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Bayer-Monsanto Internationalization November 19, 2020
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[Company name]
Bayer-Monsanto Internationalization Company Analysis
[Author name] 11-19-2020
Bayer-Monsanto Internationalization November 19, 2020
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Contents
Introduction ..................................................................................................................................................... 2
Monsanto: The History of a Growing International ........................................................................................ 3
Company SWOT Analysis .............................................................................................................................. 5
Strengths ..................................................................................................................................................... 5
Weaknesses ................................................................................................................................................. 5
Opportunities............................................................................................................................................... 6
Threats ........................................................................................................................................................ 6
Conclusion ...................................................................................................................................................... 7
Bibliography ................................................................................................................................................... 8
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Introduction
Historically, technology plays a key role in the internationalization of a
company. This essay is an analysis of the strategies taken by the Monsanto
company that is now under the ownership of Bayer, and how the joining of the two
companies has played a role in current circumstances that are having global effects
on their international market. Looking at the original history of the two companies,
we will analyse the global impactors that helps to push these companies products
into international use, as well as the repercussions that came because of this quick
push into the international markets. Then there is a SWOT analysis to easily
investigate the strengths and opportunities of the company, as well as the threats
and weaknesses it is currently facing. In this case, the strengths are focused strongly
in new technology and the marketing of new and current products, while the current
opposing impactors are seen in the given financial reports and statements for the
year end.
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Monsanto: The History of a Growing International
For a 120-year-old company, Monsanto has already had a profound impact
on international culture. Founded in St Louis, Missouri by John Queeny in 1901,
Monsanto began as small chemical company producing the artificial sweetener
saccharine, mainly used by the Coca-Cola company. In the 20-30’s it branched out
with the production of Sulfuric Acid and other chemicals, with a big step in the
40’s creating synthetic materials and plastics. It established the agricultural branch
in the 60’s focusing on herbicides and had its first international impact with an
alliance by contract from the American government supplying Agent Orange
during the Vietnam War. This resulted in one of the company’s first international
legal claims in the 80’s in which Monsanto paid $180 million to Vietnamese
veterans due to exposure to the chemical that is still causing birth defects today.
(Bravo, 2014)
The commercialization of Round Up in the 70’s was a main factor of the
company’s globalization, with products being approved for use in Malaysia,
Canada, and the UK. During the 90’s the company focused production on
biotechnology, producing a hormone for use on dairy cattle, as well as RoundUp
ready soybeans, cotton, canola, corn, and purchases several seed companies.
Later in the 2000’s it divides the chemical and agricultural sectors,
potentially because of the threat of legal battles, health, and pollution claims that
ensued shortly after, which resulted with the Solutia branch of the company filing
bankruptcy in 2003. However, this did not deter the company from resuming
developments, and they continued to purchase companies within agricultural seed
distribution, breeding, and patent rights. (Reuters, 2009) (Bayer, 2020)
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Monsanto’s increasing monopoly status also gives rise to concerns amongst
the Justice Department, claiming it would hold too much power in competitive
business agriculture by "selling 29 percent of the world's seeds and 24 percent of
its pesticides." (Corey & Graves, 2016) (Letzer & Gleklen, 2009) This Monopoly
power was furthered with the 2018 Bayer-Monsanto merger in which the
Agriculture company was purchased for $66 Billion by the drug and chemical
company.
Bayer dropped the Monsanto name in hopes to improve the public opinion
of the products, (Brodwin, 2018) but due to the legal litigations that ensued shortly
after, this may have been a futile effort. The Bayer name is now responsible for
close to 100,000 U.S. settlement cases because of the carcinogenic properties of
the main ingredient, Glyphosate, that were held in court to be responsible for cancer
in close contact users. These cases alone have cost the Bayer company close to
$10,000 billion so far in the US alone, with company stock shares down 50% since
the merger took place, and several countries lined up to ban Glyphosate use all
together. (Gillam, 2020)
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Company SWOT Analysis
Strengths
The Bayer-Monsanto merging created a much larger scale of management and
data impacts on the company. The control of seed patents and herbicide or pesticide
patents could give them more power to initiate use of the product.
