Exercise 5A Develop Hypothetical Hershey Company Strategy

Exercise 5A Develop Hypothetical Hershey Com- pany Strategies Purpose Table 5-4 identifies, defines, and exemplifies 11 key types of strategies available to firms. This exercise will give you practice formulating possible strategies within each broad category. Instructions 1. Step 1 Develop an 11 x 2 matrix where Hershey's (1) North American and (2) International segments are along the top and the 11 strategies listed in Table 5-4 are along the left. 2. Step 2 Review the Hershey divisional information provided in the Cohesion Case (pages 28-29). 3. Step 3 In each of the 22 cells within your 11 x 2 matrix, write in a hypothetical strategy for the re- spective business segment indicated. Be specific with numbers. Strategic Management: A Competitive Advantage Approach, Concepts and Ca... Table 5-4 Alternative Strategies Defined and Recent Examples Given Strategy Definition Example Forward Integration Gaining ownership or increased controls Amazon began rapid delivery over distributors or retailers services in some U.S. cities. Backward Integration Seeking ownership or increased control of a firm's suppliers Starbucks purchased a coffee farm. Horizontal Integration Seeking ownership or increased control over competitors BB&T acquired Susquehanna Bancshares tennis Market Penetration Seeking increased market share for present Under Armour signed tennis products or services in present markets champion Andy Murray to a 4- through greater marketing efforts year, $23 million marketing deal. Market Development Introducing present products or services into new geographic area Gap opened its first five stores in China Calin andalan heim Strategic Management: A Competitive Advantage Approach, Concepts and Ca... Introducing present products or services Gap opened its first five stores in into new geographic area China. Development Product Development Seeking increased sales by improving present products or services or developing new ones Amazon just began offering its own line of baby diapers and wipes. Related Diversification Facebook acquired the text- Adding new but related products or services messaging firm WhatsApp for $19 billion Unrelated Kroger and Whole Foods Market Adding new, unrelated products or services are cooking meals, becoming 33333333 restaurants. restaurants. Regrouping through cost and asset S taples closed 250 stores and reduction to reverse declining sales and reduced by 50% the size of other profit stores. Retrenchment Divestiture Selling a division or part of an organization Sears Holdings divested its Land's End division to Sears shareholders. Strategic Management: A Competitive Advantage Approach, Concepts and Ca... Unrelated Diversification Adding new, unrelated products or services are cooking meals, becoming restaurants. Retrenchment Regrouping through cost and asset reduction to reverse declining sales and profit Staples closed 250 stores and reduced by 50% the size of other stores. Divestiture Selling a division or part of an organization Sears Holdings divested its Land's End division to Sears' shareholders. Liquidation Selling all of a company's assets, in parts, for their tangible worth The Trump Taj Mahal in Atlantic City, New Jersey, faces liquidation. Organizations cannot excel in too many things because resources and talents get spread thin and com- petitors gain advantage. In large, diversified companies, a combination strategy is commonly employed when different divisions pursue different strategies. Also, organizations struggling to survive may si- multaneously employ a combination of several defensive strategies, such as divestiture, liquidation, and retrenchment