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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"Hershey is paying the price for years of under-spending behind its brands and sales infrastructure as well as not adequately adjusting its product portfolio to changing consumer trends in the domestic confectionery market." 1

- Mitchell Corwin, Analyst at UK-based investment research firm Morningstar Inc., in 2007.

"Hershey's strong fourth quarter results represent a solid end to the year and further validate our strategy of focusing investment on core brands. Core brand strength was attributable to increased advertising and retail effectiveness."2

- David J. West, President and Chief Executive Officer, The Hershey Company in 2009.

Introduction

In March 2009, in a move to diversify its international operations and gain a greater presence in Asia, The Hershey Company (Hershey) acquired Barry Callebaut AG3's Van Houten consumer chocolate business in Asia. As part of the deal, Hershey gained exclusive license for the Van Houten brand name and related trademarks in Asia Pacific, the Middle East, Australia, and New Zealand for consumer products.

Hershey, started in the late 1800s, is a leading chocolate and confectionary manufacturing company in the US.

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1] Stephen Foley, "Bitter Days in Chocolatetown," www.independent.co.uk, November 13, 2007.
2] "Hershey Announces Fourth Quarter and Full-Year 2008 Results; Reaffirms Outlook for 2009," www.thehersheycompany.com, January 27, 2009.
3] Barry Callebaut was formed after the merger of Belgian company Callebaut and the French company Cacao Barry in 1996. It is the world's leading manufacturer of high-quality cocoa and chocolate – from the cocoa bean to the finished product on the store shelf.


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