Question

In: Economics

In trying to combat declining sales between 2000 and 2010, Hershey made multiple attempts to boost...

In trying to combat declining sales between 2000 and 2010, Hershey made multiple attempts to boost their business facing tougher competition and consumer behavior shifts. What were the right moves that they made, and why? If not, what would you have proposed?

Solutions

Expert Solution

Hershey as a candy came into existence in 1909 by Milton Hershey and his wife. Slowly Hershey's bars and twizzers, candies gain popularity and growth for many years. It holds strong market share because of proper supply Chain management production and distribution. But after some time, the company faces many problems and was not able to sustain growth by using older steps. The main issue were:

1.the concept of small stores was not in existence. It leads to emergence of the concept of retail chains. It gave rise to many competitors

2.various flavours provided by Hershey's was not liked by consumers

3.They gave stress on packaging whereas focus was now given on brands.

The problem was that Hershey made all the products like candies, twizzers etc. and they wait for the demand and products were made available in the market. But when the situation changed, all the products were not sold and even retailers were not ready to keep huge inventory.  

So there was need to change the marketing concept on the basis of demand based supply. When the market was surveyed, it was found that market was filled with variety of similar products and consumers were not just impressed by good packaging. So its supply chain was also costlier. So there was need to change the strategy from supply driven to demand based production.It was found that consumers loved candies and were ready to pay more for this. So all the members of the organisation was involved to change the strategy in order to beat the competitors. Thus instead of producing different varieties , they go for exploring munchers. Finally it was found in 2010 meeting that the cash flow was double in 2009 from that of 2008 which was 1.066 billion dollar.


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