"As the Holland Sweetener Company, how do you expect NutraSweet to respond to your enteringthe European and Canadian markets? Is it more likely to be an accommodating response (normalcompetition) or aggressive response (price war)? In considering your response, you should listboth the reasons for NutraSweet to adopt an accommodating response (normal competition)AND an aggressive response (price war).SolutionThe market for the sweetener is not a highly competitive market. The reason for this is that apartfrom NutraSweet and HSC, there are no other major players in the current market scenario.Searle which is the parent company of NutraSweet had gone on to develop patents for aspartameas a food and beverage additive. The company had got its patents extended for the US marketsbut still the patents for the European and the Canadian markets were going to get expired. So itwas a huge opportunity for HSC to make an entry into this market where NutraSweet haddeveloped a monopoly of its own. The product that was produced by NutraSweet had its usage inmany food and beverage products like the food items and the cold drinks which was a highlycompetitive market in itself. This market was dominated by two players majorly – Coca Cola andPepsi, who were giving tough competition to each other. However still both of these companieswere using NutraSweet in their diet beverage forms, as they did not have another option. So thecompany Searle had become a very profitable entity with a tremendous market share and almosta monopoly in the Canadian and the European markets. So now when the markets were opening up, the company can be expected to not let go of itsmarket share to the competitors in an easy way. It would fight tough with its competitors in everyaspect. The reason would be that the company already has its manufacturing and distributionchannels in place, and also the customers who have been using the product have gotten used totheir quality. So it would not be easy for any competitor to come and disperse the brand from themarket so easily. The company doesn’t have any need to engage itself in a price war with itscompetitors in any form and can go ahead with a normal competition method. The company cango ahead and directly attack its competitors on the quality front itself. It can easily convey amessage to its audience and the end users that it has got a better product in place, and the trustfactor associated with their brand would be much more than that with HSC in the first place.Hence the target segment would not be ready to accept HSC as the major player in the industryin the beginning itself. So the accommodating strategy would work fine for Nutrasweet in theinitial phase of the HSC launch. Also HSC doesn’t have the backing of being a local company inthe Canadian market; this is something that can work in favor of Nutrasweet in the initial stagesas well. Initially also if Nutrasweet engages in a price war with HSC, it would be providingunwarranted credibility to the HSC product in the market. As the consumers would feel thatNutrasweet fears its competition and hence is trying to get into a price war with HSC. Also theconsumers might end up feeling that the rival brand is good enough to compete with an old and atrusted brand like Nutrasweet and might want to give it a shot as a result of this. This would leadto aunnecessary situation on the front of the Nutrasweet, where in the company itself would endup promoting the rival brand like HSC. This is absolutely not what Nutrasweet would want to do.The company can go for a pricing war and cut rates and not allow any of its competitors to settlein the market from the beginning itself. This would prove to be the best and the most fruitfulstrategy for the company. If the company ends up making losses in the process, then so be it. Buthowever, if the company can eliminate one or two or all of its competitors from the market inthis process, it would turn out to be very beneficial to the company in the long run. So thecompany would want to implement this strategy of going head on and competing with thecompetition before they are able to settle in the market and influence the customers.However over a period of time, if HSC ends up in establishing itself as a capable brand in themarket and the consumers are ready to accept it, then in that case Nutrasweet would have to getinto a pricing war with HSC as they would then be dealing with a competitor which has "