There are various elements you must meet in the Recommendations section of your paper. I will summarize these requirements here, and then you can use the corresponding numbers (in bold) to find examples of each within the sample paper that follows.
Recommendation for Future Production
(1) Effectively develop a recommendation for how the firm can manage its future production by incorporating the data presented
(2) Relate the recommendation to the economic principles presented in the paper
Recommended Action
(3) Suggest how the firm’s position within the market and among its competitors will allow it to take the recommended action
(4) Provide advice for how the firm can strengthen its position in the market
Recommendation to Sustain its Success
(5) Describes how the firm can sustain its success going forward by evaluating the demand trends and price elasticity
(6) Provides specific ideas for how the firm can sustain its success
Here is an example of an exemplary Recommendation section for The Hershey Company:
Recommendation
(2) As Hershey continues to execute its business plan to increase its global market share, there’s growing concern on whether the cocoa farmers will be able to sustain enough supply to meet the company’s needs. Without cocoa, the company will not be able to manufacture chocolate as there is no other ingredient that can be used to manufacture the product. The majority of the world’s cocoa is supplied by small-scale family farmers who use “out-dated farming methods and lack resources to invest in fertilizers or in replacing ageing trees past their peak productivity” (Goodyear, n.d.). With low wages and inadequate funding for their crops, the farming community is living in poverty. As a result, the farmers are starting to leave the industry and future generations have no incentive to take over the cocoa farms so they are moving onto higher paying industry jobs. Many manufacturing companies are realizing the urgency that “no cocoa farmers = no chocolate bars” (Goodyear, n.d.).
(1) The recommendation would be for Hershey to support and invest in Fairtrade certified cocoa organizations, which encourage long-term business relationships with cocoa farmers by ensuring higher wages and proper resources to produce long-term quality products. (6) By aligning and buying their supplies from Fairtrade certified farmers, the company would be strengthening their business relationship and investing in the most crucial ingredient for the company’s products, cocoa. Without this ingredient, the company would no longer have a functioning chocolate confectionery business. The resources and funding would go towards “investing in replacing old cocoa trees to increase productivity, investing in better facilities for crop collection, storage, transport, and processing - business or organization development, and to support improvements in production and processing” (Goodyear, n.d.). (2) The investment would sustain future growth of cocoa farmers and supply the essential ingredient needed to make chocolate.
With recommendations in place to ensure a strong supply of cocoa, The Hershey Company can focus on meeting new and existing demand. (5 and 6) The rising demand for chocolate by the urban population in China is expected to grow by 60 percent from over the next five years (Reuters, 2015). Given the surging demand for chocolate in China, I recommend that Hershey continue to invest resources into expanding their operations to grow their sales in China. (3 and 4) While Hershey dominates the confectionary industry in the U.S. with a market share of 44.2 percent, Hershey is only the 6th largest internationally (Kahn, 2013). Hershey should utilize its resources and financial advantages from its strong U.S. operation to invest in advertising in China. Additionally, Hershey should maintain their strategic plan for global market success, which is to “produce high-quality products tailored to local taste preferences and to meet rapidly growing demand” (DailyFinance, 2013). These actions combines should help strengthen Hershey’s position in the Chinese marketplace.
(5 and 6) Additionally, I recommend that Hershey continue with their current process of slowly increasing their prices as the costs of production rise. With chocolate representing a small share of most consumers’ budgets, the inelastic demand allows the pricing increase to generate additional revenue. If the demand of chocolate were to become more elastic as time passes, then Hershey may want to adjust its pricing strategy to avoid experiencing a decline in revenue from raising prices.
