Analysis of the biotechnological market of Russia to find a market entry strategy for BASF Plant Science

Table of Contents

1 Introduction

2 Basic information
2.1 Biotechnology
2.2 The company BASF
2.2.1 BASF and plant biotechnology
2.2.2 BASF Plant Science

3 Russia
3.1 Key data
3.2 Historical background
3.3 Characterization according to Geert Hofstede
3.4 Russia’s plant biotechnology market

4 Market entry strategy
4.1 Chances
4.2 Risks

5 Recommendation

Quellenverzeichnis

1 Introduction

BASF, the biggest chemical company in the world is now innovating and concentrating on one of their key fields: plant biotechnology. This composition is going to analyse whether the Russian market, especially the biotechnological market of Russia is compatible to the high agenda of BASF. Chances and Risks should complete the view of Russia as a potential market for the plant biotechnology branch of BASF and its subsidiary BASF Plant Science.

2 Basic information

2.1 Biotechnology

The term biotechnology collects a huge number of processes, products and methodologies. According to the definition from the Organisation for Economic Cooperation and Development (OECD), biotechnology is “the application of science and technology to living organisms, as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge, goods and services”.^[1] Additionally the OECD combines this definition with a list-based one, which explains biotechnological techniques.

In other words: biotechnology is not limited to a single area. “Biotechnologists conduct research into large and small organisms, plants, animals and humans, but also into the very smallest components, such as individual cells or molecules.”^[2] As a branch of science, biotechnology was used and integrated for hundreds of years in people’s daily life, for example in the production of beer, wine and bread. “Modern biotechnology - as it is applied today - is characterised most of all by the targeted utilisation of the methods of molecular biology.”^[3] The actual basis for this branch of science was first laid down in the 18th and 19th Centuries as the knowledge surrounding microbiology began to grow, e.g. with the discovery of the first enzymes as biocatalysts, or of bacteria as producers of substances.

Biotechnology is part of the cross-sectional technologies. Today it’s multitalented. With the help of biotechnology, scientists are able to develop new medicines, breed new varieties of crops, or make the manufacturing of everyday products such as detergents and cosmetics more efficient. “To distinguish different application areas, a colour code has emerged: red, green and white biotechnology, which refers to the areas of medicine (red), agriculture (green) and industry (white).”^[4]

2.2 The company BASF

BASF, as the world’s leading chemical company, employs about 97,000 people, holds six Verbund sites and close to 330 production sites worldwide.

2008, BASF posted sales of € 62.3 billion. “We help our customers to be more successful through intelligent system solutions and high-quality products.”^[5] In the same year, BASF restructured their segment. From that point on the company had a better overview about similar products, customers and productions processes. Another advantage of the reorganisation is that “investors are better able to assess BASF” and [BASF] can align [its] portfolio with the acquisitions, divestitures and restructuring of the past years.”^[6]

Chemicals, Plastics, Performance Products, Functional Solutions, Agricultural Solutions and Oil&Gas are the six segments that were aggregated in 2008 from the operating divisions. The divisions make the grade not only for the operational responsibility but also to manage 61 global and regional business units. “Our regional divisions [Europe, North America, Asia Pacific and South America, Africa and Middle East] contribute to the local development of BASF’s business and help to exploit market potential.” They also have to optimize the regional infrastructure.

[...]

^[1] o.V. (o.J.): http://www.biotechnologie.de/bio/generator/Navigation/Deutsch/daten-und-fakten,did=24666.html (01.02.2010).

^[2] o.V. (o.J.): http://www.biotechnologie.de/BIO/Navigation/EN/Background/basics.html (01.02.2010).

^[3] o.V. (o.J.): http://www.oecd.org/document/42/0,3343,en_2649_34537_ 1933994_1_1_1_37437,00.html (01.02.2010).

^[4] o.V. (o.J.): http://www.biotechnologie.de/BIO/Navigation/EN/Background/basics.html (03.01.2010).

^[5] o.V. (2010): http://www.basf.com/group/corporate/de/about-basf/profile/index (01.02.2010).

^[6] o.V. (2010): http://www.basf.com/group/corporate/en/about-basf/profile/structure-organization (01.02.2010).