MONSANTO SUSTAINABLITIY MODEL

Name
October 30, 2018
 Contents

• Recent context

• Base case scenario

• Potential routes & our recommendation

• Action plan
 Contents

• Recent context

• Base case scenario

• Potential routes & our recommendation

• Action plan
Recent Context

NEGATIVE HEALTH CONCERNS FOR GENETICALLY MODIFIED SEEDS(GMS)

ARE IN RISE AND RISKING THE FUTURE OF MONSANTO

Expected deaths related to GMS consumption

10,000 There is a high expectation
9,000 of deaths in relation to
8,000 GMS Products
7,000
Number of people

6,000 Key Drivers:

5,000
4,000 - Weak standards
3,000
- Limited regulations
2,000
- Hard to see recent effects
- Detoxifying threat
1,000
0
2018 2019 2020 2021 2022 2023 2024
Years

US Global

Values are estimated

3 Jasmine Metley & Daghan Ozgen | Monsanto Case

Recent Context

ENVIRONMENTAL THREADS OF GMS PRODUCTION ARE DRAWING MORE

ATTENTION OF SOCIETY EVERYDAY WHICH PUT STRESS ON MONSANTO

Cases that Monsanto accused of

environmental reasons
120
Key Drivers:
100
- Higher resistant weeds and
bugs
Number of cases

80
- Detoxifying threat
60
- Concerns on the fragile habitats
40 - Global Warming
- Climate Conditions
20

0
2012 2013 2014 2015 2016 2017 2018
Years

US Global

Values are estimated

4 Jasmine Metley & Daghan Ozgen | Monsanto Case

Recent Context

SHAREHOLDERS LOSING INTEREST AND VALUE ON MONSANTO ARE

PROVEN BY SHRINKING STOCK RATES

$700 Monsanto Stock Trends

650

600

550
Strong criticism spread
500 out within the society
leading a negative spike
450

400
Monsanto Co (MON)
350
Without any action, free floating
of MON will continue on the
300
stock market
1.4.10 5.13.10 9.21.10 1.28.11 6.8.11 10.14.11 2.24.12

Values are estimated

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 Recent Context

UNPLEASENT CASES AROUND THE WORLD TARGETING MONSANTO AND

THIS SUPPORTS THE NEGATIVE PERCEPTION FOR THE SHAREHOLDERS

Total cases around the world

2014 2015 2016 2017 2018 Monsanto is accused

of variety of cases all
Bribing 10 12 25 26 23 around the world
Cases
which corporate
taking no action
Anti- 50 42 48 80 95
competitive against.
cases

Serious sentence risks

Patenting 756 553 321 424 747
Cases that can lead to high
perception losses or
Labour 591 595 614 675 712 fine costs.
Rights

Values are estimated

6 Jasmine Metley & Daghan Ozgen | Monsanto Case

 Contents

• Recent context

• Base case scenario

• Potential routes & our recommendation

• Action plan
Base Case Scenario

GMS MARKET IS ON THE RISE, HOWEVER THE MONSANTO MARKET SHARE

IS EXPECTED TO DECREASE WITHOUT ANY ACTION

Global Area of Biotech Crops, 7 Years, Expected Revenue of Monsanto

2010 to 2017
16
13,5 11
14

12 9,5

Revenue in Billions
10 8,25
8

2
Area of Biotech
crops is
0
gradually
2016 2017 2018 2019
increasing
Years
Values are estimated

Source: ISAAA, Briefs Brief 53 , Global Status of Commercialized Biotech/GM Crops in 2017

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Base Case Scenario

SHAREHOLDERS WILL NOT INVEST INTOA COMPANY THAT HAS A

SHRINKING PROFITABILITY PERFORMANCE
Market is growing around
5% per annum

Net income of Monsant in million U.S. Dollars

Huge profit opportunity

lost

Income decrease is
expected to continue
around 25%

Source: Statista, Monsanto Study dossier, 2017 Page 25

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Base Case Scenario
OPPORTUNITIES SHOULD BE TAKEN INTO ACCOUNT TO OVERCOME THE
THREATS OF THE SITUATION
Opportunities for Growth
• An increase in population is leading
to the need of more food
• Rise of Hunger
• Developing agriculture production
• Many countries that have potential
room for improvement in agriculture
• Global Warming
• Potential new markets
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Potential Threats
• EU is resisting GMS products
• Require labeling the product
• Death of animals
• Evolving weeds and insects with more
resistance
• GMS is carried out to distant locations
via insects and birds
• Chinese competitors are rising
• Concerns about moral and safety
implications of food
 Contents

