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Case
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Reference no. 9A97G006
Published by: Ivey Publishing
Originally published in: 1997
Version: 2000-04-12

Abstract

Eurograin has a 35 per cent share of the hybrid seed market in the Philippines, up from four per cent just four years ago, but less than the 60 per cent share of Pioneer, a key competitor. At present, Eurograin focuses its resources on product development, contracting sales and distribution to Ayala Agribusiness. The hybrid seed industry is very competitive and there is a race to develop a one-way cross-hybrid seed that would increase yields by 20 per cent. Competing for this new product are Eurograin, Pioneer, Ayala Agribusiness and the government. Eurograin plans to enter the market with its version of the cross-hybrid seed next year, with a goal of 50 per cent market share. However, given the complexities and uncertainties of the external environment, like (1) the current development of laws around Plant Variety Protection, (2) deregulation of the corn market, (3) political unrest in one of the two major corn growing areas in the Philippines, and (4) the conflict of interest posed by Ayala Agribusiness, Eurograin is questioning if and when it should implement the product introduction. Related to this question is whether it should invest substantial funds to undertake its own production, sales and distribution operations rather than rely on Ayala.
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Abstract

Eurograin has a 35 per cent share of the hybrid seed market in the Philippines, up from four per cent just four years ago, but less than the 60 per cent share of Pioneer, a key competitor. At present, Eurograin focuses its resources on product development, contracting sales and distribution to Ayala Agribusiness. The hybrid seed industry is very competitive and there is a race to develop a one-way cross-hybrid seed that would increase yields by 20 per cent. Competing for this new product are Eurograin, Pioneer, Ayala Agribusiness and the government. Eurograin plans to enter the market with its version of the cross-hybrid seed next year, with a goal of 50 per cent market share. However, given the complexities and uncertainties of the external environment, like (1) the current development of laws around Plant Variety Protection, (2) deregulation of the corn market, (3) political unrest in one of the two major corn growing areas in the Philippines, and (4) the conflict of interest posed by Ayala Agribusiness, Eurograin is questioning if and when it should implement the product introduction. Related to this question is whether it should invest substantial funds to undertake its own production, sales and distribution operations rather than rely on Ayala.

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Size:
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