Evaluating Environmental Opportunities

In Chapter 4 of Gaining and Sustaining Competitive Advantage, we take what we have learned in analyzing threats and extrapolate that into identifying opportunities.

Here, we will look at what strategies can be or are used by Monsanto to neutralize the various threats.
Neutralizing the threat of entry: To neutralize threat of entry, one would choose a strategy of erecting barriers to entry for other potential competitors.  For Monsanto, the threat of new competitors is lower than in some other industries because of product differentiation and prohibitive costs related to product development.

Neutralizing the threat of rivals: One method of finding an advantage over the competition is to evolve product based on customer needs.  The expense of genomic research and product development means it is vital to ensure product differentiation if possible.  Another method is forming strategic alliances, which Monsanto has also done in the past as discussed briefly in the last post.

Neutralizing the threat of substitutes:  The same strategies apply as thwarting the threat of rivals.

Neutralizing the threat of suppliers:  Monsanto does not rely on any major supplier.  For needs that they don't internally meet, they reach out to a diverse group of farmers.  They claim to strive to meet the social commitment they have to the communities they serve.  They also spread out globally.  For this threat to be significant, Monsanto would have to do something significant to turn multiple groups against them to be effected by this threat.

Neutralizing the threat of buyers:  Two primary methods of neutralization are product differentiation and seeking additional buyers.  Monsanto participates in  both of these measures.

One strategy that may benefit all of the these threats except the first one, is some PR overhaul.  While Monsanto's website looks very "Kumbaya", their press is often anything but!  If Monsanto wants to truly optimize their competitive advantages, having a public perception of benevolence and ethic conscience would go far.  Not only do they have to be honest and forthcoming with their direct customers in the farming community, but the end products of their seeds are the general public, and they must be supportive as well or the farmers will not want to grow their product.