BUSI 400 Week 8 Group Case Analysis 2 Example

Funding, Marketing and Measuring the Plan: Hershey's Strategy From Implementation to Review

Marketing: Segments and Positioning

The expansion targets two segments: households that buy salty snacks weekly and value familiar brands, and health-conscious adults looking for lower-sugar or better-for-you options. David and David (2017) describe positioning as defining how a product should be seen relative to competitors. The group's positioning statement: for snackers who want a treat they feel good about, Hershey's snacks combine trusted flavors with simple ingredients, backed by a brand families have known for generations. The marketing mix follows from that position. Products include familiar salty snacks alongside new items that borrow Reese's and Hershey's flavors in lower-cocoa forms. Pricing should sit slightly above store brands but below specialty natural brands, reflecting trusted quality without a premium that discourages trial. Distribution builds on Hershey's existing retailer relationships, especially convenience stores and checkout lanes, where the company is already strong. Promotion should lean on the brands' familiarity rather than on deep discounts, which build volume but erode the margins the strategy is meant to restore.

Finance: Funding a Related Acquisition

Debt financing raises earnings per share when the acquisition earns more than its interest cost, but Hershey's liabilities already rose relative to equity after 2025's lower earnings (The Hershey Company, 2026). The group recommends a mix: modest new debt combined with cash flow, and no acquisition until margins recover enough to protect the company's credit standing. The table's figures are illustrative assumptions, not forecasts, but they show the essential choice chapter 8 describes: debt magnifies the gain if the acquisition performs and magnifies the strain if it does not, while new shares spread both gain and risk across more owners.

Research and Information Systems

Product research should focus on recipes that cut cocoa content without losing taste, and information systems should connect retail sales data with production planning so that new snack items are stocked where they sell. Shared data across the chocolate and snack businesses would also let marketing see which customers buy both, which is the group of households the flavor-crossover products are meant to reach.

Strategy Evaluation: Balanced Scorecard

Kaplan and Norton (1992) introduced the balanced scorecard to judge strategy through financial, customer, internal process and learning measures rather than profit alone.

A strategy that is never measured is only a hope with a budget. The board should review the scorecard every quarter and conduct a full strategy review annually, asking whether the underlying assumptions about cocoa costs and snack demand still hold. David and David (2017) describe strategy evaluation as three activities: reviewing the bases of the strategy, measuring performance against targets and taking corrective action. If cocoa prices fall sharply, for example, the case for diverting capital from chocolate weakens and the plan should be adjusted rather than followed mechanically.

Global Issues

Even a North American strategy has global exposure: cocoa comes from West Africa, packaging and equipment cross borders, and tariff changes can raise costs quickly. If international expansion is revisited later, Hershey should enter markets where its brands are known, through partners, before investing in its own plants.

References

David, F. R., & David, F. R. (2017). Strategic management: A competitive advantage approach, concepts and cases (16th ed.). Pearson.

Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard: Measures that drive performance. Harvard Business Review, 70(1), 71-79.

The Hershey Company. (2026). Annual report on Form 10-K for the fiscal year ended December 31, 2025. U.S. Securities and Exchange Commission. https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000047111&type=10-K