...Three Case Study Questions Trina G. Stevens trinagstevens@bellsouth.net Part III of the Course Project for PM598 Nov10 Contract and Project Management Presented to Instructor Robert Davy of DeVry University December 5, 2010 RUHLING MANUFACTURING COMPANY QUESTIONS Question # 1: Why might negotiation be favored over competitive bidding in certain procurement situations? A buyer or a procurement section of an organization, or business might choose negotiation over competitive bidding when a project is small, not planned, or an emergency. There are some situations in which a buyer would favor negotiation rather than competitive bidding. For example, when the buyer is contracting for part of the seller’s services rather than a product. Also when there are ambiguities involved with the project. Another reason to use negotiation is when cost and risk cannot be correctly identified early within the project. Negotiation is used a lot when there are new, or unexpected ideas introduced to solve a problem within the project. Negotiation is usually cheaper and quicker than competitive bidding. Question # 2a: Considerations of Epsilon's alternative proposal: a. What is the applicability of a requirements contract from Ruhling’s point of view? - Assume that Epsilon will still make a profit resulting from economics of long runs and learning curves The applicability of a requirement contract from Ruhling’s point of view is that they would agree...
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...2012 Hershey Company Financial Report 2012 Hershey Company Financial Report Audrey Goldman Chloe Bellewoar Maria Sharpe Jenna Fischer Jean Zhao Audrey Goldman Chloe Bellewoar Maria Sharpe Jenna Fischer Jean Zhao Table of Contents Introduction………..……………………………………………………….3 Financial Analysis………………………………………..……………..5-18 Cash Flow Adequacy Ratios………………………………………….5 Liquidity Ratios……………………………………………………..6-7 Vertical Analysis-Balance Sheet……………………………………8-9 Vertical Analysis-Income Statement……………………………..10-11 Trend Analysis……………………………………………………….11 Market Strength Ratios……………………………………………...12 Long Term Solvency Ratios………………………………………….13 Dupont Analysis……………………………………………………..14 Profitability Analysis…………………………………………….15-16 Coverage Ratios………………………………………………….16-17 Horizontal Analysis……………………………………………...17-18 Comparative Industry Analysis………………………………………….19 Direct Competitor Analysis……………………………….…………19 Market Capitalization……………………………………………….19 Price per Earnings…………………………………………………..20 Revenue Growth…...………………………………………………...20 Competitor Stock Graph Comparison……………………………….20 Profit Margin………………………………………………………..21 Cash Flow to Sales…………………………………………………..22 Investment Analysis…………………………………………………...23-25 DCF Analysis…………………………………………………….23-24 Buy-Hold-Sell Decision……………………………………………...25 Bibliography………………………………………………………………..26 Introduction Introduction Hershey’s Story The Hershey Company began in 1894, just a subsidiary...
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...Financial Analysis of Hershey and Tootsie Roll Keller University ACCT-504 Instructor: Financial Analysis of Hershey and Tootsie Roll Introduction Tootsie Roll and Hershey are two similar companies with a similar product offering, but they operate on entirely different scales. In an effort to determine the better investment of the two companies we will utilize multiple financial analysis ratios to gauge the health of the respective companies in terms of liquidity (the ability to pay short-term liabilities and respond to opportunities), solvency (the long-term viability of the company) and profitability (the efficiency at which the can turn it’s resources into profits). However, the snapshot picture of health that a single years worth of financial statements provide is not enough. Below we have offered a horizontal analysis of the respective companies to show the change in their health from 2012 to 2013 and analyzed the two companies against each other to show why we recommend Hershey as the better investment. Liquidity and Solvency Current Ratio The current ratio is defined as the current assets divided by the current liabilities for a given period. This ratio is important because it helps measure a company’s ability to pay their current liabilities with their current assets. This shows helps determine the liquidity of the companies and their ability to respond to market opportunities...
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...Managerial Use & Analysis Project: -Ratio Analysis Group Project by Analysis Report In comparing Hershey’s and Tootsie Rolls Company with respect to Liquidity, Solvency and profitability, we will use data from the financial statements of both the company of the year end December 31st 2008. Among all the three ratios provided in the data sheet i.e. Liquidity, Solvency and Profitability, to invest in a company I will choose to see the profitability ratio of a company. According to 2008 financial statements of both the company and looking at the ratios I will choose Tootsie Rolls Corporation. I will invest in Tootsie Rolls Corporation I would like to answer the question, why did I select Tootsie Rolls Corporation and not Hershey Corporation. As you know and I know Hershey is a big company and over the year this company has proven its investors and creditors that its one of the big companies all over the world. Big don’t means better? Even a medium size company like Tootsie Rolls generate a good amount of money not in million but in thousands. So what it has a good return ratio? Yes. Liquidity Ratio Analysis: - What does Liquidity Ratios mean? A class of financial metrics that is used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. Comparing Tootsie Rolls and Hershey Corporation for the...
