Monsanto SWOT Essay

company everywhereviewMonsanto Company (Monsanto or the familiarity) offers bucolic pull together-times to farmers. Its merchandises include seeds, ergonomics characteristic returns, and herbicides. Monsanto has operations in the US, Canada, Europe, South America, Asia, and Africa. It is headquartered in St. Louis, Missouri andemploys about 26,100 people, of which more than 5,500 people be temporary employees.The telephoner preserve revenues of $11,822 million during the financial year ended wonderful 2011 (FY2011), an increase of 12.8% over FY2010. The ope rank dough of the club was $2,502 million in FY2011, an increase of 56.1% over FY2010. The crystalize profit was $1,607 million in FY2011, an increase of 46.6% over FY2010.KEY FACTSHead OfficeMonsanto Company800 northeasterly Lindbergh BoulevardSt. LouisMissouri 63167USAPhone1 314 694 1000Fax1 314 694 1057Web tradehttp//www.monsanto.com/Revenue / turnover 11,822.0(USD Mn)Financial Year deceaseAugustEmployees26,1 00New York TickerMONMonsanto Company MarketLine rogue 3Monsanto Company don strikework abridgment raise ANALYSISMonsanto offers country harvest-times to farmers that include seeds, biotechnology trait products, and herbicides. The federation has a lede grocery set up in various geographies bagfuld on product portfolio of well recognized bulls eye names. However, increasing instances of misdemeanor of adroit topographic institutionalise rights can result in the confederacys pit dilution and loss of revenue. StrengthsWeaknesses take market viewStrong focus on question and exploitation(R&D)Wide customer base licit proceedingsOpportunitiesThreats ontogenesis get hold of for food for thought products with get overd pure(a) fat and trans-fat strategical agreements and acquisitionsGrowing tribe, especially in AsiaInfringement of intellectual plaza rightsgenetically modified organism (GMO)regulationsSeasonal record of gross gross sales of the seeds andgenomics m emberStrengthsLeading market positionMonsanto is a leading global provider of unpolished products for farmers. The companys strong brand portfolio al economic crisiss it to move over a commanding position in various countries. Its most popular brands include Roundup, Dekalb, Asgrow, De Ruiter, Deltapine, and Seminis. Roundup is the companys flagship brand. It is in make senseition one of the most popular herbicides in the cosmos. Asgrow, Deltapine, and Dekalb are genetically altered seeds ( cotton plant, corn, soybean, and canola), which tolerate widows weeds and resist bugs. Seminis and De Ruiter are strong brands in the veggie seeds care.Monsantos offerings of spirited yielding variety seeds down the stairs well recognized brand names makes it a leading player in most of the countries where it operates. Monsanto enjoys scant(p) market penetration in raw geographies found on its product portfolio which comprises well recognized brand. The companys strong brand portfolio enhances its market lead position. Strong focus on look and spudment (R&D)Monsanto Company MarketLine summon 4Monsanto CompanySWOT AnalysisOver the years Monsanto has wrick a leading supplier to farmers for their agricultural needs because of its force to deliver innovative products suiting their requirements. The company has genuine competencies in applying bioengineering to agriculture. Moreover, Monsantos traits technologies enable it to develop herbicides and seeds with superior traits such as weed resistant, drouth resistant, and improve yield. The company invests a hearty component part of its revenue towards investigate and knowledge (R&D) per year. In FY2011, the companys investment in R&D amounted to $1,386 million, an increase of 15% over FY2010.Monsanto has also entered into a number of strategic coactions to expand its R&D capabilities further. For instance, in March 2011, Monsanto and sky-blue Energy (Sapphire) announced an agreement to enter into a multi- year collaboration that would supplement Sapphires algae-based seek platform to attain genes that could be applied to agriculture, peculiarly in the discipline of yield and stress. In the alike(p) month, Monsanto and BASF r to each oneed an agreement to get together on the advancement of dicamba resistive cropping systems. Further, BASF has agreed to cede formulated dicamba herbicide products to the company.To further upgrade its R&D capability, the company has established two new R&D centers, one each in china and the US. The research center in China go away initially participate in early-stage of bioinformatics and genomics research, and volition serve as a base for collaborations with Chinese scientists. The other research center in Texas, the US will focus on cotton research and will act as the central point for the companys breeding and testing programs in the High Plains expanse.Monsantos focus on applying bioengineering to agriculture not only gives it a rival rous edge but also enables it to revitalize its product portfolio. Moreover, its continuous focus on delivering seeds with new and improved traits stand bys it to cater to changing consumer preferences by offering think of driven products to customers.Wide customer baseMonsantos business operations get to been well alter be it in the terms of products offered or the geographic reach. The products offered by its seeds and genomics and agricultural productivity segments complement each other well and offer a tell apart solution to farmers and other customers. In FY2011, Monsanto derived 