Nutrasweet

Nutrasweet - School of Business Spring 2010: BADM 197...

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School of Business Spring 2010: BADM 197 Strategic Management HBS Case: Bitter Competition: The Holland Sweetener Company versus Nutrasweet (A) Michael Samuels 3/11/10 Fowler As an external consultant to Winfried Vermijs, President of HSC, hired to provide a report on alternative scenarios on their planned entry into the aspartame market in Europe and Canada, answer the following questions for Management’s consideration. Please base your answers to the questions solely on the facts presented in the case. 1. Nutrasweet used three different strategies when entering foreign markets and establishing it dominance over the sweetener industry. During its patent protection Nutrasweet entered the European markets through direct exporting via multi year contracts. Nutrasweet, after receiving word of aspartame approval by the FDA, Nutrasweet engaged in what they called “branded ingredient” strategy. They formed these contracts with both Coca Cola and Pepsi, who eventually made their diet drinks 100% aspartame. Their focus in Europe secured them brand imagery as upwards of 98% of the public could identify their brand. This gives them leverage in the future when patents no longer exist, and competition is free. They furthered this with extensive advertising strategy to secure immediate success in the market. Using joint ventures to enter the Canadian market made sense for Nutrasweet as the case spells out were an easy target. This is due to the proximity of Canada and the familiarity of the market compared to Europe. A huge disadvantage to JV is inability to realize scale economies, but entering into a relationship with a familiar market like Canada, reduces these risks. 2.
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Nutrasweet - School of Business Spring 2010: BADM 197...

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