Monsanto Company SWOT and PESTLE Analysis

Strengths

1. Record Sales and Profit: In the fiscal year 2017, the company has reported EPS of $5.09 as compared to $2.99 of 2016. The company expects to grow further in the future years. With innovation being a key driver, the company’s business specifically in the Seeds and Genocide segment has marked record sales and gross profit. Monsanto reported net sales of $2.7 billion for the fourth quarter of fiscal year 2017.

2. Valuable Recognition: In the year 2017, Monsanto Company has been recognized as one of 2017 Working Mother 100 Best Companies by Working Mother magazine. The company has well framed programs for its workforce in terms of advancement of women, flexibility, childcare and paid parental leave. President of Monsanto’s active Family Network has also been recognized as the company’s 2017 Working Mother of the Year.

3. Strong financial performance: Monsanto Company is one of the major players in its sector. In its 2016 annual report, they have presented strong financial growth. The Y-o-Y change in EBIT from 2015 to 2016 is recorded at 31%. Net sales increased by 10% in 2016 over the past year figures.

Weaknesses

1. Legal allegations: Monsanto has faced a lot of legal allegations in the past. The Dicamba herbicide lawsuit is still undergoing trial. There have been other lawsuits and resistance by common people as well. These affects customer loyalty, trust on the brand and in turn affects the business of the company.

2. Competition from other players: There are a number of competitors to Monsanto in different segments of operation like Dow Chemical Company, Evogene Ltd., Agrium, CF Industries Holdings, etc. These companies are simultaneously working on their expansion and trying to build their hold on the market by increasing their market share in their respective segments. This has resulted in limited market share of Monsanto Company in the current market.

Opportunities

1. Development in crop analysis tools: The company has partnered with innovative aerial imagery companies to help advance the crop analysis through the high resolution imagery and technology. This will help farmers make informed, data-driven agronomic decisions. There is a scope for growth of the company through development in this field.

2. Expansion through merger: There has been a lot of talk around the Bayer-Monsanto deal for more than a year. If two of the world’s most innovative life sciences companies combine, then it would open up new doors in the sector. The future is quite uncertain threatened by expected famine, civil war, mass migrations, etc. To tackle such situations, we can think of something big that could solve problems on a large scale and that is very much possible with completion of this deal.

The unpublished sections of the entire SWOT analysis is available in the 'Complete Report' on purchase.

Political

1. European Parliament issues: Monsanto lobbyists have been banned from entering the European parliament because the company has avoided to attend a hearing related to the allegations it faced for regulatory interference. It is now not possible for Monsanto officials to attend committee meetings or use digital resources on parliament premises in places like Brussels or Strasbourg. This will affect the company’s advocacy campaign.

2. Government ties: As one of its strategy, Monsanto believes in maintaining ties with the government. The company has induced politicians to abdicate their responsibility to protect consumers through generous campaign contributions and heavy lobbying. The company’s strategy has been very successful owing to the number of former Monsanto employees who have been given jobs in the FDA and other regulatory agencies that monitor the company’s products.

Economic

1. Business deal to improve conditions: Bayer, a big chemical giant has offered Monsanto for a deal to become the world’s largest producer of seeds and pesticides. The recent offer by Bayer is to pay $127.50 per share. The latest offer values Monsanto at $56 billion excluding debt. This deal is facing controversies from some companies and governments. But economically, it is going to be a good deal for Monsanto company who are currently evaluating the offer and yet to announce their decision.

2. Expansion of business: Monsanto in April, 2017 completed a $50 million expansion at its Muscatine, Iowa plant. It provided increase in the level of formulations and packaging capacity at the plant to support the launch of Monsanto’s dicamba-tolerant trait technologies. This plant employs 400 full-time workers and produces variety of its products. Such plants of Monsanto are facilitating the production of Roundup Ready Xtend crop system which has potential for use in more than 200 million acres of soybean and cotton production in the American region.

Social

1. Pesticide attack: After the Monsanto Company launched Roundup Ready 2 Xtend seeds, it has been a disaster for the company. This is due to the reason that dicamba is highly volatile. It is prone to convert into a gas and spread in different areas causing damage to different crops. Many farmers have faced huge damages and are now expressing anger requesting the company to fix their crops.

2. Support in difficult times: Monsanto Company has pledged to donate $100,000 to help the rescue and relief operations towards the earthquake that struck Mexico on September 19, 2017. The company is also looking at scope of offering help towards Hurricane Maria affected areas. The company will continue to check the impact of the earthquake in different locations of Mexico on its employees and the sites over there.

The unpublished sections of the entire PESTLE / PESTEL analysis is available in the 'Complete Report' on purchase.