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...HERSHEY FOODS CORPORATION: BITTER TIMES IN A SWEET PLACE Teaching Note Synopsis and Objectives The proposed sale of Hershey Foods Corporation (HFC) during the summer of 2002 captured headlines and imaginations. After all, Hershey was an American icon, and when the company’s largest shareholder, the Hershey Trust Company (HSY), asked HFC management to explore a sale, the story drew national and international attention. The company’s unusual governance structure put the Hershey Trust’s board in the difficult position of making both an economic and a governance decision. On the one hand, the board faced a challenging economic decision that centered on determining whether the solicited bids provided a fair premium for HFC shareholders. On the other hand, the governance decision required the board to balance its fiduciary responsibility against the original mandate of Milton Hershey to support the Hershey School in perpetuity. The fiduciary responsibility is relatively simple compared with satisfying a broad array of constituents, including the Hershey community, HFC employees, and Pennsylvania’s attorney general. In addition to this teaching note, we provide a variety of teaching supplements to support a discussion of the complex issues presented by the case: • Video footage of the Hershey community and key players in the case • Excel spreadsheets for key case exhibits • Excel spreadsheets for key teaching-note exhibits • Projection-ready...
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...Summary 4 Situation Analysis 7 Company 8 Who We Are 8 What we are known for 9 Competitive Advantage 9 Mission Statement 10 SWOT Analysis 11 Organizational Structure 14 Company’s Capabilities and Processes 14 Industry environment 15 Customers 15 Who are they 15 Any recent or expected changes in behavior, attitudes, composition of the customer base 16 What are they purchasing from your company 16 Why are they buying company’s product 16 Describe order qualifying and order winning characteristics of your company’s product(s) 17 Context 17 Industry 17 Economics 19 Technological 21 Societal 22 Legal 24 Competitors 25 Kind Healthy Snacks 25 Nature Valley 28 Kellogg’s 31 Financial Ratio 34 Collaborators 35 Growth Strategy 36 Detailed description of the growth strategy 37 Goals/Objectives 37 Segmentation 37 Targeting 38 Positioning 38 Strategy Execution 40 Product 41 Goals and Product Description 41 Process Description 42 Life Cycle Stage 43 Place 43 Goals and Market Exposure 43 Channels Used 44 Supply Chain System 45 Promotion 46 Goals 46 Promotional Blend 47 Price 50 Goals 50 Value Proposition and Price Sensitivity 50 Pricing Strategy (Short Term/Long Term) 51 Breakeven Analysis 52 Implementation and Control 53 Timing and Implementation Activities 54 Sales Estimates (Forecast) 54 Forecast/Estimates 56 Scenario Analysis and Discussion 57 Sensitivity Analysis and Discussion 59 ...
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...sought out to ensure what’s best for not just the company but the consumer as well. Marketing: This Is Just the Beginning Introduction In the beginning there was milk, sugar and cocoa; these three main items combined were the beginning of an empire. With this empire comes a long laundry list of marketing strategies that helped get a company known as Hershey to the top of the list when it comes to candy manufacturers. Market Force 1: Description and Analysis of impact on product/service Milk, Sugar, Cocoa and the Cost of It All. Product cost of these particular items tends to increase consistently. In order to keep the ability to sell the product the companies have to ensure that they remain competitive. Despite that Hershey obtains their cocoa from across seas it appears to becoming harder for the company to produce the chocolate at the price that it was being produced at just over a year ago. In results, Hershey decided to make the weight of the candy bar lighter while keeping the price the same. Of course in this day and time remaining competitive isn’t exactly easy. Consumers may begin to fear that because of this, the taste of the candy may begin to suffer. Market Force 2: Description and Analysis of impact on product/service Distribution Cost If a company can figure out how to keep the cost of distribution to a minimum the product will become easier to get out to the consumers. This means that Hershey will have to locate other options that are cheaper...