References
Goodyear, D. (n.d.). The future of chocolate: why cocoa production is at risk | Sustainable Business - Fairtrade partner zone | The Guardian. Retrieved from http://www.theguardian.com/sustainable-business/fairtrade-partner-zone/chocolate-cocoa-production-risk
Kahn, L. (2013, November 1). Why So Little Candy Variety? Blame the Chocolate Oligopoly | TIME.com. Retrieved from http://ideas.time.com/2013/11/01/why-so-little-candy-variety-blame-the-chocolate-oligopoly/
Hershey Building State-of-the-Art Confectionery Plant in Malaysia to Serve Asia Region - DailyFinance. (2013, October 3). Retrieved from http://www.dailyfinance.com/2013/10/03/hershey-building-state-of-the-art-confectionery-pl/
Recommendation for Future Production
(1) Effectively develop a recommendation for how the firm can manage its future production by incorporating the data presented
(2) Relate the recommendation to the economic principles presented in the paper
Recommended Action
(3) Suggest how the firm’s position within the market and among its competitors will allow it to take the recommended action
(4) Provide advice for how the firm can strengthen its position in the market
Recommendation to Sustain its Success
(5) Describes how the firm can sustain its success going forward by evaluating the demand trends and price elasticity
(6) Provides specific ideas for how the firm can sustain its success
Here is an example of an exemplary Recommendation section for The Hershey Company:
Recommendation
(2) As Hershey continues to execute its business plan to increase its global market share, there’s growing concern on whether the cocoa farmers will be able to sustain enough supply to meet the company’s needs. Without cocoa, the company will not be able to manufacture chocolate as there is no other ingredient that can be used to manufacture the product. The majority of the world’s cocoa is supplied by small-scale family farmers who use “out-dated farming methods and lack resources to invest in fertilizers or in replacing ageing trees past their peak productivity” (Goodyear, n.d.). With low wages and inadequate funding for their crops, the farming community is living in poverty. As a result, the farmers are starting to leave the industry and future generations have no incentive to take over the cocoa farms so they are moving onto higher paying industry jobs. Many manufacturing companies are realizing the urgency that “no cocoa farmers = no chocolate bars” (Goodyear, n.d.).
(1) The recommendation would be for Hershey to support and invest in Fairtrade certified cocoa organizations, which encourage long-term business relationships with cocoa farmers by ensuring higher wages and proper resources to produce long-term quality products. (6) By aligning and buying their supplies from Fairtrade certified farmers, the company would be strengthening their business relationship and investing in the most crucial ingredient for the company’s products, cocoa. Without this ingredient, the company would no longer have a functioning chocolate confectionery business. The resources and funding would go towards “investing in replacing old cocoa trees to increase productivity, investing in better facilities for crop collection, storage, transport, and processing - business or organization development, and to support improvements in production and processing” (Goodyear, n.d.). (2) The investment would sustain future growth of cocoa farmers and supply the essential ingredient needed to make chocolate.
With recommendations in place to ensure a strong supply of cocoa, The Hershey Company can focus on meeting new and existing demand. (5 and 6) The rising demand for chocolate by the urban population in China is expected to grow by 60 percent from over the next five years (Reuters, 2015). Given the surging demand for chocolate in China, I recommend that Hershey continue to invest resources into expanding their operations to grow their sales in China. (3 and 4) While Hershey dominates the confectionary industry in the U.S. with a market share of 44.2 percent, Hershey is only the 6th largest internationally (Kahn, 2013). Hershey should utilize its resources and financial advantages from its strong U.S. operation to invest in advertising in China. Additionally, Hershey should maintain their strategic plan for global market success, which is to “produce high-quality products tailored to local taste preferences and to meet rapidly growing demand” (DailyFinance, 2013). These actions combines should help strengthen Hershey’s position in the Chinese marketplace.
(5 and 6) Additionally, I recommend that Hershey continue with their current process of slowly increasing their prices as the costs of production rise. With chocolate representing a small share of most consumers’ budgets, the inelastic demand allows the pricing increase to generate additional revenue. If the demand of chocolate were to become more elastic as time passes, then Hershey may want to adjust its pricing strategy to avoid experiencing a decline in revenue from raising prices.
References
Goodyear, D. (n.d.). The future of chocolate: why cocoa production is at risk | Sustainable Business - Fairtrade partner zone | The Guardian. Retrieved from http://www.theguardian.com/sustainable-business/fairtrade-partner-zone/chocolate-cocoa-production-risk
Kahn, L. (2013, November 1). Why So Little Candy Variety? Blame the Chocolate Oligopoly | TIME.com. Retrieved from http://ideas.time.com/2013/11/01/why-so-little-candy-variety-blame-the-chocolate-oligopoly/
Hershey Building State-of-the-Art Confectionery Plant in Malaysia to Serve Asia Region - DailyFinance. (2013, October 3). Retrieved from http://www.dailyfinance.com/2013/10/03/hershey-building-state-of-the-art-confectionery-pl/
Comments
Post a Comment