Business Analysis Essay, Research Paper
Calgene was founded in 1980 in Davis, California. They believed that genetic engineering could be applied successfully into the worlds Agricultural Business. In 1983 Roger Salquist joined Calgene as vice president of marketing. He helped shaped Calgenes Future direction by making product development responsible to research rather than to marketing, allowing science to drive the products. Calgene made three genetically engineered products. Before Calgenes first product, FLAVR SAVR, tomatoes we picked green and sprayed with ethylene gas to speed up the ripening process, where as with FLAVR SAVR the tomatoes could be left on the vine longer for ripening. This aided in the shipping process of tomatoes, regular tomatoes produce an enzyme (PG) causing the tomato to soften as it ripened, FLAVR SAVR would stop the enzyme release to make the tomato more reliable while shipping. Its second product was a gene altered cotton product that would be resistant to the herbicide bromoxynil. This cotton would be less prone to abnormalities, and be resistant to herbicides. Its 3rd product rapeseed, was genetically engineered to produce canola oil that contains laureate. Which would be used in shampoos, and detergents. In Addition the canola oil produced would be used in Mobil Oils biodegradable lubricants. . In 1992 Calgenes primary corporate partners were Campbell Soup Company, Rhone-Poulanc Agrochemie, Proctor and Gamble, Nippon Steel, and Mobil Oil.
Congress played a big role in agribusiness and biotechnology policy, and Calgene was attentive to its relations with congress. Salquist met with members of congress to help assure them that Calgene had a reputation for responsibility in its genetically altered products. Media also played a big role in shaping the environment of agricultural technology. Calgene s objective was to have an informed national press. Salquist had a policy of returning every phone call that reporters made. Journalist would call him up, for information in biotechnology as well as additional information. Having a relationship with the media also had some unexpected advantages. Salquist was notified of a protest that was going to happen, to deter the use of genetically altered products by activists, from a reporter. The activists concern was to raise public awareness of biotechnology and prevent the products to go on the market, at the same time activists were attempting to spread fear on the part of consumers, who were already weary of genetic engineering. Jerry Rifken, a man who opposed biotechnology, and his Center for Economic Trends, who also disapproved of biotechnology, went another route. He directed his campaign against the customers for agricultural biotechnology products. He went after Campbell Soup Company, one of Calgene s partners. He said he would lead a national boycott against the company if the did not halt its relationship with Calgene. At the end of 1992, Cambell Soup company ended its contract with Calgene.
The company responded to its environment Strategically. In 1986 Calgene decided to build vertically integrated operating businesses. This strategy provided access to agricultural input markets where Calgene would sell the genetically altered seeds. Calgenes non-market strategy was intended to clear the path for its products with the public, and to help establish Calgenes reputation as a scientific and commercial product leader in biotechnology. The fresh tomato market was $3billion annually. The strategy for FLAVR SAVR had a number of components. FLAVR SAVR made it possible to have premium quality tomatoes marketed under MacGregors Farm Stand brand. Second it would be available year-round. Third, it would be priced 200 percent highr than regular tomatoes. And Fourth, to calm fears about genetically engineered tomatoes and price increases, purchase labeling would be provided about biotechnology and the tomato. Fifth, supply would be made through contracts with growers. Sixth Calgene would work with major customers to assure safety and quality of the tomato. Seventh, Calgene would would work with its customers, to insure safety and quality, to promote confidence in its product. Eighth, and most important, Calgene would test market the tomato before proceeding to a national blowout. Did this strategy work?
Calgene went by the book. They did not go out and try to make something illegal, nor did they make a fuss about the protests. The company complied with aSocial Obligation response. It was not clear if the genes used to make the products, were approved by the FDA. So under FDA regulations a substance that was recognized as safe (GRAS) did not require pre market approval. So the FDA already ruled that FLAVR SAVR was safe and that it was no different than a regular tomato. Secondly if if the approval for the products went to the FDA, the filing process could take weeks to finish, and affect the agricultural biotech industries. Third, the approval of the products is what the activists wanted, and if this is the way to get approved by the FDA and the activists, Calgene would make the effort to do so. Salquist Says We have elected to ask the FDA to formally apply the comprehensive standards off food additive review .because of our misrepresentation of the scope and rigor of FDA review of new food products. This company did not try just barge in the business, they went the right way to get formally approved by the people, by the activists, and by the FDA.