A bit on Performance, Competitve Advantage, and Stategy....

Some key points regarding performance, competitive advantage, and strategy taken from The Hershey Company 2010 Annual Meeting of Stockholders held May 4, 2010. If you would like to look over the presentation, it can be viewed at:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDQyMzF8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

Performance:

They state that they have had top-tier performance since adoption of new strategy in 2008. From 1/1/08 to 4/23/10, Hershey shares have out performed peer group. I am interested to see if I can find something outlining their strategy before 2008.

In 2010, they expect a Net Sales increase of at least 6% and an Adjusted Earnings Per Share-diluted increase in the low-to-mid teens.

Competitive Advantage:

Confectionery-an advantaged category
-High impulse purchases
-High household penetration
-High purchase frequency
-Responsive to merchandising
-Seasonal destination
-Low private label presence
-Recession resistant

Significant competitive advantages:
-Iconic brands
-Category leadership
-Dedicated direct sales force
-Proprietary go-to-market tools

Hershey is loved by customers and has a strong corporate reputation built on a unique heritage that is still at heart of the company today, both of which they feel also gives them a competitive advantage.


Strategy:

Hershey is evolving their supply chain. One way is thru reducing the number of manufacturing facilities and distribution centers for an expected savings on capital expenditures of $30 million to $60 million.

Their strategy places a great emphasis on innovation leading to enhanced consumer and category understanding and a developed disciplined process. They also place an emphasis on new product launches, both variations of current core products and introduction of new products/segments.