IV.

INTERNAL ENVIRONMENT SITUATION

A. Review of Company Posture

Hershey is a global confectionery leader known for bringing goodness to the world through chocolate,
sweets, mints, gum and other great tasting snacks. Hershey is the largest producer of quality chocolate
in North America, a leading snack maker in the United States and a global leader in chocolate and non-
chocolate confectionery. They market, sell and distribute their products under more than 80 brand
names in approximately 85 countries worldwide. Hershey's principal product offerings include chocolate
and non-chocolate confectionery products; gum and mint refreshment products; pantry items, such as
baking ingredients, toppings and beverages; and snack items such as spreads, meat snacks, bars and
snack bites and mixes, popcorn and protein bars and cookies.

B. Review of Company Culture

Hershey Company have a unique and vibrant culture, and strengthen it with every hire they make.
“Being ‘One Hershey’ is about winning together and bringing our whole selves to work each and every
day. We value the contributions that each individual brings through our different experiences and
backgrounds. We are the sum of our experiences -- and our business and connections to consumers are
enriched by it.” siad by Michele Buck, President & CEO. Working at Hershey is built on agile
collaboration with a bias for action, openness to change and building together. If you’re decisive, enjoy
smart risk taking and thrive on opportunity, Hershey is the place for you. If you have a desire to give
back to your community or communities around the world, you’ll feel right at home here. We believe
that success is better when it’s shared.

C. Review of Company Resources

i. Marketing

The foundation of Hershey's marketing strategy is the strong brand equities, product innovation and the
consistently superior quality of their products. Hershey Company devote considerable resources to the
identification, development, testing, manufacturing and marketing of new products. They are utilizing a
variety of promotional programs directed towards their customers, as well as advertising and
promotional programs for consumers of their products, to stimulate sales of certain products at various
times throughout the year. In conjunction with their sales and marketing efforts, their efficient product
distribution network helps them maintain sales growth and provide superior customer service by
facilitating the shipment of their products from their manufacturing plants to strategically located
distribution centers. Hershey's primarily use common carriers to deliver their products from these
distribution points to their customers.

ii. Finance

Despite the current situation, Hershey's still assess their liquidity in terms of their ability to generate
cash to fund their operating, investing and financing activities. Significant factors affecting liquidity
include cash flows generated from operating activities, capital expenditures, acquisitions, dividends,
repurchases of outstanding shares, the adequacy of available commercial paper and bank lines of credit,
and the ability to attract long-term capital with satisfactory terms. Hershey Company generate
substantial cash from operations and remain in a strong financial position, with sufficient liquidity
available for capital reinvestment, strategic acquisitions and the payment of dividends.

iii. Operations

The operating environment continues to change and over the course of the second quarter the
company's performance improved. The effect on customer mobility, retail operations, government
regulations, and the macroeconomic climate of recent spikes in coronavirus cases, however, remains
uncertain. As a consequence, at this point the organization is not offering fresh fiscal 2020 guidance. In
the second half of the year the company expects accelerated revenue growth based on momentum
coming out of the second quarter, assuming no major disruption to current market patterns. In the
second half of the year the firm also expects pricing and cost control to drive margin expansion. We
remain optimistic that we will be able to meet current business needs, invest for the future and return
capital to stockholders with our healthy balance sheet and good cash flow. In the North America market
the company expects stronger second half revenue growth led by sustained elevated at-home
consumption, price realization, the replenishment of retailer and distributor inventory levels, and
recovering sales in food service and specialty retail channels. Currently, the organization does not
anticipate seasonal success to have a significant effect on the financial results of the second half,
although the implications of the revival of COVID-19 cases on customer engagement in seasonal
activities and the consequent retail impact remain unclear. Given current travel retail, government and
macroeconomic patterns, the company expects a slower recovery in the foreign and other segments.
Sales patterns are projected to change compared to the second quarter, but will decline by double digits
in the second half compared to the previous year.

iv. Research and Development

Hershey's engage in a variety of research and development activities in a number of countries, including
the United States, Mexico, Brazil, India and China. Hershey Company develop new products, improve
the quality of existing products, improve and modernize production processes, and develop and
implement new technologies to enhance the quality and value of both current and proposed product
lines.

