershey Company Annual Report 2013, they operate under a matrix structure that designed to ensure continued focus on North America and on continuing to transform into a more global company. Hershey is operating by geographic regions which are accountable for reporting purposes. The matrix structure groups employees in the fields of function and product which focused around individual products or product lines.This type of structure is the most complex compared to others. This is costly because it creates more management positions and requires excellent vertical and horizontal flows of communication. It requires also mutual trust and confidence. Other disadvantages include that dual lines of budget authority, dual sources of rewards and punishment, and shared authority reporting. Despite its complexity, employees can clearly see their work result, and easily accomplished to shut down a project. Functional resources are shared instead of duplicated as in a divisional structure and the facilities uses of special equipment are the advantages of this structure. Those with a high degree of expertise can divide their time as needed among the projects, and in turn to develop their own skills and capabilities more than in other structures. U.S. businesses frequently used this structure.

c. Recommended Organizational ChartNow, we are suggesting the new organization structure to Hershey Company. The above organizational chart is recommended to use divisional structure by geographic area. In this structure, we have suggested continental president by regional, which can help to widespread globally or to increase the market share globally because they will have the experience of the particular continents and they will work according to different market conditions. This creates career development chances which allows local control of situations, leads to competitive climate internally, and easily to add new businesses and products. On the other hand, the accountability is clear which the divisional managers can be held responsible for sales and profit levels. This structure is more suitable for the larger organization that they can simpler to manage and gives clearer lines of control.

d. Market Positioning Map with Firm and CompetitorsPrice (High)

CadburyMarsNestle Hershey Company

Brand LoyaltyBrand Loyalty (Low)(High)

Price (Low)Diagram: Market Positioning Map

Nestle, Cadbury, and Mars are the main competitors of Hershey. They compete with each other for the top spot. With its strong resource of Hershey, they have the ability to still provide competition to Mars and Nestle although Mars and Nestle have many more products lines and markets. Hershey has to investigate the local competitors in different countries and adjust their marketing strategies. Nestle, Mars and Cadbury brand products prices unchanged for geographical reasons. Additionally, their products competitors have less diabetes products than Hershey's. The strategy is to increase sales potential through promotion programs planned throughout the year. Next, repackage it so it looks new Hershey will appeal to consumers, as it will be marked as low calorie. This Hershey offers unique products and services for different types of customers. By offering a variety of different products and services, this Hershey will be able to achieve a competitive advantage. Hershey has developed strong brand recognition and loyalty. To do this Hershey need to find the right balance of quality and price for each market they enter.e. Marketing StrategyHershey principle of marketing strategy is strong brand equities, product innovation, consistently superior product qualities, expertise manufacture and distribution of mass. Hershey is also a great source deliver to identification, development, test, manufacture and marketing of new products. They have various promotional programs for customers and advertising programs and promotions for the product users. Hershey use sales promotion programs to stimulate certain products at various times throughout the year. Hershey is well-known brand in chocolate industry. They provide many good quality products to customers and there is a consistency of quality product supplied. Besides that, the package and design of their products is simple but interesting, such as the chocolate can be wrapped in many different sizes and made easy for customers to split. Even though the package is small, all the useful ingredients information is provided to customers to control nutritional intake.On the basis of place, Hershey's the first plant outside Hershey in Pennsylvania opened on June 15, 1963 For the competitors such as Cadbury produces chocolate more than 200 countries so that they have a chance to enjoy it as well and make a profit. Next is Mars Inc. which is very popular at the global level. It has factories in 68 countries worldwide. Furthermore, Nestle when entering new markets will not be alone, but it looks for friends and mergers. Hershey distributes their products worldwide to make it convenient and available for consumer to buy.On the basis of price, Hershey pricing strategy is to perpetuate the price stage at consistently high levels. For competitors, Cadbury price is an important element in the marketing mix. Besides that, Mars chocolate products have been marketed as a big market, targeting childhood, teens and adults who work. In addition, Nestle again decided on the basis of price competition. The best think about reputable Nestle was that he was very flexible and it can come with a price that is very fast.The main competitors are Mars and Nestle. Mars is a threat to Hershey, because Mars has a stronger presence than Hershey. Hershey needs to pay special attention to the marketing of products in this area. Not like Hershey, Mars has historically reliable marketing and advertising expenses wide to gain market share rather than on product innovation. Taking a lesson from this, Hershey also needs to increase the advertising budget. There is another opportunity for Hershey to develop products and environmentally safe package, reducing industrial waste, recycling, and create environmental audit process strategies that could benefit Hershey.f. Map Locating

