Ife matrix for hershey company

Find at least two students whose conclusions bring new levels of understanding to your view on Hershey’s external responsiveness or conclusions where you might disagree. Post a response to two students including an explanation of the value of their contribution to your understanding or where you would “respectfully” disagree

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An EFE or external factor evaluation matrix allows strategist to summarize and evaluate several factors externally of an organization to get a better understanding of the current condition of the business (David, F & David, 2017). The CPM or Competitive Profile Matrix “identifies the major competitors and its strengths and weaknesses in relation to the current firm’s strategic position” (David & David, 2017, p. 78). These matrices are useful for a company to quickly evaluate its business structure.

EFE- External Factor Evaluation

Opportunities

Weight

Rating

Score

Replacing high fructose corn syrup w/ sugar

.14

3

.42

Potential expansion into other countries

.16

2

.32

Introduction of new produces annually

.06

2

.12

Acquiring KRAVE-healthy eating company

.16

4

.64

Threats

Substitutes/decreasing cocoa proportions

.18

4

.72

Increase tax on sugary products

.12

3

.36

Increase prices

.12

3

.36

Competitors strategies

.06

2

.12

Total

1.00

3.06

Hershey Nestle Mars

Success Factors

Weight

Rating

Score

Rating

Score

Rating

Score

Product Quality

.25

4

1.00

3

.75

4

1.00

Management

.15

3

.45

3

.45

3

.45

Global Expansion

.20

3

.60

3

.60

4

.80

Market Share

.25

4

1.00

2

.50

3

.75

Healthy Versions

.15

3

.45

4

.60

2

.30

Total

1.00

3.50

2.90

2.30

For simplicity of the discussion, I only utilize four factors for the external factor evaluations and only five for the Competitive Profile Matrix. According to our text we should utilize at least twenty external factors and several factors for a comprehensive competitor profile matrix. For its competitor to be 10x bigger and have less market share puts Hershey in a great position to expand in other countries and increase its market share and financial position. However, if the decision is to expand, the one thing they will need to focus on is in how they are going to obtain more land to grow cocoa trees as NOT utilize substitutes in its products. It presently has good product quality and utilizing substitutes could potentially taint the image of the company. Reducing portion sizes would not be too much of an issue once expanding in to a new country. Hershey is in a good position in respect with it's competitors with potential for much growth.

References

David, F., & David, F. (2017). Strategic Management: Concepts and Cases (16th edition). Pearson Education, Inc

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Competitive Profile Matrix

Hershey

Mars

Nestle

Key Success Factors

Weight

Rating

W/S

Rating

W/S

Rating

W/S

Product Quality

0.20

6

1.20

5

1

4

0.80

Global Presence

0.20

5

1

3

0.60

4

0.80

Financial Position

0.20

8

1.60

8

1.60

7

1.40

Distribution Network

0.20

8

1.160

6

1.20

5

1

Customer Service

0.20

5

1

5

1

5

1

Totals

1.0

6.40

2.20

5.00

The Hershey company is leading in every asset of the five categories above on the Competitive Profile Matrix. With Hershey being largest producer of chocolate in North America and operate in around 80 countries around the world, they are attempting to corner the market on new technology with trying to get the machinery that will help speed up the process of making the candy into actual bars. The bars are being process on an assembly line, but the company want a computer to produce the bars efficiently.

References:

David, F. (2017). Strategic Management: A Competitive Approach, Concepts & Cases (16th ed.) Pearson Education, Inc

EFE

External Factor Evaluation Matrix

Hersey

Key External Factors

Weight

Rating

Weighted Score

Opportunities

1. Reports have been made on health benefits to eating dark chocolates

.12

6

.72

2. Demand for chocolate increased in China and India

.14

5

0.70

3. 81% of households consume chocolate candy

.12

4

.48

4. Room for growth and expansion

.14

3

.42

Threats

1.Demand for chocolate during the holiday season

2.Price fluctuations in dairy market

3. Obese in Americans

.14

3

.42

Totals

.66

2.74