INT315 - International Management WEEK 1 SWOT By: Gui Wee Han (741992)
Monsanto SWOT Analysis Introduction
Monsanto Company (Monsanto) is a global provider of agricultural products. The company produces seed brands in large-acre crops like corn, cotton, and oilseeds (soybeans and canola), as well as small-acre crops like vegetables. (Monsanto, 2010) It is headquartered in St. Louis, Missouri and employed 18,800 people as of August 2007. (PRlog, 2008) The US is Monsanto´s major market. Monsanto also has operations abroad, covering the regions of North America, South America, Europe, Asia, Australia and Africa. The company recorded revenues of $8,563 million in the fiscal year ended August 2007, an increase of 17.4% over 2006. The operating profit of the company was $1,418 million in fiscal year 2007, an increase of 21.1% over 2006. The net profit was $993 million in fiscal year 2007, an increase of 44.1% over 2006. (PRlog, 2008) Strengths y
It is the world's leading producer of the herbicide glyphosate, marketed as "Roundup". "Roundup".
y
Wide range of customers from US to Asia.
y
Leading producer of genetically engineered (GE)seed (Greenpeace International, 2008)
y
Experienced Been in the agricultural business since 1901.
Weaknesses
y
Aggressive litigation
y
Practices political lobbying ,
y
Business practice considered controversial around the world
y
Primary target of the alter-globalization movement and environmental activists.
y
Seed patents violation by farmers
y
Controversial history in India Child labor (Venkateswarlu) & Farmers suicide (Frontline World, 2005).
y
False advertizing in France (Organic Consumer Association, 2007)
INT315 - International Management WEEK 1 SWOT By: Gui Wee Han (741992) Opportunities
y
Cooperation with BASF - largest chemical company in the world headquartered in Germany - in research, development and marketing of biotechnology (BASF - The Chemical Company, 2007)
y
Improving Biotechnology processes and chemicals
y
Rich land space in countries that Monsanto havent ventured into.
y
Re-establishing its public image in the eyes of consumers, governments.
Threats
y
Land shortage in the future
y
Inter-country Economies
y
Natural Disasters outbreak of new diseases
y
Seed mutation possibilities cause more diseases
y
Culture barrier different views on GE foods
y
Technology taking over farmers role, causing unemployment.
Conclusion
Monsanto In Europe
The Europeans have been resisting genetically modified (GM) food for a long time. Monsanto has been facing stiff resistance from the EU over its portfolio of GM foods. Their approval is important for Monsanto as the EUs position on GM foods influences the global debate. In April of 1996, few different varieties of US-grown genetically modified soybean began to enter the UK commodity markets. Monsantos Roundup Ready variety of GM soybeans was among them. In August that same year, the Environmental Ministers council of the European Union gave Monsanto permission to import and grow genetically modified soybean throughout Europe. Prior to this, GM soybeans could only be sold in US, Canadian and UK markets, the EU new ruling allowed GM soybeans into Europe had significantly increased Monsantos potential market. Additionally, it allowed the current 1996 plantings to be imported into Europe without additional testing or labeling.
INT315 - International Management WEEK 1 SWOT By: Gui Wee Han (741992)
Unfortunately, following the introduction, field trials were sabotaged and destroyed as environmental protection organizations were vocally protesting GMOs, and European public opinion of GM technologies began a steady decline. Truth is, the GM industry has never gained full approval or support from the public in the EU. There has been a moratorium on the approval of new GM crops since 1998 caused by the public anxiety over the potential risks of GM foods. (The Guardian UK, 2002) Many Europeans wanted to know of the presence of GMOs in their foods because they believed GMOs to be completely novel. Perhaps the fear were further anchored by the 1995 outbreak of mad cow disease (bovine spongiform encephalopathy or BSE) in Europe, where it no doubt exacerbated public resistance to novel food technologies. The thing about European cultures is, they placed great confidence in knowledge learned through historical experience. Even food practices that were questionable by todays standards were accepted in Europe if they had been going on for centuries without major incident.
