1. CURRENT SITUATION

MONSANTO BALANCESWORLDWIDE STAKEHOLDER

INTRODUCTION World’s largest seed company - sales over

$8.6 billion. It specializes in biotechnology, or the

genetic manipulation of organisms. Today: 90% of the world’s genetically

modified seeds - by Monsanto Monsanto also holds a 70% - 100% market

share on certain crops.

A. THE ENVIRONMENT

STATE OF ECONOMY

2003 - the price of Monsanto’s stock had fallen almost 50%, down to $8 a share.

lost $1.7 billion the previous year.

After switching its emphasis from chemicals to food, Monsanto owes its $8.6 billion in sales to biotechnology.

Monsanto owes approximately 60% of its revenue to its work in genetically modified seeds.

More than half of U.S. crops, including most soybeans and 70% of corn are genetically modified.

cotton yield of Indian farmers rose by 50%, doubling their income in one year.

CURRENT TRENDS The emergence of new Monsanto had been covering up decades of

environment pollution.

released toxic waste into a creek in Anniston, Alabama. It had also disposed of polychlorinated biphenyls (PCBs), a highly

toxic chemical, in open pit landfills.

Fish from the creek were deformed, and the population had elevated PCB levels that astounded environmental health experts.

Monsanto leaders had known about the pollution since the 1960s but had not stopped production.

This animosity toward Monsanto’s products is generated by concerns about potential environmental effects. (Current Trend)

Grant focus on genetically modified foods, the company has recovered and is now prospering.

This animosity toward Monsanto’s products is generated by worries about the safety of genetically modified food.

Monsanto became so successful with its genetically modified seeds that it acquired Seminis, Inc., a leader in the fruit and vegetable seed industry. (Global leader in the seed industry)

CURRENT TRENDS (2)

CURRENT POLITICAL VALUES AND TRENDS

To combat “super bugs,” the government requires farmers using Monsanto’s products to create “refuges” in which they plant 20% of their fields with a non genetically modified crop.

The theory is that this allows nonresistant bugs to mate with those that are resistant, preventing a new race of super bugs.

To prevent resistance to the Roundup herbicide, farmers are supposed to vary herbicide use and practice crop rotation.

Many farmers do not take the time to take these preventative measures because Roundup is so easy to use particularly in conjunction with Roundup Ready seeds.

This is of particular concern in Latin America, Africa, and Asia, where farmers may not be as informed of the risks of herbicide and pesticide overuse.

In 2009, the company agreed to offer rebates, up to $12/acre, to farmers in 13 states who use combinations of herbicides on their crops.

The company is taking a proactive stance to show that it cares about preventing resistance; however, this does little to stem what many fear will become a global problem.

LEGISLATION

Patent Issues- Monsanto’s seeds are protected under patent law

and it not allowed to harvest seeds from the plants for use in upcoming seasons.

- By issuing new seeds each year, Monsanto ensures it will secure a profit as well as maintain control over its intellectual property.

- Critics argue that requiring farmers to suddenly purchase new seeds year after year puts an undue financial burden on them and gives Monsanto too much power.

Therefore, the law protects Monsanto’s right to have exclusive control over its creations, and farmers must abide by these laws.

When they are found guilty of using Monsanto seeds from previous seasons, the farmer are often fined.

According to Monsanto, investigators approach the farmers suspected of patent infringement and ask them questions.

The investigators must practice transparency with the farmers and tell them why they are there and who they represent.

BRIBERY ISSUES

In 2002, a senior manager at Monsanto instructed an Indonesia consulting firm to pay a bribe of $50, 000 to a high level official in the country’s environment ministry.

Monsanto was facing opposition from farmers and activists in regard to the introduction of genetically modified cotton in Indonesia.

The company had paid off many officials between 1997 and 2002 because of bribery was not an isolated event.

The company launched an internal investigation and reported the bribery to the U.S. Department of Justice and the Securities and Exchange Commission (SEC).

Monsanto agree to do :- Accepted full responsibility for its

employees’ behavior Pay $1 million to the Department of Justice

and $500,000 to the SEC. Close monitoring of its activities by

American authorities in 3 years.

Terminator seeds have several risks and spurred much controversy among the public.

It includes a concern that these sterile seeds might somehow get transported to other plants, which could create sterile plants that would reduce genetic diversity.

THE FUTURE OF MONSANTO Threat - lingering concerns over the safety and

environmental impact of its products. The company needs to enforce its code of ethics

effectively to avoid organizational misconduct in the future. (Bribery)

It may be facing increased competition from other companies.

The seed company Pioneer Hi-Bred International, Inc., is using pricing strategies and seed sampling to attract price conscious customers.

Lower grain prices may convince farmers to switch from Monsanto to less expensive brands.

OPPORTUNITIES

It under a new innovations that could increased competitive edge as well as provide enormous benefits to farmers worldwide.

In 2009, the company announced that it had finished regulatory submissions for the planet’s first biotech drought-tolerant corn.

This corn could be a major boon to farmers in areas where drought is prevalent.

