To invest about 10 million us dollars in west africa

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to invest about 10 million US dollars in West Africa to improve cocoa cultivation, community health and reduce the worst form of child labor in Côte d’Ivoire, Ghana and Nigeria ( Hershey, 2012). Another way to strengthen its status is backward integration, where Hershey will buy one or more suppliers to make sure that Hershey is able to control prices of goods. Rivalry among existing competitors: Confectionery is a competitive industry. The global candy industry has five main competitors: Nestle, Mars & Wrigley, Cadbury, Hershey and Ferrero Rocher . The global market share is about 42%. All the main players in the industry have very perfect brands all over the world. The growth rate of the developed countries is 5%, and the emerging market is 10%, which makes the candy industry attractive. Due to fierce competition, price competition may lead to lower profit margins. Threat of alternative products: World Health Organization (2008) estimated that at least 400 million adults were overweight in 2005, and predicted that this number will reach 700 million in 2015. The United States, Britain and Germany
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are facing the largest number of obesity, overweight and cardiovascular health problems. On the other hand, these countries are the largest candy market in the world. Customers are becoming more and more aware of healthy eating, so snacks are changing. A large number of alternatives, such as energy bars and fruit bars, pose a threat to the chocolate industry, especially for healthy parents who choose healthier choices. Chocolate tries to increase the value of chocolate by adding vitamins or removing fat and sugar from sweets. Recommendation Confectioners's new entrants are willing to reduce the pricing strategy, reduce costs, provide new values for customers, bring innovation, new mode of doing things and put pressure on Hershey. Hershey company must address all these problems and build effective barriers to protect Hershey’s competitive advantages. The recommendation will base on Porter’s Five Forces. How does Hershey deal with the threat of new entrants? Hershey needs to start the innovation of new products and services. New products not just bring new consumers, and also let existing customers have reason to purchase Hershey Co products. Hershey needs to reduce the fixed cost per unit by establishing scale economy. Improve R&D capacity and invest money. New entrants are unlikely to enter a vibrant industry, such as Hershey’s old business, regularly defining standards.This greatly reduces the extraordinary profit margins of the new company, thus hindering the new participants in the industry. How does Hershey tackle the bargaining power of suppliers?
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  • One '14
  • Management, bargaining power, The Hershey Company, COCOBOD Ghana cocoa

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