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