Global Agribusiness: Strategy and GMO

Abstract

“Grain Majors” developed as the dominant players in the global agribusiness arena in the 1970's, but their real strategies and activities have not been widely known due partly to the complex natureof these entities and partly to significant changes in the global food system including the introductionand rapid expansion of biotechnology in the form of GM products.
This article focuses on three dimensions of these leading grain companies; 1) the evolutions oftraditional grain majors, 2) their current strategies including their stance toward GMOs, and 3) theirpossible future directions. As specific cases, Cargill, ADM, and Bunge are selected, and theirstrategies are explained respectively. Cargill's long-term vision with strong strategic intent, pursuingvalue-added products and services through global supply chain network, and managing worldwide“Cargill” brand, ADM's traditional focuses on processing and particularly recent shifts towards bioenergies, and Bunge's logistics-based expansions and intensive shift of assets to South America arestressed for their evolutions. In addition, each company has established strong ties with genedevelopment companies such as Monsanto and DuPont through either formal or informal alliances. In today's highly competitive market, effective alliances as well as strong product developmentabilities are the key factors of success.From the viewpoint of effective strategy, today's global companies must show strength on threedimensions: 1) “market understanding” including customers and competition, 2) “customer interface”including technology and business system, and 3) “organizational resources”. Cargill appears to bewell balanced along these three dimensions. ADM's most important competencies are processingknow-how (they see even GM grains through the eyes of processing.), but now their strategic focushas shifted to biofuels. Bunge's aggressive investment in Brazil has been based on a deepunderstanding of their local customer's needs, and what and how they could respond to these needs.