Genetically Modified Food and Monsanto Essay

2261 Words Oct 21st, 2008 10 Pages
Monsanto Case Study Monsanto is a multinational world leader in the production of the herbicide glyphosate and in the manipulation of genetically modified (GM) seeds. They were a chemical company, which shifted into the new life science area developing numerous patents related to genetic techniques and GM seeds variety. The company entered in the agrobiochemical industry, which is in its growth life cycle based on continuous product improvements and replacement by superior traits. The industry is focused on chemical products used in agriculture and genetically modified crops.
There are rivals in the agrobiochemical industry and during the early 2000s; government regulation, public and medical concern about the safety of genetically
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An exiting barrier experienced by the firms is the high fixed cost of technology agreements. The degree of vertical integration in which the firm is involved consists a barrier as well.
Conclusion:
In the agrobiochemical industry buyers and suppliers have high bargaining power and there are no good products substitutes. The industry is unattractive particularly because patents laws and government requirements increased the monopolies of few companies and the rivalry for market share. The industry also requires high financial resources.
Competitor analysis
The main competitors in the industry are Monsanto, DuPont, Novartis and American Home Products.
Monsanto is the leader in biotechnology on the marketplace. Due their intellectual properties and R&D capabilities Monsanto had the opportunity to gain market share and power. The benefit of being a first mover permitted them to gain the loyalty of the customer. Monsanto’s strategic action often undertaken to maintain competitive advantage is decrease costs of the products due their high margin profits.
DuPont is a large company that produces a Monsanto’s product imitation. They however depends on Monsanto’s licenses to access traits.
Novartis is pointed out as one of the potential rival of Monsanto and DuPont. It is a company with but has the highest capital-spending budget for research in biotechnology. Due their financial resources Novartis are more likely to launch

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