Using Barney's strategy in sugar substitute industry in USA
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3. As HSC, how do you view the latest developments in the US market?
5. What is going on in the tabletop sugar substitute segment?
a. NutraSweet is breaking the peace by going after Sweet 'N Low users. Is this a good move?
Could you please support answers with Barney's book "Gaining and sustaining competitive advantage"
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Steps using the Issues raised in Barney's Book:
STEP 1
Barney's Strategy
From the perspective of HSC the development in the US market is that NS is following a strategy of price competition in its dealings with Coke and Pepsi.
In the table top segment again the strategy of launching SweetMate at a price that is 60% less than the price of Equal indicates that after the expire of its patent NS is following the strategy of price competition. NutraSweet is not breaking peace, earlier it was skimming the market in the last days of patent protection. Now that the patent protection was over, it was consolidating its position in the market.
STEP 2
Barney's Performance
The peformance of NutraSweet from the perspective of HSC was outstanding. In spite of its agreement with Pepsi and Coke, NutraSweet was able to wrest an estimated $294 million market from HSC. In addition, NutraSweet was directly challenging the sales of Sweet 'N Low in the US market.
In the tabletop segment it is difficult to assess the performance in numerical terms, however, the launching of SweetMate at a price 60% lower than that of Equal signals that NutraSweet is again poised to capture market share from Sweet'N Low.
STEP 3
Barney's Evaluating Environmental Threats:
The sudden and clandestine deal of NutraSweet with Coke and Pepsi meant that there was substantial loss of market share to NS. However, the environmental factors that needed to be considered if aspartame would be declared unsafe ...
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