Monsanto - presentation

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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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  • This is the presentation of a case study made by a team of students for business class of the Master studies at the trinational Ecole superieure de biotechnologie Strasbourg ESBS, France.
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Monsanto - presentation

  1. 1. 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
  2. 2. A very American company 2007 Fiscal Year Sales By Geographic Region by %
  3. 3. Monsanto’s Stakeholders Environment and Society Stockholders Religion Suppliers Monsanto Corporation Customers Saint Louis, MO Politics Employees: Cooperation with BASF: R&D, marketing 18,800 worldwide
  4. 4. Environment Monsanto Europe Far environment European Gouvernments Greenpeace Near environment Ethical Media Suppliers US & EU values farmers Stockholders Seed manufacturers Internal environment eg. Pioneer Hybrid International (no 2) Employees Syngenta (no 3) Corporate culture Managers
  5. 5. 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
  6. 6. Targeting the EU directly & indirectly Food Farmers traders Monsanto Corp. Farmers GM Seeds Consumers Food “Ideal Progress” traders
  7. 7. 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
  8. 8. Porter’s Five Forces: Bargaining power of customers Threat of new entrants Bargaining power of customers • purchase in huge volumes: rather not (there are Bargaining power Industry structure many farmers) of suppliers • 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 Threat of substitute products/services
  9. 9. 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
  10. 10. Society  More pessimistic concerning green biotech  High priority: consumer‘s benefit  Food safety: fear of allergy effect on genome potential monopoles  Monsanto: Informing = convincing
  11. 11. GM or no GM?
  12. 12. Influence of Opponents  The press  The World According to Monsanto  Accusations: Manipulation Lawsuit (PCB) Bribery in Indonesia  Europe‘s demand
  13. 13. Greenpeace, FOE  Environmentalists  Open dialog: failure  Eco-warriors
  14. 14. Monsanto and Greenpeace
  15. 15. Society optimism
  16. 16. 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
  17. 17. 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
  18. 18. 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
  19. 19. Porter’s Five Forces: Industry structure Threat of new entrants Industry structure • competitors: few, market leader 30 % → oligopole Bargaining power • market growth: stable Bargaining power of suppliers • industry size: 49.3 % of Germany used for of customers 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

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