“Selling nearly a third of the world's seeds actually means owning a huge portion of the
seed stock on the planet. And, Monsanto has spent decades genetically modifying seeds to
make them compatible with its chemical pesticides and herbicides, as with Roundup-ready
corn. Those are the kinds of chemicals and modifications that can't be washed off.” (Corey
& Graves, 2016)
They are also beginning to market and implement “green” initiatives to combat
climate change and impact soil health for the long term good. (Lee, 2020)
Weaknesses
Aside from the threat of monopoly restrictions and legal litigations, a particular
weakness to note is country regulations of biotech crops. This revolving door of
genetically changing products keeps countries continuously fluctuating between
usage and disapproval, as the crop patents are monitored from an individual crop
use perspective. The EU for example has strict regulations on which products can
enter and be used or grown in the country. (Álvarez, et al., 2020)
“Since 2001 the EU has had a de facto moratorium on GMO approvals. However, a
September 2013 decision of the General Court of the EU, which requires the
Commission to push forward a pending (since 2001) authorization proposal for
marketing maize 1507, may put an end to the moratorium.” (Papademetriou, 2014)
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Opportunities
The development of “superweeds”, weeds and crops that have become
resistant to a certain chemical in the herbicide product, could play in the favor of
the company if they have the only chemical formula on the market that will
terminate the plant. (Global, 2020) Growing pressure from activist groups to aid in
feeding poverty-stricken countries could push the incentive for the large company
to advocate and donate its’ products as trials and studies in the areas. (Beraldo,
2017)
Threats
Between the legal battles, declining stocks, community mistrust of the
products and company, as well as financial declines, Bayer could have made itself
an expensive financial deal with the Monsanto acquisition. The company holds fast
to its claims of Glyphosate safety, but the courts have been ruling otherwise as
lawsuits continue to build as the cases continue to go to trial. (Rosenblatt, 2020) If
this continues, and countries begin to ban certain GM crops and products, Bayer
may need to close parts of the agri-science sector all together.
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Conclusion
A company’s growth into an international is often a product of strategic
management, product or service consumer drive during a poignant era, and careful
alliances with other internationals. It because of this that technologies are fuelled
during times of war and great global pressure combined with government incentive.
Globalization plays a key role in these trades, as without international need driven
growth, many large companies would cease to exist as we know them today. In this
Bayer-Monsanto case, we can see the impacts that global pressure has on
international growth and decline from government incentives to consumer
pressures to expose truths and accountability in a company’s technology. Looking
at the current strengths and opportunities of this company are a sign of what the
future may hold for them. As per the given financial reports, the yearly outcome is
pressured for positivity in a negative time for the company.
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Bibliography
Álvarez, F., Georgiadis, M., Messéan, A. & Streissl, F., 2020. Assessment of the 2018 post‐market
environmental monitoring report on the cultivation of genetically modified maize MON 810 in the EU.
EFSA Journal, 18(10).
Bayer, 2020. History of Roundup. [Online]
Available at: https://www.roundup.ca/en/rounduphistory
Beraldo, P. P., 2017. Fighting Rural Poverty is Everybody's Mission. [Online]
Available at: https://www.cropscience.bayer.com/who-we-are/education-outreach/a/fighting-rural-
poverty-everybodys-mission
Bravo, K., 2014. Here’s How the World’s Largest Biotech Company Came to Be. [Online]
Available at: http://www.takepart.com/article/2014/03/27/monsanto-timeline
[Accessed 2020].
Brodwin, E., 2018. Business Insider. [Online]
Available at: https://www.businessinsider.com/monsanto-beyer-merge-drop-monsanto-name-2018-
6?r=US&IR=T
[Accessed 2020].
Corey, J. & Graves, L., 2016. Monsanto poised to take over the global food system. AMASS, 21(2).
Gillam, C., 2020. Monsanto Roundup & Dicamba Trial Tracker. [Online]
Available at: https://usrtk.org/monsanto-roundup-trial-tracker-index/
Global, A., 2020. New Mode of Action to Treat Superweeds. [Online]
Available at: https://www.croplife.com/crop-inputs/herbicides/new-mode-of-action-to-treat-
superweeds/
Lee, V., 2020. Poo, Worms and The Fight Against Climate Change. [Sound Recording] (Bayer Ag Science).
Letzer, K. & Gleklen, J., 2009. Monsanto Company (Farming), Washington DC: Arnold & Porter LLP.
Papademetriou, T., 2014. Restrictions on Genetically Modified Organisms: European Union, s.l.: Library of
Congress.
Reuters, 2009. Timeline: History of Monsanto. [Online]
Available at: https://www.reuters.com/article/us-food-monsanto-idUSTRE5AA05Q20091111
[Accessed 2020].
Rosenblatt, J., 2020. Bayer Fails to Settle Roundup Suits, Risking a Restart of Trials. Bloomberg News.