Value Chain Analysis ChartSome major changes have been down in the Hershey to maximize value chain and drive customer sales. Overhaul in several different areas can take credit for converting the raw materials into a delicious candy for customers to enjoy. The areas to be addressed are the production, marketing, information systems, and also research and development.For the production, a major restructuring designed to cut costs and excess production capacity. Money saved in the cost of production will be cut partially into marketing where market competition has impacted significantly Hershey business and as a result, have been required to increase expenditures for advertising and promotion and to continue to develop and create new products. On an information system, the Hershey Company has implemented a three-year plan for the development and implementation of global supply chain technology revolutionary. Transforming the supply chain will use some of the data collection and the reorganization core that will make the global supply chain network in a more efficient and flexible. Finally, research and development, the Hershey has a strong tradition of creating quality products and successfully pursues these products into new lines and new ventures. Hershey's goal is to redefine the future of snacking by offering consumers products that provide proven health benefits and superior taste they expect from Hershey. The companies said they would cooperate in various research and development activities with a focus on driving innovation in new chocolate taste experiences, health and wellness, ingredient research and optimization.

g. Firms website and Facebook page in terms of good and bad points compared to rival firmsThe firms website and Facebook page is important to the company which represents the image of the company and population among the industry. Website and Facebook page probably used as advertising and promoting their businesses to the world. The Internet has allowed businesses to break through the geographical barriers and become accessible and virtually from any country in the world by potential consumers who have Internet access.Hersheys website is more attractive of its rivals website which compared to Nestle, Cadbury, and Mars. The website of Nestle and Mars is unattractive and boring, while there is competitive with Cadbury. Hershey and Cadbury website is obviously telling consumer that what products and services they provide. Besides, website and Facebook page serves a great place for customers can be easily and quickly give any feedback about companys products and services, and also a great place for company to give feedbacks efficiently.Their website and Facebook page have the way for consumers to interact. The interactivity keeps people on the webpage longer and also encourages people to come back to the site multiple times as they look to see if there is anyone responded the feedback. Cadburys Facebook should have new content added to it regularly, ideally multiple times a week at least like Hershey, Nestle, and Mars did to improve consumers freshness. Hershey, Nestle, and Mars make their business come alive on Facebook and make customer find interesting and inspiring. Furthermore, Hersheys website and Facebook page is more reliable because they do update the information on a regular basis to ensure that they are providing the accurate and new information of its competitors. Hersheys credibility is improved because Hershey gives the opportunity to tell the potential customers what they are about, so they deserve customers trust and confidence.

h. Value of the Firm Analysisi. List up to 20 of the firms strengths and weaknessesNo.StrengthsWeaknesses

1Iconic brand recognitionComplex organization structure

2Positive consumer good willHedged futures contracts necessary

3Strategic acquisitions and joint venturesDiversity among suppliers and shippers

4Creativity in research and developmentLower manufacturing costs

5Employee empowermentIncrease in healthy snacks subdivisions

6Diversified productsHigh debt to equity ratio

7Increased inventory turnoverIncreased long term debt

8Good quality recipes

9

10

j. Internal Factor Evaluation (IFE) MatrixKey Internal FactorsWeightRatingWeighted Score

Strengths

1. Brand recognition0.1540.60

2. Consumer good will0.1030.30

3. Strategic acquisitions and joint ventures0.0730.21

4. Research and development0.0830.24

5. Employee empowerment0.0420.08

6. Diversified products0.0640.24

7. Increased inventory turnover0.0530.15

Weaknesses

1. Complex organization structure0.1020.20

2. Hedged futures contracts necessary0.0520.10

3. Diversity among suppliers and shippers0.0820.16

4. Lower manufacturing costs0.0810.08

5. Increase in healthy snacks subdivisions0.0420.08

6. High debt to equity ratio0.0720.14

7. Increased long term debt0.0320.06

Total1.002.64

The weight ranges from 0.0 (not important) to 1.0 (all-important). The rating to each factor represents rating = 1 as a major weakness, rating = 2 as a minor weakness, rating = 3 as a minor strength and rating = 4 as a major strength. Overall, this company receives a 2.64 total weighted score which on a 1 to 4 scale is exactly average or halfway that above 2.50. It is indicating that Hershey has a strong internal position. Hershey is also appropriate to maintain profits, increase sales and expand globally. They sell the majority of their products in body mass merchants and supermarkets.