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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


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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.


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