Professor Sethi Anju
11/04/10
NUTRASTWEET IN CHINA CASE
By: Andres Jimenez (Session1)
Raymond Nicolai (Session 3)
Fernando Medina (Session 1)
To come up with a decision to the whether enter the Greater China Market or not we decided to approach the case with a SWOT analysis.
Strengths
NutraSweet is an artificial sweetener that is one of the most recognized brand names in the United States and in the world. NutraSweet’s earnings per share is $ 6.36 and with huge capitalization and investments in diverse products. Stacey has the approved budget of $ 500,000 to market NutraSweet in China. NutraSweet has the flexibility on how to position their product in terms of functionality, or either as sugar substitute or health
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There are only very few foreign agents that operate in China. Sugar use and consumption levels differed among 3 key markets –Shanghai, Guangzhou, and Beijing. Arthur Andersen survey in China showed that most joint ventures from food and drink were not profitable. Most MNCs in China are unprofitable despite substantial growth. Majority of the Chinese are considered “flat-bellied” and don’t see the need for a diet regimen. The Chinese culture also dictates that they are not that concerned with their teeth, hence they don’t have that fear of tooth decay.
The company should enter the Greater China market as a niche product for consumers with a medical need.
The company cannot delay its entry in the China market, especially with factors such as an average of 10% economic growth, a quickly emerging middle class, and a high possibility in consumers’ increase purchasing power. Postponement of entry may mean higher costs in the future and although the company will not immediately profit from the venture, research showed that companies who entered the market 5 to 10 years ago were doing best. The knowledge gained from market entry will allow NutraSweet to sharpen its future strategies.
Pros
The successful experience in establishing medical awareness in Hong Kong may be applied to the Greater China Market. Entering the Greater China market through the three key cities will provide a better knowledge of the overall Chinese market. A natural market consisting of diabetics and
The SWOT analysis is a simple way of generating strategic marketing alternatives from a situation analysis. Another type of popular analysis is a PEST analysis, which involves Political, Economic or Environmental, Social, and Technological or Transportation analysis. An industry analysis can be performed using a framework developed by Michael Porter known as Porter's five forces. This framework evaluates entry barriers, suppliers, customers, substitute products, and industry rivalry.
High cost of entering new markets International growth is expensive. Entering new markets with a new brand
Next, SWOT analysis has included in this report because it can help the company planning and make a good decision. The SWOT analysis had been written in the appendix. In The stakeholders, it included suppliers, government, shareholders, pressure group, media and customers. In the appendix, the
China is the world’s most populated country with the population of 1.3 billion people. Since there were so many people in China they had to think about a way to control population so this is where the one-child policy was made. It officially restricts married, urban couples to having only one child, while allowing exemptions for several cases, including twins. This policy was introduced in 1978 and initially applied to first-born children from 1979. The policy is enforced at the local level through fines that are imposed based on the income of the family and other factors.
Supply-side economies of scale: NutraSweet already was a dominant player by obtaining the process manufacturing technology from Ajinomoto, a Japanese based firm to manufacture aspartame and also gain exclusive access to Japanese aspartame market. NutraSweet have invested heavily in the business, which challenges the new entrant, as they too have to start it on a large scale.
In 1986, rivals presented a limited risk to the company due to NutraSweet’s monopolistic position in the production of aspartame. However, the development and subsequent introduction of alternative low-cal high intensity sweeteners, combined with the trend of blending, presented a major risk for NutraSweet’s product. Also, as the patents for aspartame expire in the different regions NutraSweet will face competition from alternative producers of aspartame as well.
Nongovernmental organizations play a vital role in helping to educate, prevent and also treat Type II Diabetes. On a national level, The National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) is the Government’s lead agency for diabetes research. The NIDDK functions three Information Clearinghouses of prospective awareness to people seeking diabetes information and three education programs on diabetes, and other health burdens such as kidney disease, and weight control. The mission statement for the NIDDK is to advance the treatment and the end results for people with diabetes, encourage screenings for early diagnosis, and prevent or delay the onset of Type II diabetes (National Institutes of Health). On a global level, the
- When the NutraSweet entered the market they followed the strategy of Price War. In order to get the significant market share of sweeteners the company offered up to
To evaluate the way Levendary Café has entered to China, I would like to use “SWOT” analysis to figure out how it is doing.
The long history of Yunnan Baiyao’s brand is facing the inevitable maturity of the product lifecycle. As the majority of the company’s revenue is generated through the domestic market the urgency for product diversification is needed to source out new growth opportunities amidst
They are facing difficulty in logistics and procurement restricted to imports from Taiwan. Sometimes, they are also have marketing budget of their products during their promotion.
The SWOT analysis is business analysis method that business can use for each of its department when deciding on the most perfect way to increase their business and future growth. This procedure identifies the internal and external strengths, weaknesses, opportunities and threats that are in the markets.
Foreign”. There is an “internal war” in China between what’s traditional (linked to the ancient Chinese culture) and what’s modern (usually linked to western products). Even though there is a general admiration for western culture, Chinese people are very proud of their own culture one as well. In some cases, older generations even get scared by the fanaticism from the younger ones, and they directly reject western products. Actually, there’s already been many complains against Starbucks trying to westernize China when, for example, when they inaugurated a shop inside the Forbidden City in Beijing.
SWOT Analysis: A SWOT analysis is commonly used in marketing and business in general as a method of identifying opposition for a new venture or strategy. Short for Strengths, Weaknesses, Opportunities and Threats that may affect any new proposed actions. Here we represent our proposed venture’s SWOT analysis report.
SWOT analysis is a useful tool for understanding and decision-making for all sorts of situations in business and organization. SWOT analysis can be classified into internal and external factors affecting a company. The Strengths and Weaknesses of the SWOT analysis represent the internal factors that influence the viability of the company. While the Opportunities and Threats, on the other hand, are the external factors that may affect the company's performances. A SWOT analysis provides more understanding of the organization in relation to its internal and external environment so that manager can formulate better strategy in pursuit of its mission.