• Recent context

• Base case scenario

• Potential routes & our recommendation

• Action plan
Potential routes & our recommendation

SOLUTIONS CAN BE ADDRESSED IN THE FOLLOWING THREE TOPICS

In the recent situation a

TOPIC ONE proactive approach
should be considered.
• Monsanto can continue with their recent scenario Even if Monsanto picks
without taking any further action not taking any actions
option against these
threats, future
consideration and
TOPIC TWO forecasts should be
estimated for the sake of
• Focusing on marketing activities to address the the sustainability of the
concerns conceptualized by society regarding company.
Monsanto

TOPIC THREE

• Focusing on the financial activities to improve

profitability performance

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Potential routes & our recommendation

OUR RECOMMENDATIONS WILL CONSIST OF A COMBINATION OF BOTH

MARKETING AND FINANCIAL ACTIVITIES

Marketing Activities Financial Activities

- Providing new sponsorships - Announcing Crop Tracking Technology

+ Public health organization and events + Organize training and events for farmers to
+ Supporting environmental activities maximize usage

- Expansion into new focus markets &

- Creating a new advertising campaign
products
+ Announcement of supporting GMS labelling
+ Potential in Spain, South Africa, Kenya,
+ Emphasize on EPA & FDA scientific Nigeria
approvals + New potential crop: Corn(Maize)

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Marketing Activities - Providing new sponsorships
MONSANTO SHOULD START SUPPORTING ENVIRONMENTAL AND HEALTH
ORGANIZATIONS, ACTIVITIES AND EVENTS TO INCREASE BRAND LOYALTY
AGAIN

Percentage of consumers who are loyal to brands that sponsor

good causes in Canada as of Sept. 2015
Being role model brand
Perception rebuilding starts with acting
in pacemaker roles within the society

45% of the people have

stronger perceptions
and more belief on
companies who sponsor
good causes

Source: Statista, Percentage of consumers who are loyal to brands that sponsor good causes in Canada as of Sept. 2015, https://www-statista-
com.libaccess.senecacollege.ca/statistics/426564/canada-consumers-loyal-brands-sponsor-social-causes/

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Marketing Activities - Creating a new advertisement campaign

PEOPLE STRONGLY CARE ABOUT THE LABELING BUT THEY DO NOT KNOW
WHY. SO WHY DON’T WE LABEL AND ANNOUNCE IT THAN?

Do you agree that all products containing GMOs Share of consumers who believe GM food is healthier
should labeled as such? than non-GM food in the US as of 2016

Nearly 60% believes GM food is either

90% of the population wants GM labeling
neutral or better for the consumers
on their product

Source: Statista, Genetically Modified Crops dossier, 2018

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 Marketing Activities - Creating a new advertisement campaign

BILLBOARDS ARE THE BEST WAY TO SPREAD OUR MESSAGEACROSS

SOCIETY

Most accepted
advertisement
platform and suitable Consumers favorability towards selected types of ads in the US as of 2017
for our case

Key messages to emphases

in ads
• Encouraging labeling
• Emphasising EPA and FDA
approvals to improve the
brand trust
• Highlighting environmental
and public health
organizations sponsorship

Source: Statista, ADVERTISING CONSUMPTION AND PERCEPTION Report, 2018

Wildfire LLC, https://wildfireideas.com/wp-content/uploads/2018/01/LowesOOHDelicious.jpg

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Financial Activities - Announcing Crop Tracking Technology
MONSANTO WILL INTRODUCE CROP TRACKING SYSTEM TO FARMERS IN
ORDER TO CONTINUE INCREASING VALUES & PROFITABILITY FOR
FARMERS

Support farmers Precision on

Ability to monitor
Estimate crop with extra measurements
seed traits with big
performance weather, soil and only available with
data
crop information 1st gen seeds

As technology advances,
there are new capabilities
to collect visual and
measurable data around
crop lands
By evaluating this big
data and combining
actual data with historical
trends can precisely
estimate next yields
Farmers will be looking These information will
for extra information to only make sense with the
understand what is known data which means
going on at their farms. it is only valid for the first
By tracking technology generation seed. This
they will have continuous way farmer will be
information flow that encouraged to buy 1st
they can easily supply generation seeds each
the needs of the crops. time in order to estimate
their performance
accurately.

