iscussion forum #10 - reorienting to new markets / circumstances

timer Asked: Nov 8th, 2015

Question description

create one example of real-world examples - you could use new circumstances instead of "markets" but it is interesting to consider what "markets" are developing that may not be just a product - perhaps a service?

here is one of students example but you can do it shorter than this 

Phase 5: Spillovers to task environment and strategic reorientation

Geels and Penna say: “Sustainability issues can spill over to the economic task environment when public debates and discourses lead to changes in consumer preferences or when policy makers introduce tough policies (taxes, incentives, legislation) that change the economic frame conditions. Industry actors are then likely to change their economic positioning strategy. ‘Green’ innovations may become part of core beliefs, mission and business models.”

In the United States, we are not in an environment where we must reorient to new markets, or change the practices we currently have around GMO labeling, because there is no policy framework in place (though there have been some proposed) that forces the food industry to start labeling! There is some economic impact because of subgroup consumer preferences for third party, optional “Non GMO” labeling, but there is no major economic or reorientation impact because this is not a mandated label. Additionally, it does not seem like a large enough group of consumers is shopping based on Non-GMO labeling to affect major food industry behavior.

I posit that if the food industry capitulates and actually is forced to go through with the labeling (due to the current law set to go into effect in Vermont) this might be a turning point to launch the country into phase 5—where agribusiness and food companies have to contend with labeling measures on at least a state level, if not a national one. Additionally, two other states besides Vermont have passed laws that they will adopt GMO labeling laws if surrounding states do it first! This speaks to the idea that some states would be willing to get on board if the national landscape shifted in that direction.

Presumably, reorienting to a new market would be an involved process, affecting the food industry and marketers as well as consumers. Below, I have listed some information about the GMO-labeling law (passed in 1997 and reevaluated in 2004) in the European Union, and how the regulations played out in that setting. There was clearly a defined reorientation process after both GMO laws were passed in the EU.

European laws:

The link includes an explanation that details the process of GMO labeling in Europe, about how member states must enforce labeling requirements, but there is oversight related to these labeling requirements: “Who is enforcing these labeling requirements? As is the case with other food laws and regulations, this falls under state jurisdiction and is carried out by official food surveillance organisations. All Member States have labs specially equipped for this purpose. These labs abide by officially recognised, standardised practices.” 

The 2004 model changed significantly, because it did not just test for GMOs in the end product, but all food and food products had to be labeled for GMOs if it included GMO products at any point in the process—no matter if it is detectable or not in the end product. But, it took some time to institute this system, and there were certainly reorientation strategies and struggles. As of 2005, the website stated, “The entire food industry is now obligated to create a system of traceability, but whether or not a dependable system is successfully put in place still remains to be seen. A few problems still need to be resolved, especially when it comes to foreign trade.”

Finally, as this link shows, there have been various different methods of exercising controls on member states, and lots of changes about how to regulate and label GMOs post-implementation in Europe. This is interesting because I believe the U.S. would also have to rely on states to carry out this labeling to some extent, even if it was a national law.

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