Monsanto SWOT Essay

caller oerviewMonsanto participation (Monsanto or the fellowship) offers uncouth intersections to farmers. Its products include seeds, ergonomics trait products, and herbicides. Monsanto has processs in the US, Canada, Europe, South America, Asia, and Africa. It is headquartered in St. Louis, Missouri andemploys close 26,100 people, of which more than 5,500 people be temporary employees.The companionship recorded revenues of $11,822 meg during the financial year ended August 2011 (FY2011), an increase of 12.8% over FY2010. The operational profit 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 FACTS intimately OfficeMonsanto phoner800 North Lindbergh BoulevardSt. LouisMissouri 63167USA environ1 314 694 1000Fax1 314 694 1057Web Addresshttp//www.monsanto.com/ taxation / turnover 11,822.0(USD Mn)Financial Year EndAugustEmployees26,100New York pithMONMonsanto Company MarketLine foliate 3Monsanto Company cram Analysis fancy up ANALYSISMonsanto offers agricultural products to farmers that include seeds, ergonomics trait products, and herbicides. The go with has a leading commercialise position in versatile geographies based on product portfolio of well recognized vane call. However, increasing instances of infringement of quick-witted property rights asshole result in the friendships deformity dilution and loss of revenue. StrengthsWeaknesses leading(p) trade positionStrong focal point on look for and development(R&D)Wide client baseLegal proceedingsOpportunitiesThreatsGrowing ingest for food products withreduced vestal plummet and trans-fat strategical accords and acquisitionsGrowing population, especially in AsiaInfringement of intellectual property rightsgenetically modified organism (GMO)regulationsSeasonal nature of gross revenue of the seeds andgenomics departmentStrengthsLeading grocery store positionMonsanto is a leading global provider of agricultural products for farmers. The companys dependable brand portfolio allows it to founder a dogmatic 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 addition one of the most popular herbicides in the world. Asgrow, Deltapine, and Dekalb are genetically altered seeds (cotton wool, corn, soybean, and canola), which tolerate weeds and resist bugs. Seminis and De Ruiter are strong brands in the vegetable seeds contrast.Monsantos oblations of high subjecting variety seeds to a lower place well recognized brand names makes it a leading pseudo in most of the countries where it operates. Monsanto enjoys easy market penetration in new geographies based on its product portfolio which comprises well recognized brand. The companys strong brand portfolio put ups its market leadership position. Strong centre on inquiry and deve lopment (R&D)Monsanto Company MarketLinePage 4Monsanto Company get up AnalysisOver the long time Monsanto has become a leading supplier to farmers for their agricultural needs because of its ability to deliver innovative products suiting their requirements. The company has developed competencies in applying bioengineering to agriculture. Moreover, Monsantos traits technologies enable it to develop herbicides and seeds with maestro traits such as weed resistant, drought resistant, and improved yield. The company invests a substantial portion of its revenue towards look for and development (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 layed into a number of strategic collaborations to thrive its R&D capabilities further. For instance, in March 2011, Monsanto and Sapphire Energy (Sapphire) announced an agreement to enter into a multi-year collaboration that would leverage Sapphires algae-based research curriculum to discover genes that could be applied to agriculture, particularly in the champaign of yield and stress. In the same month, Monsanto and BASF r each(prenominal)ed an agreement to collaborate on the furtherance of dicamba charitable cropping systems. Further, BASF has concur to supply formulated dicamba herbicide products to the company.To further supercharge its R&D capability, the company has established two new R&D tintions, one each in China and the US. The research center in China provide initially participate in early-stage of bioinformatics and genomics research, and will serve as a base for collaborations with Chinese scientists. The some 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 vicinity.Monsantos focus on applying bioengineering to agriculture not only gives it a agonistic edge but also enables it to revitalize its product portfolio. Moreover, its continuous focus on delivering seeds with new and improved traits helps it to cater to changing consumer preferences by offering take account driven products to customers.Wide customer baseMonsantos business operations have been well diversified be it in the price of products offered or the geographical partake. The products offered by its seeds and genomics and agricultural productivity segments complement each other well and offer a complete 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 full(a) 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, and Mexico, among others. Diversified oper ation dilutes the companys business risk 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 MarketLinePage 5Monsanto CompanySWOT AnalysisLegal proceedingsMonsanto is involved in various legal proceedings. For instance, in January 2011, the Arkansas Teacher Retirement System filed a complaint alleging that Monsanto violated the federal securities laws by making false and cheapjack statements between January 7, 2009, and May 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 say that these statements artificially inflated the price of thestock and that purchasers of the stock during the relevant breaker point were damaged when the stock price later declined. The