v. Human Resource Management

At Hershey, Human Resources is a strategic partner responsible for the most important asset of their
company: their people. Through a modern HR Consulting model, a strong framework exists to guide
their business leaders toward transforming their functions through simple processes and cutting-edge
talent programs. More than just a collection of remarkable people, they're an agile team dedicated to
bringing goodness to the world. Provide the Human Resources Global Business Services company with
policy and guidance. Responsible in the fields of insurance, wages, HR infrastructure, HR call center and
payroll for the delivery of core HR services. Intake HR procedures and drive cost savings through
optimization and creativity of processes. Recognize the ability to absorb HR processes and reduce costs
by process optimization. Decrease 2019 Open Enrollment spending by 35 percent due to change in the
system of content distribution and creation of a retiree website. Extensive experience in the deployment
and management of applications such as SAP, Successfactors, Peoplesoft, and Lawson for Human
Resources Information Systems and HR software. Global HR implementation of Service Now is currently
leading. A respected professional with a reputation for producing and exceeding standards with quality
performance.

vi. Information System

Due to the effects of the novel coronavirus pandemic, Hershey's implementation delay supports
evidence for the problem of businesses delaying or canceling IT investments. Leaders are also looking at
equipment spending on cutting regions, as stay-at-home orders remain in place throughout most of the
nation. Leaders are taking a mixed approach in the case of Hershey, prioritizing some of its ERP efforts
while suspending others. Because of the pandemic, Hershey, a food producer, has not seen demand
dropping dramatically in the U.S. Net revenues rose 1 percent year-over-year during the first quarter. In
a recessionary era, businesses can press ahead with tech updates, as a downturn in business helps
mitigate disruptions, experts say. In almost half of small to mid-sized companies, a similar reshaping of
priorities is also taking place, with 46 percent of owners planning to delay or decrease their planned
spending on software. Furthermore, the Hershey Company selects and develops the best sources of
supply meeting the quality and service requirements at competitive costs. To strengthen their base of
world-class suppliers, Hershey seeks opportunities for qualified minority, women, veteran, LGBT,
disadvantaged and disabled owned companies to compete on an equal basis with other suppliers and
contractors as primary suppliers. Hershey is now using the Diversity Information Resources’ database to
find certified diverse suppliers.

vii. Others

Many of Hershey's confectionery brands enjoy wide consumer acceptance and are among the leading
brands sold in the marketplace in North America and certain markets in Latin America. Hershey
Company sell their brands in highly competitive markets with many other global multinational, national,
regional and local firms. Some of their competitors are large companies with significant resources and
substantial international operations. Competition in Hershey's product categories is based on product
innovation, product quality, price, brand recognition and loyalty, effectiveness of marketing and
promotional activity, the ability to identify and satisfy consumer preferences, as well as convenience and
service. Hershey have also experienced increased competition from other snack items, which we are
focused on expanding the boundaries of their core confection brands to capture new snacking
occasions.

References:

https://www.google.com/url?
sa=t&source=web&rct=j&url=https://www.annualreports.com/Click/19694&ved=2ahUKEwisqbnP08PtA
hVhxYsBHSQTDU8QFjANegQIBhAB&usg=AOvVaw0I-snOxWtstfzWx8RJIYzv
https://careers.thehersheycompany.com/us/en/culture#:~:text=WE%20HAVE%20A%20UNIQUE
%20AND,WITH%20EVERY%20HIRE%20WE%20MAKE&text=%E2%80%8B%E2%80%8B%E2%80%8B
%E2%80%8B%E2%80%8B%E2%80%8B%E2%80%8BWorking%20at%20Hershey,is%20the%20place
%20for%20you.

https://www.globenewswire.com/news-release/2020/07/23/2066432/0/en/Hershey-Reports-Second-
Quarter-2020-Financial-Results-Provides-2020-Business-Update.html

https://www.linkedin.com/in/jennifer-firestone-423a40a

https://www.ciodive.com/news/hershey-erp-implementation-coronavirus/576750/

https://www.thehersheycompany.com/content/corporate_SSF/en_us/shared-goodness/shared-
business/responsible-sourcing.html