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Department
Management
Course
MGT 247
Professor
Reed
Semester
Spring

Description
SHR Test Two Study Guide Question 1: Hershey’s Business Level Strategy 1a. What are the five generic business-level strategies that a company may employ for each product/service it offers? Business-level strategy is an action plan the firm develops to describe how it will compete in its chosen industry or market segment. An effective business-level strategy has a clear statement of the value to be created for customers. 1. Cost leadership 2. Differentiation 3. Focused cost leadership 4. Focused differentiation 5. Integrated cost leadership/differentiation Key dimensions: competitive advantage & competitive scope 1b. List three different products that Hershey offers and describe its current business- level strategy for each. Please note that you are expected to justify your answer with an explanation as opposed to just listing the products and listing the strategies. 1. Hershey Kisses • Integrated Cost leadership and differentiation strategy • Kisses are very reasonably priced and as we learned with our guest speaker, Hershey is a cost leader among other “chocolate” suppliers because many chocolate candies are not truly milk chocolate. Hershey has an advantage, being real milk chocolate and at a reasonable cost. • Kisses are a unique, signature product of Hershey and are recognized by many people in the US. 2. Dagoba Chocolate • Differentiation strategy focused on uniqueness rather than cost • Hershey uses Dagoba to target the more health conscious consumers, seeing as Dagoba is marketed as a natural, organic dark chocolate. 3. Ice Breakers • Broad Differentiation Strategy • This is a contrasting product to attract customers to the brand itself without going against the usual competitors. Ice Breakers gum was the first proven to whiten teeth and the mints are the only one of their kind with tiny breath crystals in each mint. The strong and intense flavor of all Ice Breakers Products is what makes them unique in their class, giving Hershey an advantage. 4. Eat. Think. Smile. • Focused Differentiation Strategy? • Eat. Think. Smile. Is one of Hershey’s newest product line that they have created to target the health conscious population in our society. They have chose to market the high amount of antioxidants found in natural cocoa that they are using in their new granola, chips, and snack bars. Hershey has created a separate label even because they do not want people to see Hershey on the bag and think unhealthy chocolate. They feel by targeting the natural, antioxidant ingredients more people will buy these products. 1c. Given the opportunities that we have discussed as being present for Hershey in the environment and the internal resources that the firm has, choose 3 new products that it would make sense for Hershey to offer and describe the business-level strategy you would use for each product and why. Please note that I am looking for an integrative answer that demonstrates your thorough knowledge of the topics we have discussed related to Hershey. 1. Hershey Stackables • Integrated Cost Leadership/Differentiation Strategy? • This would be various types of Hershey’s chocolate such as Hersey’s Milk Chocolate, Milk Chocolate with Almonds, Cookie’s n Cream, etc. but the catch is that rather than being in a bar form and breaking off pieces, the pieces will be in a stack similar to Rolos. • This will differentiate Hershey from typical chocolate bars and make it more convenient to eat on the go. Hershey will also be a cost leader with this product just as they are with their current chocolate bars. 2. Dark Chocolate & Berries Energy Pack • Focused Differentiation Strategy • This Dark Chocolate and Berries Energy Pack will be a focused differentiation strategy targeting the active adult. This pack is full of rich antioxidants and will give people the energy they need to get through the day as well as be a delicious treat. Hershey will have to separate itself from being a chocolate company in order to successfully sell this product. It will be necessary to create a name that is more focused on the type of product and what its purpose is. 3. Hershey’s Straws • Differentiation Strategy • Hershey’s straws will be a fun product marketed for children to enjoy a glass of milk to get all the vitamins they need. These straws will be in many different Hershey flavors such as Reese’s peanut butter cup, Hershey milk chocolate, Hershey dark chocolate berry (with antioxidants, etc. Question 2: What are Hershey’s corporate-level strategies? 2a. What are the corporate-level strategies that a company may employ? Low levels of diversification: • Single business – more than 95 percent of revenue comes from a single business • Dominant business – between 70 and 95 percent of revenue comes from a single business Moderate to high levels of diversification: • Related constrained – less than 70 percent of revenue comes from the dominant business and all businesses share product, technological, and distribution linkages • Related linked – less than 70 percent of revenue comes from the dominant business and limited links exist between businesses High levels of diversification: • Unrelated/Restructuring - less than 70 percent of revenue comes from the dominant business and no link exist between businesses 2b. What are the means of applying these strategies? A company applies a single business strategy by just having one product that they are known for; this is only really relevant to truly “small businesses.” A company applies a dominant level strategy by using one product in most of their products and making it their signature, such as Hershey’s uses chocolate. A related constrained strategy is applied by having multiple types of products but they all use similar products, technology, and distribution  Hershey sort of uses this with their snack products and their refreshments that don’t both have to do with chocolate but are probably made in the same factory and distributed similarly. A company applies a related link strategy by having many products that are made, packaged, and distributed in different places. A company can create new products that are “unrelated” to what their company already has; for instance, Hershey came out with a brand of pasta, which was different from their usual chocolate products. 2c.What corporate-level strategies is Hershey currently utilizing and how? (pleas
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