Monsanto is also working with the African Agriculture Technology Foundation to bring drought resistant technology to Africa (without having them pay royalties).

With the increasing popularity of organic food and staunch criticism from opponents.

Monsanto will need to continue working with stakeholders to promote its technological innovations and to eliminate fears concerning its industry.

B. INDUSTRY ANALYSIS Agribusiness

- an industry engaged in the producing operations of a farm, the manufacture and distribution of farm equipment and supplies, and the processing, storage, and distribution of farm commodities.

Major competitor- Syngenta and Bayer CropScience.

Bargaining power of buyer Customer- farmer High switching cost. Could not make the

product by themselves.

Rivalry among existing competitors few competitors involved

in this industry. Low exist barrier. Stable market growth.

Bargaining power of supplier A number of supplier chemical manufacturers &

medical instruments High switching cost.

Threat of new entrants Barriers to entry

are medium & increasing.

High level of innovation & potential for new technologies in the industry.

The ability of small firms to compete successfully with major players.

Threat of substitute product Low. High value

intellectual property making substitute products difficult to produce.

Porter’s five forces

C. ORGANIZATIONSTRENGTHS

R&D LICENSING PARTNERSHIPS INTELLECTUAL PROPERTY PROTECTION STANDARDS

WEAKNESSES PUBLIC CONTROVERSY LIMITED PRODUCT PORTFOLIO

OPPORTUNITIES THE BIOTECHNOLOGY INDUSTRY IS AN EXTREMELY YOUNG INDSTRY AND THE POTENTIAL FOR GENETIC ENGINEERING APPLICATIONS IS HUGE.

THREATS LEGAL ACTIONS COMPETITORS SOCIAL AND PHYSICAL ENVIRONMENT

D. THE MARKETING STRATEGY

OBJECTIVE : CONTINUE TO GAIN MARKET SHARE GLOBALLY IN THE AGRICULTURE BIOTECH INDUSTRY

TARGET MARKET : FARMERS

COMPETITIVE ADVANTAGE : INSERTION OF TRAITS INTO CROP PLANT GENOMES

4 P’S PRODUCT - CORN FARMING, FERTILIZERS

AND AGRICULTURAL CHEMICALS, PHOSPHATE AND OTHER MINERAL MINING AND PESTICIDE MANUFACTURING

PROMOTION - PUBLIC RELATIONS AND INTERNET MARKETING

PLACE – LICENSING

PRICE - PREMIUM PRICING

2. PROBLEMS & THEIR CORE ELEMENTS

PROBLEMS

Lingering concerns over the safety and environmental impact of Monsanto Products.

Organizational Misconduct Facing increased competition

CONCERNS OVER THE SAFETY AND ENVIRONMENTAL IMPACT

Genetically Modified products could result in negative health consequences bring harms to the environments.

Bovine Growth Hormone It may cause health problems in cows and

in the human who drink their milk.

ORGANIZATIONAL MISCONDUCT

Bribery Issues In the case of the Indonesia, the bribe pay

in order to destroyed the evidence that showed Monsanto was facing opposition from the farmer and people.

It cause Monsanto to compensate $1.5millions to the relevant department of the government of U.S.

FACING INCREASED COMPETITION

Competition among rBST-treat milk and rBST-free milk.

Compete with Pioneer Hi-Bred International, Inc. that offer lower prices on the seeds.

3. EVALUATION & ALTERNATIVE

ALTERNATIVES

Lingering concerns over the safety and environmental impact of its products

ProductDevelopme

nt

Monitoring And

Quality control

PublicRelation

Objective:Reduce or even eliminate the worry of consumer about the safety and environmental impact of its product.

SOLUTION CHOSEN

ALTERNATIVES

Organizational Misconduct

Establish Organizatio

nalCulture

MonitoringRewards

and Sanctions

Objective:Reduce or even eliminate the misconduct within the organization

SOLUTION CHOSEN

ALTERNATIVES

Increased competition from other companies

Pricing competition

BenchmarkDifferentiation

Objective:Win the competition from competitors

SOLUTION CHOSEN

4. CHOSEN ALTERNATIVE & IMPLEMENTATION DETAILS

PUBLIC RELATION

Educate the public (stakeholder)

1. Certification by FDA

- the genetically modified food is safe to consumer.

- milk from Posilac-treated cows same in terms of safety with normal cows.

2. Study from New York Medical College – Roundup doesn’t create health risk for human.

Create positive image

1. Stress on What Bio product can achieved.

2. More CSR

3. Proactive action towards preventing “super weed & super bugs”

ESTABLISH ORGANIZATIONAL CULTURE

Employees - Clearly define corporate policy & code of

conduct. - let employees learn & monitor between

employees - reconstruct corporate image in employees mind

by eliminating the bribery habits.

DIFFERENTIATION

Innovation of product (technology advancement)

1. Drought-resistant technology – eg: Corn

2. Create value-added properties

– eg: better service & quality product.

3. Fully utilize the resources & knowledge of the company

– to create more competitive advantage in future.

THE END……