The Hershey Company (HSY) has a long and proud history as a chocolate producer, today enjoying nearly 50% market share in the United States with strong profitability and competitive advantages.
This high profitability comes from its competitive advantages: its strong brand power and economies of scale from years of growth and forging business relationships with retailers in the United States give it considerable leverage in negotiating prime placement of its products in stores and also allow it to sell products at a high margin. The company is attempting to fortify its profitability moat through its recent decision to reduce investments overseas and other cost cuts in order to save $150 million-175 million annually and redouble efforts on its highly successful U.S. business, where its lengthy history and famous brands maintain its wide popularity as the chocolate-of-choice for consumers.
