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MBA TC XIX MIM

Management Economy

Solution of:

Case Bitter Competition: The Holland Sweetener Company versus NutraSweet

Group Number: 1

Group Members:

1. Aranda, Carolina

2. Kleimann, Daniel

3. Sánchez, Juan

4. Silva, Eduardo

Professor: José Acha

Date of Submission: July 05, 2015

Bitter Competition: The Holland Sweetener Company versus NutraSweet.

1.    If you were Mr. Vermijs, how would you expect NutraSweet to react to HBC entrance to the European and Canadian markets? What reasons would NutraSweet have to act in this way?

According to the NutraSweet situation, two scenarios could occur depending of count with the support of the European Commission as regard in terms of the claim presented by HSC and Irish Angus Fine Chemicals Company.

If the situation is favorable for NutraSweet the likely scenario would be:

Scenario Nº 01: NutraSweet focus efforts on its 80% of the market (Coca Cola and Pepsi Cola), Sharing the difference of the market (20%) with HSC.

Being that, NutraSweet is established on the market with a big market share, and its trademark is recognized.

If the situation is not favorable for NutraSweet the likely scenario would be:

Scenario Nº 02: NutraSweet begin a “prices war”.

Being that, the financial statements of support that has NutraSweet which has the support offered by Ajinomoto and Monsanto (according to their financial statements). Are superior to and support provided by Tosoh and DSM to HSC. Finally, if HSC decides to enter in this prices war will end up injured.

2.      As Mr. Vermijs, how would you assess the emergence of those scenarios (Price war o competence)?

1. - First Option

 If the Commission decides in favor of NutraSweet. Under this supposition could occur Normal Competence.

1. NutraSweet will set up a plant due to lack of capacity projected until 1991 while both were sent to the US or Japan.
2. To prevail agreements with Coca Cola and Pepsi Cola (80% of its market share).

Then, in this case HSC should

1. Try to explore new markets like (Asia, America).
2. Try to improve its processes to reduce costs in order to be competitive on the remaining market (20 %) Normal competence.

2. - Second Option

 If the Commission decides against of NutraSweet. Under this supposition could occur Prices War

1. Try to enter to the market with lower prices (prices war), could be a dangerous strategy however he HSC need to deal with depreciation of its new European plant ,and its financial backing is less than NutraSweet.

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