Royal Agricultural College

A chance meeting at the Harvard Business School Agribusiness Seminar the consumer is prepared to pay higher prices for pig meat (or any other product) with value added that may not be immediately evident. In the in 1976 is the backdrop for this case on the alliance of two agro-enterprises. The first, Agroceres, was a Brazilian producer of genetically improved United States, pig producers have launched a campaign advertising their product as “the second white meat”. Will this approach work in Brazil? corn seeds that was seeking to reduce its dependence upon a single product; PIC is a British animal genetics company specializing in the And if so, who should finance the advertising campaign? Amid these challenges is the spectre of competition. The case describes the acquisitions improvement of pigs that wishes to position itself in emerging markets. For both, the alliance a means of achieving corporate objectives. Alliances and fusions taking place among major players in plant and animal genetics. Brazil and its neighbors in the southern cone offer attractive markets. If between enterprises of the northern and southern hemispheres are a means of facilitating technology transfer and access to new markets. In this case, Agroceres-PIC is to retain its advantage as first entrant, it must take measures to reduce costs. J BUSN RES 2000. 50.71–81.  2000 Elsevier a company with experience in plant genetics, Agroceres, becomes a full partner in a program to revolutionize the breeding of pigs on a large Science Inc. All rights reserved. scale while PIC, the Pig Improvement Company, is well situated to tap the great expansion potential of the Latin American market. The case During the welcoming ceremony of the annual agribusidescribes the world pig industry and recent technological improvements in pig breeding that allow superior genetic merit to be transmitted. By ness seminar at the Harvard Business School in January 1976, Mr. Ney Bittencourt, President of the Brazil1995, Agroceres-PIC had been highly successful in the adaptation of these technologies to the Brazilian market and was looking forward to another ian company Sementes Agroceres, S.A. was introduced to Mr. Ken Woolley, managing Director of the Pig Improvement 20 years of growth. However, the Vice-President of Agroceres in charge Company (PIC) of England. Agroceres had been operating in of the Animal Division, Dr. Roberto Butteri, had some concerns about the field of plant genetics since 1945, its main business being the future. These concerns reflected the more general problems and chalin the field of hybrid corn seeds. PIC had been involved in lenges of strategy formulation in the Latin American agro-enterprise. The animal genetics since 1963 and now held the premier market first concern is how to ensure that technology benefits the small and position in the production of crossbred pigs. medium as well as the large producers. The PIC concept, unfortunately, Shortly before this meeting, Mr. Bittencourt had submitted is designed to be used with very large-scale operations. If Agroceres wants a report to his Board of Directors expressing concern about to see the benefits flow to the smaller pig breeders, it must invest in his company’s dependence upon corn seeds, which repretraining programs. A second challenge for a Latin American enterprise sented 80% of total sales. The Board subsequently decided such as Agroceres that enters into an alliance with a multinational firm to explore diversification to other products with which the like PIC is how to maintain strategic flexibility to expand geographically company could apply its technological expertise in genetics. and not be limited by the actions of partners in third countries. In this This was mirrored from the English side where PIC was concase, PIC has been acquired by another multinational whose long-term cerned about being positioned in emerging markets with destrategy in South America is unclear. A third challenge for the Latin veloping potential, amongst which were China, South Korea, American enterprise, which like Agroceres seeks to introduce a differentiand Brazil. Nevertheless, PIC’s international experience indiated product to the market, is consumer education. It is not clear that cated that the key to entering international markets depended upon the identification of a reliable and skillful partner with Address correspondence to D. Zylbersztajn, University of Sao Paulo, School the technological knowledge in genetics, essential for the comof Economics and Business, Av. Professor Luciano Gualerto 908, 05508-900 Sao Paulo SP Brazil. mercial success of the business.