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Monsanto Company Case Solution

Solution Id Length Case Author Case Publisher
2730 1668 Words (6 Pages) Marc Lipson, Rick Green Darden School of Business : UVA-F-1597
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The case makes a note of the Chemical and Biotechnology Industry in the agriculture sector, highlighting Monsanto, a major manufacturer and distributor of agricultural chemicals and seeds. It charts Monsanto's journey to a leading institution, despite the backdrop of a looming financial crisis that is set to alter the trajectory of business globally in 2008. Monsanto was well placed to take advantage of the growth of the industry by pivoting to producing an innovative herbicide that secured patent protection, followed by transitioning focus to genetically biotech agriculture. Monsanto's competitors had faced a significant decline in their topline. However, Monsanto's share price had resisted on the back of its stellar product portfolio, particularly in the shape of its star product Roundup and genetically modified corn seeds. However, despite Monsanto’s continued growth over the past couple of years, uncertainty loomed in the short term as the international demand for alternative fuels dropped on the back of rising costs and credit squeeze. 

Following questions are answered in this case study solution

  1. Describe how the Monsanto Company became so powerful in the chemical and agricultural biotechnology industry.

  2. Describe how Monsanto uses organizational power.

  3. What sort of power do environmentalists and other activists hold in their fight against Monsanto's policies? Where does it come from? How can they best use or increase their power?

  4. Describe the Monsanto Company as an example of revolving door politics and the way it gives the company additional organizational power.

Case Analysis for Monsanto Company Case Solution

1. Describe how the Monsanto Company became so powerful in the chemical and agricultural biotechnology industry.

Monsanto was able to pivot early on from its traditional business line of producing artificial sweeteners to focus on a more differentiated line of herbicides and, later, genetically modified seeds. Both were growing markets in light of the fact that food demand had been surging on the back of rising estates and populations, particularly in South America and Asia. The ability to create a differentiated market on the basis of a niche product greatly influenced Monsanto’s trajectory within the industry as it was able to acquire a different clientele as compared to producers who were stuck manufacturing traditional pesticides on massive scales. They were able to introduce their own developments through their innovation that led to patent protection, in the shape of the isopropyl amine salt of glyphosate, thus further raising barriers around them in regards to their competition. The protection allowed them to remain in control of the herbicide market for nearly 30 years, establishing their brand as a household name and winning customers who would only utilize Monsanto's Roundup. This is also reflected in terms of how their goodwill has experienced exponential growth in the past couple of years. Similar innovation played a great role in terms of creating and presiding over the genetically modified seeds market by becoming the first company to modify a plant cell. Being an early mover and seizing the wave of alternate fuels rise, Monsanto was able to select a particular niche that they carved out for themselves in the shape of genetically modified corn seeds. This allowed them to retain pricing power and focus on developing a multichannel distribution network that included licensees, wholesalers and direct marketing. Monsanto was also able to employ a great strategy of upselling by introducing products that complemented their initial products. Their line of genetically modified seeds came ready to use with regards to their earlier, much more used products of herbicides. This helped give customers an all-encompassing product line meeting the needs of customers across the globe. These factors greatly contributed to Monsanto’s rise in the chemical and agricultural biotechnology industry.

2. Describe how Monsanto uses organizational power.

Over the years, Monsanto had garnered considerable power that it was able to use extremely effectively to add greater value to the functioning of the organization itself. Monsanto was able to hone its expertise in particular products and sectors that was driven through consistent innovation. They had been able to develop considerable progress in the fields of chemical formulations and genetic seed modification which was reflected in their patented technology that allowed them to retain this knowledge within their organization for over three decades.

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