Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The chart only has five columns and the information i need for chart in listed below. Division Revenues Profits Relative market share position Industry growth

The chart only has five columns and the information i need for chart in listed below.

Division Revenues Profits Relative market share position Industry growth rate
  1. Complete the chart.
  2. Summarize the information you put in each column of the matrix.
  3. Provide recommendations on how the Hershey Company can improve current operations.

If is it possible to have reference would be very helpful to get more information on company. Strategy Hershey has recently embarked on a multiyear joint venture with 3D Systems, makers of 3-D printing technology, to start producing new confectionary products using this technology. 3D Systems currently produces two 3-D printers capable of making chocolate. The firms ChefJet is priced around $5,000 and prints single-colored candy much like a plain Hershey candy bar. The ChefJet Pro, priced at around $10,000, can produce multicolored candies. Both printers are capable of printing complex candy designs at a rate of one inch per hour and sizes up to 8 inches by 10 inches by 14 inches. Some analysts, however, do not believe 3-D printing is an option for confectionaries until 2020 due to slow production and high cost factors. The technology will be affordable enough to produce specialized candies for Valentines Day and other holidays around that time but still not affordable enough for mainstream production. Recently, Hershey purchased Brookside-branded candy, famous for its dark-chocolatecovered candies with fruit-juice centers such as pomegranate and blueberry. Hershey purchased Shanghai Golden Monkey Food in 2014. In that year, Hershey began distribution of acquired confectionery and protein-based bean curd snacks into the China modern trade. For all of 2014, Hersheys chocolate sales in various countries grew, including China (12% vs. 7% prior year), Mexico (2% vs. 7% prior year), and Brazil (1% vs. 5% prior year). With the KRAVE acquisition in 2015, and with the companys vision statement, Hersheys strategy is to broaden its product line more by adding healthful snacks to complement its numerous types of chocolate and nonchocolate candies. Since protein snacks are growing rapidly in popularity globally, the KRAVE acquisition may be the first of many for Hershey in that line of business. The acquisition represents one of the first times Hershey has taken a big step outside confectionery. Hersheys 2014 international net sales increased nearly 15 percent, including a net sales contribution of approximately 7 percent, or $54 million, from Shanghai Golden Monkey Food Joint Stock Co., Ltd. (SGM). Excluding SGM and the unfavorable foreign currency exchange impact, Hersheys international net sales increased approximately 10 percent in 2014. Segments Hersheys primary operations and markets are in the United States. The percentage of total Hershey net sales outside of the U.S. was 17.5 percent for 2014, 16.6 percent for 2013, and 16.2 percent for 2012. The percentage of total consolidated assets outside of the U.S. was 35.4 percent as of December 31, 2014, and 19.4 percent as of December 31, 2013. Although Hershey does not report sales and income by product category, the company keeps internal records by three product segments: Chocolate, Sweets and Refreshments, and Snacks and Adjacencies. The Chocolate category consists of fancier options such as acquired Cadbury, traditional products such as Mr. Goodbar and Hersheys Kisses, and Dagoba organic chocolates. Twizzlers, Jolly Rancher, PayDay, and others are included under the Confectionary Products umbrella. Breath Savors, Bubble Yum, and Icebreakers fall under Sweets and Refreshments, and Hersheys baking chocolates and syrups are included under Snacks and Adjacencies. Hershey also offers a full line of sugar-free products. Many Hershey products are naturally gluten free and kosher in nature. Hersheys sales and income by geographic region are given in Exhibit 2. North America accounted for 85.6, 86.8, and 87.5 percent of the companys sales in 2014, 2013, and 2012, respectively. Note in Exhibit 2 that Hersheys income from outside North America has declined steadily. All sales and income from Hershey stores are included in the International and Other segment. Exhibit 2 Hersheys Net Sales and Income (in millions)

