Global Strategy in the Life Sciences, Monsanto Corp.
Monsanto made a dramatic shift from its roots as an industrial chemical company to its new direction as a biotechnology company. This case explores the situation of Monsanto in the 1990s and the decision to 'bet the company' on this strategy. Monsanto in the early 1990s had major business activities in agricultural chemicals, specialty chemicals, pharmaceuticals, and food ingredients. The core phosphates and nylon businesses were not growing significantly, and the pharmaceuticals business (G.D. Searle) was only marginally profitable, with no new drugs in the pipeline. Monsanto management decided to pursue a focused strategy based on core technology and to move out of businesses that did not fit this strategy. Simultaneously, the company chose to pursue this strategy globally, with a target of 50% of sales outside the United States by the year 2000. The case describes this strategic shift and leaves the reader to analyze the pros and cons of the decision.
The case illustrates the kinds of problems that confront Fortune 500 companies at the end of the 20th century as they seek to transform themselves into organizations that can survive the 21st century. The case present enough background that student can evaluate Monsanto's decision to become a biotechnology company. Major competitors are described, such that a competitive analysis (using current information available on the internet) is quite feasible. The case can also be used to evaluate the internal decision-making process, and to consider the key factors that may lead to successful strategy implementation.