72.6% of its revenues from the seeds and genomics segment, while the agricultural productivity segment accounted for the remaining 27.6% of the total revenue. Geographically, in FY2011, the US, Europe-Africa, and Brazil accounted for 53.9%, 12.8%, and 10.8% of the companys revenue, respectively.The remaining areas that contributed to the revenues of Monsanto were Asia-Pacific, Argentina, Canada, a nd Mexico, among others. diversify operation dilutes the companys business pretend and helps Monsanto to cater to a wider customer base. It further insulates the company from economic fluctuations in any one region and thereby helps it to generate balanced earnings.WeaknessesMonsanto Company MarketLine scalawag 5Monsanto CompanySWOT AnalysisLegal proceedingsMonsanto is involved in various effective proceedings. For instance, in January 2011, the Arkansas Teacher Retirement dodge filed a complaint alleging that Monsanto violated the federal securities laws by making false and misleading statements between January 7, 2009, and whitethorn 27, 2010, regarding its earnings guidance for fiscal 2009 and 2010 as well as the anticipated future performance of its Roundup business and the seeds and genomics business.They also claim that these statements artificially inflated the expenditure of thestock and that bribers of the stock during the relevant period were discredited when the st ock price later declined. The company has also faced similar lawsuit in 2007.Further, in May 2011, the US Environmental Protection chest (EPA) issued a Notice of Violation to the company, alleging violations of federal environmental release reporting requirements at Monsantos phosphoric manufacturing plant in Soda Springs, Idaho. The EPA has asserted that the assert violations may subject the company to civil penalties. thaumaturgy of vital info and lack of precautionary measures results in penalties and disrupt the companys operations. Moreover, distortion of information adversely affects the sharebearers confidence and the profitability and credit rating of the company in the long run.OpportunitiesGrowing requirement for food products with reduced saturated fat and trans-fat overdue to the increase awareness regarding the health issues caused due to the use of trans-fat, people in the US and in many an(prenominal) European nations view been opting more healthier options. c hange magnitude consumption of trans-fat lowers blood levels of HDL (the good cholesterol) and leads to the vertex of LDL (considered the bad cholesterol).This ultimately leads to the hardening of the arteries and different coronary problems. Bowing to public pressure and litigation by various anti-trans-fat organizations, many food companies (Nabisco and kraft Foods) in the US have taken vigorous steps to remove trans-fat from their offerings. Companies like Taco Bell, KFC (Kentucky heat up Chicken), Wendys, Arbys, and McDonalds have also been trying to substitute high trans-fat cooking petroleums with other healthy alternatives.Keeping this burn in mind, Monsanto has been actively working on the development of seeds that will advance the growth of foods with reduced saturated fat and reduced or no trans-fat. The US Food and Drug Administration (FDA) has issued a retort letter to Monsantos Generally Recognized as Safe (GRAS) notification.The FDAs letter supports the use of oil from Vistive Gold soybeans (seed type manufactured by the company) to have less saturated fat and trans-fat. The new product would help the farmers to benefit from the premium pricing for their harvest once the oil from Vistive Gold soybeans is commercialized. Monsanto has already correct the US regulatory submissions to the US Department of gardening and FDA for the sale of Vistive GoldMonsanto Company MarketLinePage 6Monsanto CompanySWOT Analysissoybean. It has also do numerous regulatory submissions to the appropriate regulatory agencies just about the world for the products commercialization. Once the necessary regulatory parade is completed, Monsanto will be able commercialize its product. finished leveraging its expertise in developing seeds with saucy traits and wide spread distribution network, Monsanto can become a leading supplier of seeds that produce crops with low saturated fat and trans-fat. It will help the company to expand its revenue base and gain a compe titive edge over its peer group.Strategic agreements and acquisitionsMonsanto has entered into a number of agreements and acquisitions in order to boost its market share and profitability. For instance, Monsanto acquired Divergence, a privately-held St. Louis-based biotechnology research and development company, in February 2011. In March 2011, Monsanto and Sapphire Energy announced an agreement to enter into a multi-year collaboration that would leverage the latters algae-based research platform to discover genes that could be applied to agriculture, particularly in the field of yield and stress.In the same month, Monsanto and BASF reached an agreement tocollaborate on the advancement of dicamba tolerant cropping systems. Further, BASF has agreed to supply formulated dicamba herbicide products to the company. Further, in June 2011, Monsanto entered into collaboration with Amvac Chemical, a subsidiary of American Vanguard, to poke out its Roundup Ready PLUS weed management platform in the US.In September 2011, Monsanto and GrassRoots biotechnology agreed to extend their existing three-year research collaboration for an additional two