Yes, several laws have been passed on this subject, the Regulation of 2004 laid down procedures on traceability and labeling of genetically modified organisms (GMOs) and all products produced using GMOs. The mandatory labeling legislation extends its requirement to all food and food ingredients produced from GMOs regardless of the detectable presence of DNA or protein within the final food product. These actions severely affected Monsanto, as labeling foods as GM would stigmatize/denounce the foods. (The Guardian UK, 2002)
With a general resistance to novel food technology and declining trust in government, Monsantos introduction of GMOs to Europe faced serious challenges. As a fundamentally new type of food product, GMOs had no historical experience that people could rely on. Monsanto was counting on the public support that normally followed from European government approval, but to no avail.
In addition to these challenges, Monsanto had difficulty
demonstrating the advantage of their biotechnology products to European countries.
INT315 - International Management WEEK 1 SWOT By: Gui Wee Han (741992)
Monsanto made a decision to market and sell controversial products in areas that did not receive the benefit. Monsanto was unable to convince Europeans with either economic or environmental arguments supporting GMOs. The genetic modification that most of the products had undergone did not add value to the consumer side of the equation; Monsanto was trying to promote GMOs where there would be very little price reduction for consumers. The GM products had the same price, which substantially means having the same characteristics as non-GM products, thus there was no incentive for consumers to even try the new GM products. Similarly, the primary environmental benefits occurred where the crops were grown, not where they were sold. Many Europeans argued that US farmers who exported their GMO crops to Europe received all the benefits with none of the costs.
References
Awards. (2010, July ). Retrieved August 03, 2010, from
http://aboutus.vzw.com/bestnetwork/NetworkAwards.html BASF - The Chemical Company. (2007, March 21). Interview Dr. Jürgen Hambrecht to work with Monsanto. Retrieved November 2, 2010, from
http://www.corporate.basf.com/de/investor/veranstaltungen/termine/070321_intervie w.htm?id=V00-QeTrjGoXxbcp*Tq Frontline World. (2005, July 26). Seeds of Suicide: India's Desperate farmers. Retrieved November 2, 2010, from http://www.pbs.org/frontlineworld/rough/2005/07/seeds_of_suicid.html Greenpeace International. (2008, March 7). New movie damns Monsanto's deadly sins . Retrieved November 2, 2010, from http://www.greenpeace.org/international/en/news/features/monsanto_movie080307/ Monsanto. (2010). Corporate Profile. Retrieved November 2, 2010, from http://www.monsanto.com/investors/Pages/corporate-profile.aspx Network Facts . (2010, July ). Retrieved August 03, 2010, from
http://aboutus.vzw.com/bestnetwork/network_facts.html
INT315 - International Management WEEK 1 SWOT By: Gui Wee Han (741992)
Organic Consumer Association. (2007, January 27). Monsanto Fined in France for 'False' Herbicide Ads. Retrieved November 2, 2010, from
http://www.organicconsumers.org/articles/article_4114.cfm PRlog. (2008, July 21). Monsanto Company - SWOT Analysis - New Research Report on Companies and Markets. Retrieved November 2, 2010, from
http://www.prlog.org/10091685-monsanto-company-swot-analysis-new-researchreport-on-companies-and-markets.html The Guardian UK. (2002, July 4). Tough European line on GM labelling. Retrieved November 2, 2010, from http://www.guardian.co.uk/uk/2002/jul/04/foodanddrink.eu#article_continue The Guardian UK. (2002, August 20). Troubled Monsanto scales down GM hopes in Europe . Retrieved November 2, 2010, from http://www.guardian.co.uk/uk/2002/aug/20/research.foodanddrink#article_continue Venkateswarlu, D. D. (n.d.). Child Labour and Trans-National Seed Companies in Hybrid Cotton Seed Production in Andhra Pradesh . Retrieved November 2, 2010, from
http://www.indianet.nl/cotseed.html