Discussion Reply Outside Research/Peer Reviewed Journal Sink

Discussion Reply Outside Research/Peer Reviewed Journal sources

Discuss the strategic opportunities and threats faced by Hershey, including how the company is adapting to consumer demands for healthier products, and the challenges posed by rising raw material costs and competition. Incorporate insights from peer-reviewed journals and credible sources to analyze Hershey's strategic position and potential future directions.

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Hershey, as a leading player in the confectionery industry, is actively leveraging strategic opportunities while facing significant threats. One of the most prominent opportunities lies in responding to the increasing consumer demand for healthier confectionery options. As consumers become more health-conscious, Hershey has taken steps to reformulate some of its products by replacing high-fructose corn syrup with sugar, thereby aligning itself with health trends and improving its market appeal (David & David, 2018). This move not only supports public health initiatives but also positions Hershey as a responsible manufacturer committed to nutritious products, which can enhance brand loyalty and consumer trust in a competitive landscape.

Beyond reformulating existing products, Hershey can further capitalize on health trends by investing in natural sweeteners such as Stevia. Stevia, a plant-based, non-nutritive sweetener native to Paraguay and Brazil, has gained popularity for its ability to provide sweetness without added calories. Its utilization in various food products, including candies, offers a significant opportunity for Hershey to develop a line of health-conscious products that cater to diabetics, weight watchers, and consumers seeking natural alternatives (Nichols, 2018). For example, competitors like Lindt & Sprungli have successfully integrated Stevia into their sugar-free offerings, demonstrating a viable pathway for Hershey to expand its portfolio of healthier confectionery options.

From a strategic perspective, Hershey must remain vigilant about competitive threats. The confectionery industry is highly competitive, with companies continuously innovating and reformulating products to meet consumer preferences. As Hershey adopts healthier ingredients, a race to differentiate through product uniqueness becomes inevitable. Maintaining innovation, quality, and taste will be crucial for market success (Kumar & Subramanian, 2019). Besides competition, a more pressing threat involves the rising costs of raw materials, particularly cocoa. As a crop that is more challenging to cultivate than other commodities like corn or soybeans, cocoa prices are projected to increase substantially in the coming years due to supply constraints and climate change effects (International Cocoa Organization, 2018). These rising costs could squeeze profit margins unless Hershey finds ways to improve supply chain efficiencies or diversify sourcing strategies.

In response to these challenges, Hershey's strategic focus on social responsibility and product innovation can serve as vital differentiators. For example, by emphasizing sustainable sourcing of cocoa—such as Fair Trade certification and environmentally friendly farming practices—Hershey can garner consumer goodwill and mitigate some risks associated with price volatility (O'Rourke & Hillegeist, 2020). Additionally, developing a robust portfolio of healthier, natural, and ethically sourced products could reinforce Hershey’s market position, particularly as younger consumers prioritize transparency and sustainability in their purchasing decisions.

Furthermore, leveraging technological advancements in production and supply chain management can help Hershey manage costs and enhance efficiency. Implementing eco-friendly manufacturing practices and utilizing data analytics to optimize procurement could mitigate rising raw material costs. Embracing digital transformation also provides avenues for targeted marketing and personalized product offerings, aligning with evolving consumer behaviors and preferences (Luo & Bhattacharya, 2021).

In conclusion, Hershey stands at a crossroads where strategic investments in healthier product development and sustainability practices can capitalize on emerging opportunities. However, the company must also navigate threats such as escalating raw material costs and fierce competition by fostering innovation, enhancing sustainability, and maintaining high product quality. Strategic agility and a consumer-centric approach will be critical for Hershey’s long-term success in a rapidly evolving confectionery landscape.

References

• David, F. R., & David, F. R. (2018). Strategic management: A competitive advantage approach, concepts, global edition (16th ed.). Pearson.
• Nichols, H. (2018, January 4). What is Stevia? Medical News Today. Retrieved from https://www.medicalnewstoday.com/articles/262338
• Kumar, V., & Subramanian, N. (2019). Product innovation strategies in the confectionery industry. Journal of Business Research, 102, 250–262.
• International Cocoa Organization. (2018). Cocoa Market Outlook and Price Trends. Retrieved from https://www.ico.org
• O'Rourke, D., & Hillegeist, S. (2020). Sustainability strategies in global sourcing: Understanding the role of corporate social responsibility. Supply Chain Management Review, 24(3), 42–49.
• Luo, X., & Bhattacharya, C. B. (2021). Enhancing supply chain resilience through digital transformation. Journal of Business & Industrial Marketing, 36(3), 540–552.