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The presentation: Monsanto coming to Europe is a failed mission. Not only that most GMOs are not allowed in Europe, most of the farmers don't even grow the one that are.An analysis of misunderstandings.
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Monsanto’s pyramid of purposes
“Germany is one of the top 5 importers of U.S. soybeans, and therefore a market that cannotbe ignored” 2) => We need to introduce our products to the European market.
Objectives: 1) We create genetically modified plant material2) We develop agricultural chemicals such as manure or pesticidesOur products are marketed through farmers, mostly in North America
Aims: We develop “modern agricultural practices andcrops” 1) in order to increase productivity=> Increasing yields, fewer input of energy & pesticide
Pledge: “Growth for a better world”=>“ensure that agriculture can meet
humanity’s needs in the future” 1)
1) www.monsato.com/who_we_are/our_pledge.asf2)Greenpeace campaigns against altered soybeans, Journal of Commerce, November 7th, 1996
A very American company
2007 Fiscal Year Sales By Geographic Region by %
Customers
Cooperation with BASF: R&D, marketing
Employees:18,800 worldwide
Stockholders
Suppliers
Monsanto’s Stakeholders
Monsanto CorporationSaint Louis, MO
Environment and Society
Politics
Religion
Environment Monsanto Europe
Near environment
Far environment
Suppliers US & EU farmers
Gouvernments Greenpeace
Stockholders Seedmanufacturers
Ethicalvalues
Internal environment
Managers
EmployeesCorporate culture
Media
European
Syngenta (no 3)
eg. Pioneer Hybrid International (no 2)
Customer Relations
Important Distinction: Customers vs Consumers
– little immediate end-consumer relation (exceptions: RoundUp! herbicide)
– no immediate end-consumer relation concerning GMO foods
Direct and Indirect Relations towards European Customers
– Targeting the market directly and indirectly
Targeting the EU directly & indirectly
Monsanto Corp.GM Seeds
Farmers
Farmers
Foodtraders
Foodtraders
Consumers
“Ideal Progress”
Power of EU-Farmers as a Stakeholder group
Customers belong to company’s „near environment“ relatively homogenous group of customers Financial Power: generally not reliably high
– alternating high-yield and low-yield harvests– individual farmers do not work with either exorbitant turnovers nor profits
low individual bargaining power– scattered into many small and disparate parcels among Europe (in contrast
to the big agroindustry of the US-Midwest)– no functioning Europe-wide cooperative (due also to national economic
rivalries)– Example: German milk price bargains of 2008
Porter’s Five Forces:Bargaining power of customers
Threat of new entrants
Threat of substitute products/services
Bargaining power of suppliers
Industry structure
Bargaining power of customers
• purchase in huge volumes: rather not (there are many farmers)• easy to buy alternatives from others: no
(RoundUp)• financial power: rather low (might need debit for buying from Monsanto)• could make the product themselves: no
Customer’s Attitude
cultural heterogeneity (e.g. UK vs. continental Europe)
rising concern in European societies led to a changing customer attitude
thus, customers were not causative for the problems Monsanto encountered in the European market
Society
More pessimistic concerning green biotech
High priority: consumer‘s benefit
Food safety: fear of allergyeffect on genome potential monopoles
Monsanto: Informing = convincing
GM or no GM?
Influence of Opponents
The press
The World According to Monsanto
Accusations: ManipulationLawsuit (PCB)Bribery in Indonesia
Europe‘s demand
Greenpeace, FOE
Environmentalists
Open dialog: failure
Eco-warriors
Monsanto and Greenpeace
Society optimism
Regulatory process EU
Application to the European Commission European Food Safety Authority (EFSA)
studies on health and ecological issues recommendation to the European parliament more than two thirds of the member states can
reject the admission If quorum not reached European Commission
decides member states can oppose in exceptional cases
The situation
three powerful influents here: the public opinion, industry and farmers.
Communication channels:media and lobbyism(NGOs such as Greenpeace, industry and farmer representatives and trade associations)
no other breeding method is regulated labeling of GMO products includes today even totally Gene-free products
First weak regulation, positive politicians, soy bean allowed in 1996
pressure by the NGOs, shift in public opinion.
lack of communication of independent scientists but also few lobbying of Monsanto and the biotechnology industry
The development
Porter’s Five Forces:Industry structure
Threat of new entrants
Threat of substitute products/services
Bargaining power of suppliers
Bargaining power of customers
Industry structure • competitors: few, market leader 30 % →
oligopole• market growth: stable• industry size: 49.3 % of Germany used for
agricultural issues• similarity of products: low• level of fixed costs/exit barriers: low, R&D
exists, just line extension• range of products/services: small