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. [ CITATION Mon10 \l 1033 ] It is headquartered in St.
Louis, Missouri and employed 18,800 people as of August 2007. [ CITATION PRl08 \l 1033 ] 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. [ CITATION PRl08 \l 1033 ]
Strengths
 It is the world's leading producer of the herbicide glyphosate, marketed as "Roundup".
 Wide range of customers from US to Asia.
 Leading producer of genetically engineered (GE)seed [ CITATION Gre08 \l 1033 ]
 Experienced – Been in the agricultural business since 1901.

Weaknesses

 Aggressive litigation
 Practices political lobbying ,
 Business practice considered controversial around the world
 Primary target of the alter-globalization movement and environmental activists.
 Seed patents violation by farmers
 Controversial history in India – Child labor [ CITATION DrD10 \l 1033 ] & Farmers
suicide[ CITATION Fro05 \l 1033 ].
 False advertizing in France [ CITATION Org07 \l 1033 ]
 INT315 - International Management WEEK 1 SWOT
By: Gui Wee Han (741992)

Opportunities

 Cooperation with BASF - largest chemical company in the world headquartered in

Germany - in research, development and marketing of biotechnology [ CITATION BAS07 \l
1033 ]
 Improving Biotechnology processes and chemicals
 Rich land space in countries that Monsanto haven’t ventured into.
 Re-establishing its public image in the eyes of consumers, governments.

Threats

 Land shortage in the future

 Inter-country Economies
 Natural Disasters – outbreak of new diseases
 Seed mutation possibilities – cause more diseases
 Culture barrier – different views on GE foods
 Technology taking over farmer’s 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 EU’s 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. Monsanto’s 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 Monsanto’s 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. [ CITATION The021 \l 1033 ] 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 today’s 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. [ CITATION The02 \l 1033 ] 

With a general resistance to novel food technology and declining trust in government,
Monsanto’s 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

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http://www.monsanto.com/investors/Pages/corporate-profile.aspx

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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'
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Venkateswarlu, D. D. (n.d.). Child Labour and Trans-National Seed Companies in Hybrid Cotton
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