Hershey

Milton S. Hershey, the founder of the giant chocolate manufacturing firm bearing his name, tried a number of different ventures before eventually succeeding in the chocolate business. In his early years, Milton enjoyed his apprenticeship as a candy maker for Joseph H. Royer, a confectioner.

At the age of 19, Hershey decided to go into the candy business for himself. His venture in Philadelphia failed, as did efforts with his father. Back in Lancaster, Hershey began manufacturing caramels. The business quickly expanded and in 1900 he sold his company for $1 million. He used the money for a construction of a chocolate processing plant in Derry Township, about 15 miles east of Harrisburg.

Within 10 years, the company was making more money than they could spend. In 1909, Hershey built a home for unfortunate boys and used 486 acres of land to build the Hershey Industrial School. Later on, Hershey also built a community building containing two theatres, a dining room and a cafeteria, a gymnasium, swimming pool, bowling alley , fencing and boxing room. Hershey also constructed a 7200 seat Hershey Sports Arena in 1936, and the Hershey Stadium was finished in 1939. Later on Hershey constructed Hershey World, a simulated chocolate plant, Hershey Park, a theme park, the Hershey Museum of American Life and the Hershey Gardens.

In the 1920s, Milton Hershey decided to reorganize the company. The Hershey Chocolate company was dissolved, and three separate companies were organized: the Hershey Chocolate Corporation, the Hershey Corporation, and the Hershey Estates. All three of these organizations had different roles in the Hershey world. The Hershey Chocolate Corporation controlled all the chocolate properties. The Hershey Corporation was responsible for the Cuban sugar interests and the Hershey Estates was responsible for the various businesses and municipal services in the town of Hershey.

Strategic Planning

Hershey began to emphasize strategic planning in the late 1970s. During the 1960s and 1980s, Hershey pursued an aggressive strategy of diversification. The name of the Hershey Chocolate Corporation was changed to the Hershey Foods Corporation, and by 1982, Hershey had three major product groups: the chocolate and confectionery group; restaurant operations; and the other food products and service group.

Although Hershey Foods was among the 25 largest food and beverage companies in the United States by 1993, the company was coming under increased competition pressure in the U.S. market as a number of companies introduced their own goods. On the other hand the U.S. market was slowly becoming saturated, so Hershey needed to look for other alternatives to make a reasonable profit, and to enhance the value of their shareholders' investment. One alternative to continued investment in the U.S. market was expansion into international markets.

Many factors have made Mexico a potentially profitable location for U.S. direct investment and trade. Mexico's population of 89.5 million people is approximately one-third as large as that of the United States. This represents a large market for U.S. goods. Because of its geographic proximity to the United States, transportation costs from the United States have been minimal. This has increased the competitiveness of U.S. goods in comparison with European and Asian goods, which must be transported at substantial cost across the Atlantic or Pacific oceans. The passage of the North American Trade Agreement (NAFTA) has resulted in further opportunities.

Recognizing this opportunity Hershey's changed its mission statement: "Our mission is to be a focused food