Strategic Planning and Management Paper
Submitted to: Prof. Marvin I. Noroña Submitted by: Giorgino S. Naval
I. EXECUTIVE SUMMARY They are also facing threat of new competitors from China which could potentially cause harm on the company’s profitability. The objective of this paper is to alleviate the company’s bad public image while maintaining the company’s competitive position as the agricultural biotech industry leader. Monsanto is the leading biotechnology-driven agricultural products company in the world. The company operates two business segments: Seeds and Genomics, and Agricultural Productivity. The company’s extensive biotech patent portfolio and aggressive marketing strategies have given the firm a significant competitive advantage in its industry segments. With $11.7 billion sales and an expanding bottom line, Monsanto’s success has provided a strong long-term return for its shareholders. However, the company currently faces a series of issues, including the expiration of key patents, a sudden increase in industry competition, a highly publicized antitrust case and environmental & health controversies. Monsanto must address these issues as it shifts strategic focus to expanding the Seeds and Genomics segment; and develop a necessary transition for the company to decrease the financial dependence on its former flagship product, Roundup® herbicide of which patent reached an expiry. The development of the strategy in this paper will consist of five main sections: External Analysis (DENTPC analysis, Porters 5 Forces), Internal Analysis (Value Chain Analysis, Financial Analysis, TOWS Matrix), Strategic Plan, Functional Area Strategies, Implementation (7-S, 8-SIT), and Financial Projections. The financial projections’ results will show that the company will be able to garner stable increases in its profits by using the proposed strategic plan and following the strategic implementation proposed in this paper.
INTRODUCTION Monsanto was founded in St. Louis, Missouri, in 1901, by John Francis Queeny, a 30-year veteran of the pharmaceutical industry. He funded the start-up with his own money and capital from a soft drink distributor and gave the company his wife's maiden name. The company's first product was the artificial sweetener saccharin, which it sold to The Coca-Cola Company. As Coca-Cola’s success grew, so too did Monsanto’s, and by the 1920’s the company decided to expand its production to include basic industrial chemicals. Monsanto entered the field of agricultural products in the 1940’s, and thus began a period of rapid expansion in which the company became one of the top 10 U.S. chemical companies. Monsanto also became a leading manufacturer of synthetic fibers, plastics and DDT (a well-known synthetic pesticide). These products were heavily criticized by environmentalists due to the negative side effects they produced. While the media focused on Monsanto’s reputation for releasing harmful toxins, the firm’s senior management focused on the operational side and began exploring innovative manufacturing processes. This exploration eventually resulted in new technology facilities, the first computer-controlled ammonia plant in the world, and the development of the ‘E-2 process’, which kept ammonium nitrate fertilizer together. By the late 1950’s, it was estimated that weeds, insects, and plant diseases accounted for $13 billion worth of damage to seeds and crops. In an effort to capitalize on this problem and further expand its agricultural product portfolio, Monsanto established the Agricultural Division, for which it built 25,000 square feet of labs, offices, libraries and greenhouses. By 1970, the company became the target of many protests due to rising global concerns for the environment by becoming one of the most important producers of Agent Orange which were known for its use by the U.S. military as part of its herbicidal warfare program in Vietnam. Agent Orange caused an...