Holland Sweetener Case Analysis

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Summary
The Holland Sweetener Company versus NutraSweet is company’s competing in the aspartame industry. Aspartame, a low-calorie high intensity sweetener, can be used as a substitute for sugar because it is sweeter and does not cause tooth decay, but has been found to cause other health hazards. My analysis will describe the aspartame market and the strategies of the Holland Sweetener Company to enter into the European and Canadian markets. One key player and dominance of the market is acquired by NutraSweet, but when there patent is up in Europe and Canada, Holland Sweetener would move swiftly into the market. The analysis answers the question of what Winfred Vermis, the president of HSC, should expect from the powerful competitors NutraSweet? Will NutraSweet respond to the Holland Sweetener Company with price wars or normal competition once they realized that they are trying to be the main supplier in Europe and Canada?

The Formation of the Holland Sweetener Company
In 1935, Tosoh Corporation of Japan had begun business as a producer of soda and caustic soda and Dutch State Mines of the Netherlands (DSM), which was a Dutch-based multinational life sciences and material sciences company, when into business to form the Holland Sweetener Company (HSC). The company was formed for the purposes of a joint venture between Tosoh and DSM in 1985, to enter the European and Canadian aspartame market once the NutraSweet group, separate operating division of Searle and major competitor, patent expired in 1987. Both parent’s brought forth the knowledge and expertise that they felt would help the joint venture be a success; Tosoh contributed a patented process for manufacturing aspartame and DSM provided knowledge of the ...

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...has already been assumed to be pursued by the $17 million loan they received from the European Investment Bank to use toward the 500-tonne aspartame plant project. HSC should entertain a normal competition instead of a price war in order to really learn the industry before going directly against NutraSweet’s in a price war. The more strategic move of HSC is to not directly compete against NutraSweet in a price war because in my opinion, NutraSweet is the expert and HSC is the amateur in the respect of HSC has a lot to learn before it could try to go to war with NutraSweet. Overall, I feel that if HSC would try to directly compete with NutraSweet in a worldwide market and not just in Europe and Canada that they will lose because NutraSweet already has developed brand loyalty and the company ventures off into other forms of capital like signing with Coke and Pepsi.

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