Monsanto: Creating a Life Sciences Company
Executive Summary
I. Vision
Monsanto aims to be the leading agricultural company in the global market.
II. Objectives of the Case The case aims to:
1. Identify the core competencies of Monsanto
2. Identify the problems faced by the company, and its main concern
3. Enumerate alternative courses of action for the company’s concerns
4. Recommend the course of action that best fits with resources and constraints
III. Problem Statement With the company’s large ambitions, it is faced with a burdensome debt load, and insufficient resources to finance business expansion.
IV. Alternative Courses of Action
1. Divest the following businesses: Nutrition & Consumer Products; and Pharmaceuticals in order to focus on Agriculture
2. Enter a joint venture with other industry players
3. Expand business through debt financing
V. Analytical Tools
1. BCG Matrix
2. SWOT Analysis
VI. Recommendation
Thorough study of Monsanto’s business recommends that it focus on its core competency – Agriculture. Focusing on agriculture, would also mean its divesting on the other businesses in its portfolio, both Nutrition & Consumer products, and Pharmaceuticals.
VII. Implementation Plan To finance expansion, firstly in Pharmaceuticals, it is best to enter a merger with another company within 2 – 3 years. It is best to harness maximum cash inflow for a lackluster company, with the plan of divesting it in the future.
In the long-run, 5 – 10 years coming in to the future, focus on agriculture, and expand business through debt financing. Cash inflows generated, may be diverted to this segment. A portion of outstanding debt may also be converted to equity, for a less risky business. VIII. Conclusion Monsanto indeed is troubled with its growing debt load. Faced with threats coupled with both strengths and weaknesses, it is imperative that Monsanto face them with urgency. Its ambition of a life sciences behemoth may not be achieved due to internal
I. Vision
Monsanto aims to be the leading agricultural company in the global market.
II. Objectives of the Case The case aims to:
1. Identify the core competencies of Monsanto
2. Identify the problems faced by the company, and its main concern
3. Enumerate alternative courses of action for the company’s concerns
4. Recommend the course of action that best fits with resources and constraints
III. Problem Statement With the company’s large ambitions, it is faced with a burdensome debt load, and insufficient resources to finance business expansion.
IV. Alternative Courses of Action
1. Divest the following businesses: Nutrition & Consumer Products; and Pharmaceuticals in order to focus on Agriculture
2. Enter a joint venture with other industry players
3. Expand business through debt financing
V. Analytical Tools
1. BCG Matrix
2. SWOT Analysis
VI. Recommendation
Thorough study of Monsanto’s business recommends that it focus on its core competency – Agriculture. Focusing on agriculture, would also mean its divesting on the other businesses in its portfolio, both Nutrition & Consumer products, and Pharmaceuticals.
VII. Implementation Plan To finance expansion, firstly in Pharmaceuticals, it is best to enter a merger with another company within 2 – 3 years. It is best to harness maximum cash inflow for a lackluster company, with the plan of divesting it in the future.
In the long-run, 5 – 10 years coming in to the future, focus on agriculture, and expand business through debt financing. Cash inflows generated, may be diverted to this segment. A portion of outstanding debt may also be converted to equity, for a less risky business. VIII. Conclusion Monsanto indeed is troubled with its growing debt load. Faced with threats coupled with both strengths and weaknesses, it is imperative that Monsanto face them with urgency. Its ambition of a life sciences behemoth may not be achieved due to internal