years through January 2014. In November 2011, Monsanto and Evogene announced a one-year extension to their five-year research and development collaboration focused on identifying key plant genes related to yield, environmental stress, and fertilizer drill in corn, soybean, cotton, and canola.In March 2012, BASF signed a supply agreement with Monsanto for fungicide seed treatments for cotton and soybeans in North America.These strategic agreements and acquisitions will help Monsanto to build a stronger platform for the promotion of its brand image. It will strengthen the companys market share and boost revenue growth. Strategic collaborations will also enhance Monsantos research capabilities and add to its market competitiveness.Growing population, especially in AsiaCurrently, the world population is more than 7 billion, as of O ctober 2011 and is expect to reach 10.6 billion by 2050. As the population grows the demand for agricultural products is also going to rise. fit in to MarketLine (a unit of Informa) estimates, the Asia-Pacific agricultural products market (the agricultural product market consists of six segments cereals fruit, vegetables, roots, and tubers oil crops and pulses sugar crops and sweeteners spices and stimulants and nuts) grew by 4% in 2010 to reach a survey of $915.4 billion. In 2015, the Asia-Pacific agricultural products market isMonsanto Company MarketLinePage 7Monsanto CompanySWOT Analysis consider to have a value of $1,228.4 billion, an increase of 34.2% since 2010. The Indian agricultural products market, which accounted for 13.8% of the Asia-Pacific agricultural products market in 2010, grew by 14.8% in 2010 to reach a value of $126 billion. In 2015, the Indian agricultural products market is forecast to have a value of $217.5 billion, an increase of 72.6% since 2010. Monsanto is a leading player in most of the countries where it operates.Thus, it can leverage its expertise, distribution network, and product portfolio comprising well known brand names to cater to the maturement demand for high yielding variety (HYV) seeds. Monsantos revenue and profit margins can tremendously increase as the demand for HYV grows, especially in Asia.ThreatsInfringement of intellectual property rightsProtecting its intellectual property rights is very strategic for Monsantos business, particularly in the seeds and genomics segment. The company obtains and protects its intellectual property rights in jurisdictions in which the products are produced or used and in jurisdictions into which the products are imported. However, even if apology is obtained, competitors, farmers, or others in the chain of commerce may raise legal challenges to its rights or illegally contradict on the companys rights, including through means that may be difficult to prevent or detect.In additi on to this, due to the rapid pace of technological change, and the confidentiality of patent applications in some jurisdictions, competitors may be issued patents from applications that were unknown to the company foregoing to issuance. These patents could reduce the value of the companys commercial or pipeline products.Therefore, protecting inventions is critical for Monsanto to meet the outgrowthchallenge of infringement of intellectual property rights. A failure to do so could mean substantial loss of revenue and market share, and brand dilution.Genetically modified organism (GMO) regulationsMonsantos revenues could be negatively impacted in view of bans imposed on its genetically modified crops. The degree of public word sense or perceived public acceptance of its biotechnology products can affect its sales and results of operations by affecting planting approvals, regulatory requirements, and customer purchase decisions.Public concern can affect the quantify of the governm ent approvals in different countries. Even if the approvals are granted, public concern can lead to increased regulation or litigation against government regulators concerning prior regulatory approvals. Recently, the European Commissioner approved the cultivation of GMO potatoes in Europe, but the decision has come under stung criticism and protest from various groups working against the GMO crops.Monsanto Company MarketLinePage 8Monsanto CompanySWOT AnalysisSimilar regulatory controls could affect the companys market position in various countries. As the regulations around the use of GMO crops intensify, Monsanto would face difficulty in expanding its market and growth of its revenue.Seasonal nature of sales of the seeds and genomics segmentMonsantos business is greatly touch by seasonal changes mainly in the seeds and genomics segment. In FY2011, approximately 72% of the seeds and genomics segments sales occurred in the second and third quarters. Thissegments seasonality is pri marily affected by the purchasing and increment patterns in North America.The seeds and genomics segments share to the overall revenue of the company has been steadily growing in the past few years. In FY2011, the segment accounted for 72.6% of the companys revenue, up from 56% in FY2009. Hence, seasonal disturbances can adversely impact the overall sales of the company.Monsanto Company MarketLinePage 9 secure of Monsanto Company SWOT Analysis is the property of Datamonitor Plc and its suffice may not be copied or emailed to tenfold sites or posted to a listserv without the copyright holders express written permission. However, users may print, download, or email articles for individual use.