International Market Entry Strategy for Hershey Foods Corp

Topics: Chocolate, The Hershey Company, Hershey, Pennsylvania Pages: 14 (2786 words) Published: January 22, 2013
International Market entry Strategy for Hershey Foods Corp.

By Prihadi Wahyono (Jan 22, 2013)

I. Introduction

The Hershey Company is famously known for being the biggest manufacturer of chocolates and confectionery products in USA, having hired over 15,000 employees worldwide and exporting their products to ninety different countries over the world.

The Hershey Company has several popular brands, some of most notable ones being Hershey’s Chocolate Bar, Kit Kat, Hershey’s Kisses, Reese’s, York Peppermint Pattie, Rolo and Krackle Bar.

With the help of these brands, Hershey gained success and popularity, making the company’s net worth over $4 billion dollars.

Hershey’s products include chocolates, confectioneries, food and beverage related products such as baking ingredients, toppings etc.

The company lives by its mission statement, “Undisputed Marketplace Leadership” ( Hershey continues to preserve a higher position by successfully converting consumer desires into reality.

II. Objective

It was Mr. Roger Clarke, Vice president Sales of Hershey International, a division of Hershey Foods Corporation, was reviewing the Australian experience. He had a board meeting to attend in a week’s time and had to present his assessment of what the cause of failure had been in Australia. Was it strategic mistake or had implementation been the problem, and what strategy would be appropriate for re-entry. in this case we will try to help how to make the re-entry going smoothly by using the key SCM strategies, tools, best practises

III. Literature

The International Marketing Entry Evaluation Process is a five stage process, and its purpose is to gauge which international market or markets offer the best opportunities for our products or services to succeed. The five steps are Country Identification, Preliminary Screening, In-Depth Screening, Final Selection and Direct Experience. Let's take a look at each step in turn 1. Step One - Country Identification

The World is your oyster. You can choose any country to go into. So you conduct country identification - which means that you undertake a general overview of potential new markets. There might be a simple match - for example two countries might share a similar heritage e.g. the United Kingdom and Australia, a similar language e.g. the United States and Australia, or even a similar culture, political ideology or religion e.g. China and Cuba. Often selection at this stage is more straightforward. For example a country is nearby e.g. Canada and the United States. Alternatively your export market is in the same trading zone e.g. the European Union. Again at this point it is very early days and potential export markets could be included or discarded for any number of reasons. [pic]

2. Step Two - Preliminary Screening
At this second stage one takes a more serious look at those countries remaining after undergoing preliminary screening. Now you begin to score, weight and rank nations based upon macro-economic factors such as currency stability, exchange rates, level of domestic consumption and so on. Now you have the basis to start calculating the nature of market entry costs. Some countries such as China require that some fraction of the company entering the market is owned domestically - this would need to be taken into account. There are some nations that are experiencing political instability and any company entering such a market would need to be rewarded for the risk that they would take. At this point the marketing manager could decide upon a shorter list of countries that he or she would wish to enter. Now in-depth screening can begin.

3. Step Three - In-Depth Screening
The countries that make it to stage three would all be considered feasible for market entry. So it is vital that detailed information on the target market is obtained so that marketing decision-making can be accurate. Now one can deal with not only...
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