Aspartame and Holland Sweetener Co.

27-Feb Bitter Competition The Holland claw Co. vs. NutraSweet (A) (HBS 9-794-079) 1. How should Vermijs expect NutraSweet to respond to the Holland Sweetener Companys entry into the European and Canadian aspartame markets? autonomic nervous system 1. NutraSweet had a very high Cost of Goods Sold in producing the Aspartame. So it was not a wise move for NutraSweet goes for Price war with Holland Sweetener Company, which baron possibly results in a negative gain on the product. . Even though value war is not expected, NutraSweet possibly might use his advantage as the first one introducing the market to restrain dominated the market. NutraSweet might also increase its advertisement expense to re-introduce and redirect consumers interest back to NutraSweet. 3. In response to Hollands fulfil against the company NutraSweet might probably try their best to fight against it, since they valued to continuously dominate the spongy drink industry.However, even though NutraSweet survey to defend its anti-competitive, if Holland Sweetener Company or other sweeteners offered a earlier better price, similar quality, and comparable distribution offer, in a yearn run, the drink industry might go to the use of multi-sweetener to lower the suppliers defy power and to follow governments suggestion. 4. Since the market shares for NutraSweet will declination with the entry of Holland Sweetener and other Sweetener companies, NutraSweet may expect a sales decrease. Thus, NutraSweet will continue to improve their operation to make it more(prenominal) than profitable. . Specifically, how should Vermijs assess the relative likelihood of the two scenariosprice war and recipe competitionhe has in mind? Price war Anw Vermijs base use game theory to assess the relative likelihood (N -0. 7, H-0. 3) Holland autograph the Market Normal (N 0. 6, H 0. 4) Nutra Holland did not attain the Market (Nutra 1, Holland 0) When Vermijs calculate about the likelihood of the two scenario s, he needs to stand in NutraSweets shoes to think what Holland will do. If Holland did not enter the market, whence Holland will get nothing.But if Holland enter the Market, theres 50% meet Holland will get some revenue. So Holland will enter the market. When Holland enter the market, Nutra had price war, then they both lost revenue, but if Nutra just commonly compete with Holland, then at least Nutra still have corroborative revenue gain. So Nutra will not start a price war. 3 Other Notes NutraSweet once reached 711 million for Aspartame business from 1965 to 1987 (patents expiration in European and Canadian market) 1986, Holland Sweetener Company prepare to enter this market.NutraSweets decision Normal competition & Price war. NutraSweet has limited production capacity, which hinders the maturement of sales and limited their profit so either NutraSweet increase more capacity to expand their market shares, or after the expiration of exclusivity, let other company get in. Exte nsive advertising led to wide-eyed use of Aspartame by food/beverage manufacturer. Huge price cut first to raise awareness and then put its foot onto soft drink and powdered drink industry.