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...Segmentation Bases Segmentation is the process of diving consumers in groups based on their needs. There are four different segmentations that a company can base their product on and they are as follow: Geographic Segmentation divides the market into different geographical units such as the region, climate, zone, state, country, district or urban/rural area which one lives. Demographic Segmentation is based on the race, religion, community, language, gender, marital status, occupation, and income of the individual. Psychographic Segmentation is based on individuals who have the same interest and by similar or same products. Divides individuals based on social class, lifestyle, or personality traits. Behavioral Segmentation divides buyers into groups based on their knowledge or responses to a product. Description of Each of the Target Markets One of the target markets that I would like to reach will be the demographic segmentation. That’s because looking at some of the products that the Hershey Company products they are based around the females. One product in particular is the Hershey Bliss, which is a square piece of chocolate, which are targeted to women in the age group of 25-49 years of age. This allows women in this age bracket to seek chocolate as a means of personal reward, comfort and indulgence. Analysis of Two Competitors and their Positioning Two of Hershey’s competitors are: M&M/Mars, which is their biggest competitor and the other one is Nestle...
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...The Hershey Company An Integrated Global Marketing Case Study | AbstractThe confectionary industry is becoming intensely competitive and so, the Hershey Company needs to continue to strengthen brand loyalty to stay competitive in a growing and changing global market. Hershey’s has increased the value proposition of chocolate and snacking in the minds of consumers by producing a variety of flavors and product choices that are marketed to targeted audiences in targeted segments through specific channels of communication. The company’s strategic focus on aligning marketing strategies with changing consumer preferences has led Hershey’s to expand their integrated marketing communications plan into social media channels and produce innovative new products for the health-conscious consumers. Rebecca Simmons MBA FP-6012 Assessment 5 | The Hershey Company An Integrated Global Marketing Case Study | AbstractThe confectionary industry is becoming intensely competitive and so, the Hershey Company needs to continue to strengthen brand loyalty to stay competitive in a growing and changing global market. Hershey’s has increased the value proposition of chocolate and snacking in the minds of consumers by producing a variety of flavors and product choices that are marketed to targeted audiences in targeted segments through specific channels of communication. The company’s strategic focus on aligning marketing strategies with changing consumer preferences has led Hershey’s to expand...
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...Vs Hershey The purpose of this financial analysis is to compare Tootsie Roll and Hershey Inc to the industry average financial ratios to determine which company will be the best investment opportunity. This analysis will evaluate and compare the company’s liquidity, solvency and profitability ratios from 2004. Tootsie Roll, Inc. and Hershey Inc are both companies well known for the selling of confectionary goods. Hershey is publicly traded under NYSE: HSY, Tootsie Roll under NYSE: TR. Both are listed under SIC 2064, Candy and other Confectionary products. • Liquidity Liquidity ratios measure the short-term ability a company to pay its obligations and meet unexpected needs of cash. These numbers can be found by analyzing the company’s balance sheet. The company that closely matches or exceeds the industry averages in liquidity is Tootsie Roll. Tootsie Roll’s current ratio of 2.34 exceeds that of the industries 1.29. They also have a lower cash to debt ratio 1.05 (2.37 industry, days in inventory 63.98 (industry 72.7) and a quicker inventory turnover 5.7 (industry 6.05). The only ratio were Hershey exceeds Tootsie Roll is receivables turnover ratio. Hershey collects more of its receivables but Tootsie Roll collects faster. Tootsie Roll is better suited to collect cash quickly to pay its obligations and meet unexpected cash needs. • Solvency Solvency ratios measure a company’s ability to last over an extended period of time, or how a company will...
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...employs: In answering the above question my recommendations of the redesign of Hersey’s performance management system to appeal to the diverse group that they employee would be to keep their current designed performance management system. Their redesign system caters to two specific generations, the baby boomers and the younger generation. Hershey has a system in place in which the baby boomers train/mentor the new “millennial” worker (employees in their twenties) due to, “the baby boomers tend to be interested in leaving a legacy, making the world better, so they generally are enthusiastic about mentoring their younger colleagues” (Noe, Hollenbeck, Gerhart, Wright, 2011). The baby boomers are role models, coaches, and advocates for Hershey. Mentoring gives them opportunities to utilize their abilities, experience, and wisdom both to their own benefit and that of Hersey’s to guide the younger generation employed with the company. Hershey has redesigned its performance management system appealing to the younger generations’ eagerness for challenge, autonomy, and results, the redesign was a bottom-up effort, in which people throughout the company set goals and track progress on projects. The system measures not only business results but whether they are achieved in accordance the Hershey’s four core values (Noe, Hollenbeck,...
