Bitter Competition: The Holland Sweetener Company versus NutraSweet - Essay Example

As an outcome of the expiration of aspartame’s patent in 1987, it should be expected that NutraSweet is already contemplating the likelihood of more intense rivalry in its market. Being the first in the market to offer aspartame, NutraSweet will be able to form and execute strategic responses to the entry of competitors. The following list shows the anticipated response of NutraSweet:

The company might also use its strong brand equity to combat threats of competition.  

1. Further, strengthen strategic alliances with partners.

Even though it gained a name in the consumer market, NutraSweet’s revenue still largely comes from other business organizations like Coke and Pepsi. In response to the entry of competitors, the company is expected to further forge stronger partnerships with them by giving them special discounts or by decreasing its prices outright.

2. Price more competitively.

With more competition, NutraSweet might also opt to lower the prices of its aspartame both in the consumer and industrial market.

            With the aforementioned discussion, a price war is more likely to happen between NutraSweet and Holland Sweetener Company (HSC). In competing in the market, HSC will capitalize on its production efficiency which will enable it to price more competitively. In fact, what HSC really desires is a lower price level of aspartame in the market. With this move, it is expected that NutraSweet will respond competitively by lowering its prices, especially in the industrial sector. However, in the consumer segment, NutraSweet will maintain its prices and further differentiate its products from the offering of other industry entrants.