company has also go about similar lawsuit in 2007.Further, in May 2011, the US environmental Protection Agency (EPA) issued a Notice of Violation to the company, alleging violations of federal environmental release reporting requirements at Monsantos phosphorous manufacturing plant in Soda Springs, Idaho. The EPA has asserted that the alleged violations may subject the company to civilized penalties. Misrepresentation of vital information and lack of precautionary measures results in penalties and sever the companys operations. Moreover, distortion of information adversely affects the share toters confidence and the gainfulness and credit rating of the company in the long run.OpportunitiesGrowing call for for food products with reduced saturated fat and trans-fat Due to the increased sensation regarding the health issues ca employ due to the white plague of trans-fat, people in the US and in many European nations have been opting more healthier options. Increased consumption of trans-fat lowers blood levels of HDL (the good cholesterol) and leads to the elevation of LDL (considered the bad cholesterol).This at long last leads to the hardening of the arteries and different coronary problems. Bowing to unexclusive pressure and judicial proceeding by various anti-trans-fat organizations, many food companies (Nabisco and Kraft Foods) in the US have taken active steps to remove trans-fat from their offerings. Companies like taco Bell, KFC (Kentucky Fried Chicken), Wendys, Arbys, and McDonalds have also been trying to substitute high trans-fat preparedness oils with other healthy alternatives.Keeping this trend in mind, Monsanto has been actively operative 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 medicine Administration (FDA) has issued a response letter to Monsantos Generally know as Safe (GRAS) notification.The FDAs letter supports the use ofoil from Vistive notes soybeans (seed type manu factured 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 return once the oil from Vistive Gold soybeans is commercialized. Monsanto has already completed the US regulatory submissions to the US Department of Agriculture and FDA for the sale of Vistive GoldMonsanto Company MarketLinePage 6Monsanto CompanySWOT Analysissoybean. It has also made many regulatory submissions to the appropriate regulatory agencies around the world for the products commercialization. Once the required regulatory process is completed, Monsanto will be able commercialize its product. by dint of leveraging its expertise in developing seeds with novel traits and wide fiesta distribution network, Monsanto can become a leading supplier of seeds that arrive at crops with low saturated fat and trans-fat. It will help the company to expand its revenue base and gain a competitive edge over its peer group.Strategic agre ements and acquisitionsMonsanto has entered into a number of agreements and acquisitions in order to lift 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 curriculum 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 broaden its Roundup Ready PLUS weed worry platform in the US.In September 2011, Monsanto and GrassR oots 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 link up to yield, environmental stress, and fertilizer utilization in corn, soybean, cotton, and canola.In March 2012, BASF sign-language(a) 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 October 2011 and is expected to re ach 10.6 billion by 2050. As the population grows the demand for agricultural products is also going to rise.According 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 value of $915.4 billion. In 2015, the Asia-Pacific agricultural products market isMonsanto Company MarketLinePage 7Monsanto CompanySWOT Analysisforecast 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 t he countries where it operates.Thus, it can leverage its expertise, distribution network, and product portfolio comprising well known brand names to cater to the ontogeny 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 important 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 protection is obtained, competitors, farmers, or others in the range of mountains of commerce may raise legal challenges to its rights or illegally infringe on the companys rights, including through means that may be difficult to prevent or detect.In addition to this, due to the quick 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 prior 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 increasechallenge 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 squeeze in view of bans imposed on its genetically modified crops. The dot of public acceptance or perceived public acceptance of its biotechnology products can affect its sales and results of operations by affecting set approvals, regulatory requirements, and customer purchase decisions.Public concern can affect the timing of the government approvals in different countries. Even if the approvals are granted, public concern can lead to increased regulation or judicial proceeding 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 stiff criticism and dissent 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 vitrine difficulty in expanding its market and growth of its revenue.Seasonal nature of sales of the seeds and genomics segmentMonsantos business is greatly affected 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 mainly affected by the p urchasing and growing patterns in North America.The seeds and genomics segments contribution 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 9Copyright of Monsanto Company SWOT Analysis is the property of Datamonitor Plc and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holders express written permission. However, users may print, download, or email articles for psyche use.