And stevie does nothing about this abomination... CASE STUDY: Monsanto Inc. Monsanto is a major US corporation engaged in the production and sale of products for the agricultural industry. Founded over 100 years ago, it has grown and changed its profile through internal developments, acquisitions, disposals and changes of ownership. Beginning with food and drug products, it moved on to making industrial chemicals, followed in later decades by a range of products. These included plastics and synthetic fibres, herbicides, defoliants and insecticides, optoelectronic devices, agricultural seed production, and biotechnology products (notably, genetically modified crops). In the 1990s the company began a strategic transition from chemicals to biotechnology. It now operates in two major domains. First, there are products for agricultural productivity. These comprise principally herbicides sold via the Roundup brand. Second, there are ‘Seeds and traits’, on which the company claims exert a ‘laser focus’. These products comprise seeds, genomic and biotechnology products spanning corn, soybean, cotton, vegetables and other seed types for sale to farmers. Many of its seed stocks have been genetically modified (GM) to increase crop yields. Monsanto sells GM seeds and complementary herbicides in North America and worldwide. Such products require approval from the US Food and Drug Administration (FDA) and equivalent bodies. Former Monsanto employees reportedly hold positions in the FDA, the US Environmental Protection Agency and the Supreme Court. In some territories, notably the European Union (EU) where consumer resistance to GM foodstuffs is high, Monsanto has struggled to obtain regulatory approval for GM seeds. EU regulators have also been influenced by the precautionary principle, given uncertainty over the long-term impact of GM organisms that can cross-fertilise natural (organic) crops. Regulators also worry that Monsanto and its main GM competitors, Du Pont and Syngenta, are increasing their dominance of seed markets to an unhealthy degree. Thus, Monsanto is a controversial company. It is a ‘bête noir’ of the environmental lobby for aggressively promoting GM seeds. It has been accused of promoting Roundup-resistant crop strains to increase herbicide sales. In the 1990s it patented a technology for so-called ‘terminator’ seeds that breed only infertile plants, requiring farmers to buy new Monsanto seed each growing season. The outcry stopped the company commercializing this technology. In the 1960s and 1970s it was a producer of the infamous ‘Agent Orange’ used to defoliate jungles and disable fertile agricultural land in Vietnam. Monsanto is routinely a plaintiff in legal actions: against farmers for patent infringement and as defendant in actions brought by government agencies around the world. In 2009 its accounts reported financial provisions of $US 262 million to cover anticipated and potential costs of legal actions. Monsanto’s justification for developing GM seeds is its potential to feed a hungry world: GM crops have higher yields and greater disease resistance than natural strains. Monsanto is a highly profitable corporation. As of 2009, its sales revenues were $US 11.7 billion, net income was $US 2.1 billion; total assets were $US 17.9 billion. Its expenditure on research and development was $US 1.1 billion (9.4% of sales), a substantial proportion it had maintained for some years. Seeds and related products accounted for 62% of total sales (rising) and 67% of gross profits. The staple crop seeds, corn and soybean, accounted for three-quarters of sales and gross profits in this business. Gross profit margins were high: 61.7% of sales, compared with 51.0% in the agricultural productivity business (which depended on Roundup for 80% of sales), making it an effective cash generator to develop the seeds and the biotechnology business. Sources: various including monsanto and en.wikipedia.org/wiki/Monsanto Pitt, Martyn R. Essentials of Strategic Management. Sage Publications (UK), 03/2012.
Posted on: Thu, 19 Jun 2014 21:34:18 +0000