2014 2013 2014
Sales
North America $6,352.7 $6,200.1 $5,812.7
International and Other 1,069.1 946.0 831.6
Total 7,421.8 7,146.1 6,644.3
Income
North America 1,916.2 1,862.6 1,656.1
International and Other 40.0 44.6 51.4
Total $1,956.2 $1,907.2 $1,707.5

Exhibit 3 Hersheys Income Statements (in thousands, except per share amounts)

2014 2013 2012
Sales $7,421,768 $7,146,079 $6,644,252
Costs and expenses
Cost of sales 4,085,602 3,865,231 3,784,370
Selling, marketing, and administrative 1,900,970 1,922,508 1,703,796
Business realignment and impairment 45,621 18,665 44,938
Total costs and expenses 6,032,193 5,806,404 5,533,104
Income before interest and taxes 1,389,575 1,339,675 1,111,148
Interest expense 83,532 88,356 95,569
Income before taxes 1,306,043 1,251,319 1,015,579
Income taxes 459,131 430,849 354,648
Net Income 846,912 820,470 660,931
Net income per share 3.91 3.76 3.01
Dividends paid per share 2.04 1.81 1.56

Exhibit 4 Hersheys Balance Sheets (in thousands)

2014 2013
Assets
Cash and Cash Equivalents $ 374,854 $ 1,118,508
Short-Term Investments 97,131
Accounts ReceivableTrade (Net) 596,940 477,912
Inventories 801,036 659,541
Deferred Income Taxes 100,515 52,511
Prepaid Expenses and Other 276,571 178,862
Total Current Assets 2,247,047 2,487,334
Net Property, Plant, and Equipment 2,151,901 1,805,345
Goodwill 792,955 576,561
Other Intangibles 294,841 195,244
Other Assets 142,772 293,004
Total Assets $ 5,629,516 $ 5,357,488
Liabilities and Stockholders Equity
Short-Term Borrowings $ 635,501 $ 166,875
Accounts Payable 482,017 461,514
Accrued Liabilities 813,513 699,722
Accrued Income Taxes 4,616 79,911
Total Current Liabilities 1,935,647 1,408,022
Long-Term Debt 1,548,963 1,795,142
Other Long-Term Liabilities 526,003 434,068
Deferred Income Taxes 99,373 104,204
Total Liabilities $ 4,109,986 $ 3,741,436
Stockholders Equity
Preferred stock shares issued: none in 2014 and 2013
Common stock, shares issued: 299,281,967 in 2014 and 299,281,527 in 2013
Class B common stock, shares issued: 60,619,777 in 2014 and 60,620,527 in 2013
Additional paid-in capital 754,186 664,944
Retained earnings 5,860,784 5,454,286
Treasury stock: 138,856,786 in 2014 and 136,007,023 in 2013 (5,161,236) (4,707,730)
Accumulated other comprehensive loss (358,573) (166,567)
Stockholders equity 1,455,062 1,604,834
Noncontrolling interests in subsidiaries 64,468 11,218
Total stockholders equity 1,519,530 1,616,052
Total liabilities and stockholders equity $ 5,629,516

$ 5,357,488

Exhibit 5 Hershey versus Rival Firms, Market Share (percent)

Product Type Hershey Mars Nestle Others
USA Chocolate 37 28 5 *30
USA Nonchocolate Candy 21 35 2 42
Global Chocolate and Nonchocolate Candy (non-USA) 5 14 9 **72

Exhibit 6 Hershey versus Rival Firms

Hershey Nestl Tootsie Roll Industry Avg.
# Employees 20,800 333,000 2,000 1,730
$ Revenue 7.5B 105.47B 541M 3.79B
$ Revenue per Employee 360,575 316,000 270,500 219,000
$ Net Income 840M 11.15B 62.6M 3B
$ Market Capitalization 20.7B 242B 2.08B 675M
% Operating Margin 0.19 0.15 0.15 0.05
Earnings per Share 3.76 3.49 1.03 0.11

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

5th Edition

1264467206, 978-1264467204

More Books

Students also viewed these Accounting questions

Question

isolation forest technique's examples

Answered: 1 week ago