Monsanto - Us-Based Multinational Corporation Case Study

Industry background

Since their commercialization in the mid-1990s, soybean, corn, and cotton farmers have quickly adopted the use of genetically engineered seeds. Varieties in the United States have increased 139.4 million acres over the last decade, and continue to expand rapidly worldwide (Tadlock, 2010). Accompanying the use of genetically engineered seeds was the application of herbicides that were specially designed for them.

Company background

Monsanto is a leading US-based multinational corporation in the field of agri-chemistry, with headquarters in Creve Coeur, Missouri. (“Monsanto”, n.d.) They feature genetically improved seeds and herbicides to retailers and growers across the world. Monsanto is most well known for their production of “RoundUp”, their glyphosate product. They have an August 31 fiscal year end (Monsanto, 2017).

PEST ANALYSIS

Political

Political issues can greatly affect Monsanto in both positive and negative ways. Revenue is sensitive to different laws regarding chemicals in each country that Monsanto does business. As well, Monsanto has been successful in strengthening their ties with the government through political donations and lobbying. Quite a few employees of the FDA and other regulatory authorities have more or less worked for Monsanto in the past (“Monsanto,” n.d.).

Economic

Monsanto is a very big company with a large hold on the market. However, the U.S. Federal Reserve is expected to raise interest rates more than once this year, and that will increase the cost for Monsanto to export their products.

Social

Monsanto currently battles ethical issues such as public opinion on GMOs and growth hormones.  The younger generations which make up an increasing portion of the consumer group are more skeptical and concerned about their health when it comes to GMO foods. Additionally, there have been instances of Monsanto "bullying" and harassing smaller farmers by threatening litigation over patent infringement (and following through on those lawsuits) (“Monsanto,” n.d.).

Technological

Monsanto has received an offer of collaboration from Bayer, a German pharmaceutical giant, which may greatly increase their ability of developing new products. They have also launched a new technology named the dicamba-tolerant genetic trait, which will make crops resistant to dicamba, a widely used herbicide (“Monsanto,” n.d.).  

SWOT ANALYSIS

Strengths

Monsanto has a large hold on the market and have been around for over 100 years. For this reason, they have a large impact and are well known.

Weaknesses

Monsanto is often criticized for unethical practices which has made the company controversial. They are involved in a series of negative events including fraud, and environmental damage, and the general public seems to be slowly shifting their buying practices away from products grown with Monsanto’s products (“Monsanto,” n.d.).