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...The Hershey Company Presents Bucket of Chocolate The Hershey Company Presents Bucket of Chocolate Table of Contents Situational Analysis Executive Summary 4-5 Introduction 5-6 Industry Analysis 7 Product Category 7 Nature of Demand 7 Product Life Cycle 8 Top Competitors 9 Company Analysis 9 The Hershey Company Background 9-10 The Hershey Company Mission Statement 10 The Hershey Company SWOT Analysis 10-16 Competition 17 Nestlé Background & SWOT Analysis 17-21 Mars Background & SWOT Analysis 21-25 Objectives for the New Product Plan 25-29 Segmenting, Targeting, Positioning 29 Segmenting 29-30 Demographic 30-32 Geographic 32-33 Psychographic 33 Behavioral 34 Target Market 34-35 Positioning 35 Marketing Mix Product Decisions 36 Product Description/Classification 36 Branding, Packaging, and Labeling 37 Hershey’s New Product vs. Hershey’s Existing Products 38 Hershey’s Bucket of Chocolate vs. Competitors 38-39 Price Decisions 39 Pricing Strategy 39-40 Hershey’s Bucket of Chocolate vs. Competitors 40-42 Place Decisions 43 Distribution Channel and Physical Distribution 43 Distribution Intensity 43-44 Placement Decisions Fit Positioning and Pricing Goals 44-45 Hershey’s In-Store Placement vs. Competitors...
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...Hershey Company Name University Abstract The Hershey Company introducing the world of chocolate examines the remarkable successes and failures of the company. They are the largest North American manufacturer of chocolate and sugar confectionery products in its constant pursuit to maintain growth and profitability in a competitive industry. Hershey Company has an array of chocolate and confectionery products, which includes candies, beverages, baking ingredients, gums, syrups, and toppings for ice cream. Hershey Company produces and maintains more than 80 different brands. Hershey chocolate bar is known as the “Great American Chocolate Bar,” which is produced by Hershey Company and was invented by Milton Hershey over a hundred years ago and its products are sold in sixty different countries. We will look at the history of the company, its good marketing plan to expand that allows them to be more profits and more world recognition. Hershey Company maintain its dominant position in the industry and where the company is going in the near future. Hershey Company Mission and Objective Vision The vision of The Hershey Company is—Continuing Milton Hershey’s legacy of commitment to consumers, community and children, we provide high-quality Hershey’s products while conducting our business in a socially responsible and environmentally sustainable manner (The Hershey Company, n.d.). Mission Statement The mission of Hershey’s is encapsulated in the following words: Bringing...
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...A. TWO KEY LESSONS LEARNT FROM THIS CASE Hershey Company is famous known for being the biggest manufacturer of chocolates and confectionery products in North America and grocery products in over 60 countries worldwide. In 2009, Hershey sales up to 3.23 percent. Advertising expenses increased by 46 percent as the company continued to promote iconic brands such as the Hershey Kiss and Reese’s products. Due to lower commodity prices, the company plans to discontinue their Cacao Reserve brand as well as their Starbucks chocolate partnership. The company also plans to close their online gift business. The company expanded its global presence via joint ventures in china and India. From this case, we found two key lessons as following: (a) The first lesson is about the important of expanding to global market (b) The second lesson is about the importance for the firm to keep developing customer preferences. It is important for company to focus on how to formulate global product strategy to penetrate growing international markets. Therefore, Hershey should come up with new strategies in finance, marketing and production department to complete globally and to increase the customer satisfaction and market share. B. Vision Statement Since we could not find a vision statement of Hershey company then we suggest a vision as below: “Achieving consumers needs which making chocolate more healthy, delicious and delightful for life” From our opinion, this...
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...Hershey Corporation’s Financial Analysis Hershey’s is a well established leader in North America for manufacturing chocolate and chocolate related products. In determining whether to invest in Hershey, their liquidity, solvency and profitability will be examined. In investigating Hershey’s financial reports identifying any short-term financial problems should be relatively simple. For 2009 the Hershey Corporation had a current ratio of 1.52, which indicates that Hershey was able to meet their 2009 near-term operating needs sufficiently. Knowing that a company is not having any problems paying their bills in a timely manner is definitely a huge positive. A working capital of $474,806 helps to confirm that Hershey’s had plenty of cash on hand to handle short-term obligations. Although their current cash debt coverage ratio is .98 and not above a 1, which indicates that they were unable to repay all of their debts within one year, their high level of inventory turnover shows that they have a consistent stream of incoming cash flows to remain in good standings with their debtors. The liquidity of the Hershey Corporation for 2009 would allow them to cover financial obligations in a timely manner with minimal cost to the corporation as a whole. Hershey’s debt-to-assets ratio was at a 79% in 2009, which means that majority of their assets were financed through equity. Looking from a creditor’s stand point, since their debt-to-assets ratio is below a 1 if creditors demanded...
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