Monsanto - Presentation

Monsanto’s pyramid of purposes Pledge: “Growth for a better world” =>“ensure that agriculture can meet humanity’s needs in the future” 1) Aims: We develop “modern agricultural practices and crops” 1) in order to increase productivity => Increasing yields, fewer input of energy & pesticide Objectives: 1) We create genetically modified plant material 2) We develop agricultural chemicals such as manure or pesticides Our products are marketed through farmers, mostly in North America “Germany is one of the top 5 importers of U.S. soybeans, and therefore a market that cannot be ignored” 2) => We need to introduce our products to the European market. 1) www.monsato.com/who_we_are/our_pledge.asf 2)Greenpeace campaigns against altered soybeans, Journal of Commerce, November 7th, 1996

A very American company 2007 Fiscal Year Sales By Geographic Region by %

Monsanto’s Stakeholders Environment and Society Suppliers

Politics

Stockholders

Monsanto Corporation Saint Louis, MO Employees: 18,800 worldwide

Religion

Customers

Cooperation with BASF: R&D, marketing

Environment Monsanto Europe European Gouvernments

Far environment

Greenpeace Near environment

Media

Suppliers Stockholders

Ethical values

US & EU farmers Seed manufacturers

Internal environment

Employees Corporate culture Managers

eg. Pioneer Hybrid International (no 2) Syngenta (no 3)

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

Farmers

Food traders

Monsanto Corp. GM Seeds

Farmers

Consumers

“Ideal Progress”

Food traders

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

Bargaining power of customers Bargaining power of suppliers

Industry structure

Threat of substitute products/services

• 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:



Monsanto: Informing = convincing

fear of allergy effect on genome potential monopoles

GM or no GM?

Influence of Opponents 

The press



The World According to Monsanto



Accusations:



Europe‘s demand

Manipulation Lawsuit (PCB) Bribery in Indonesia

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

The development  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

Porter’s Five Forces: Industry structure Threat of new entrants

Industry structure Bargaining power of suppliers

• 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

Threat of substitute products/services

Bargaining power of customers