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Financial Activities - Announcing Crop Tracking Technology
AFTER THE ANNOUNCEMENT OF THE TRACKING SYSTEM IT IS EXPECTED
THAT THE PROFITABILITY WILL INCREASE RELATING TO THE LONGER
LIFETMIE VALUE OF FARMERS AND INCREASED PURCHASES

Forecasted Net Income

90

80

70 Since technology is increasing so

will customer retention. With

Potentail increase on
Billions in US dollars

60
deeper knowledge of each

income ~80%
50 farmers crops and encouraging
them to purchase new seeds for
40 80 each harvest, it is expected that
30
profitability will increase
50 exponentially.
20

10
25
13.5 16
0
2018 2019 2020 2021 2022
Years

Values are estimated

18 Jasmine Metley & Daghan Ozgen | Monsanto Case

Financial Activities - Expansion into new Focus Markets and Products
THERE ARE POTENTIAL MARKETS AROUND THE WORLD AND EXPANDING
BUSINESS TO THOSE MARKET WILL BRING MORE PROFIT ESPECIALLY IN
EUROPE

Biotech Maize area in the EU

Spain with the highest potential

in the EU can be a door opener
for the resisting EU market.

Monsanto should focus on this

market and start looking for
increasing opportunities within
this market.

Source: ISAAA, Briefs Brief 53 , Global Status of Commercialized Biotech/GM Crops in 2017

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Financial Activities - Expansion into new Focus Markets and Products

MONSANTO SHOULD FOCUS ON MAIZE CROPS AROUND THE WORLD

SINCE SOYBEAN AND COTTON ADOPTION RATES ARE NEAR SATURATION
Global Adoption Rate% for principal Global area of biotech crops 1996 to 2017
biotech Crops 2017

There is a great potential

worldwide for maize.
Focusing on marketing
and sales activities for
maize will enhance
efficiency and profitability
of the company.

IMPORTANT TAKEAWAY
Maize will be the new player of the global market. If Monsanto take adventage of the situation, they can maximze profits.

Source: ISAAA, Briefs Brief 53 , Global Status of Commercialized Biotech/GM Crops in 2017

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Financial Activities - Expansion into new Focus Markets and Products

AFRICA IS THE MOST PROMISING MARKET BY MEANS OF GROWTH ON

ECONOMY AND GREAT MAIZE POTENTIAL IN SELECTED COUNTRIES

Monsanto should take advantage of

these great potential lands

Potential countries
with large maize
lands.

Source: ISAAA, Briefs Brief 53 , Global Status of Commercialized Biotech/GM Crops in 2017

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 Contents

• Recent context

• Base case scenario

• Potential routes & our recommendation

• Action plan
Action Plan

SETTING THE GOALS AND ACHIEVING THE DESIRED OUTCOMES

Goals Outcomes

• Better shareholder • Better moral obligation

perception to society
• Preserving corporate • Increase food production
values • Conserve more resources
• Market leadership • Improve lives of farmers
• Strengthening Customer • Stronger sustainable
Relations future of company

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Action Plan

MONSANTO SHOULD EXECUTE AN IMPLEMENTATION PLAN TO TAKE

ACTIONS

Research and Source Secure and finalize all

Providing new Actively participate in
all potential events sponsorship
Sponsorship and organizations agreements
all sponsored events

Begin manufacturing
Labelling Products Design new labelling Announce initiation
& distribution

Creating the Ad Sourcing out Designing the Publish the Post campaign
Campaign billboards campaign campaign feedback

Executing training and

Introduce the Create a Seminar Provide a support line
Crop Technology technology plan intro seminars for
for ongoing support
consumers

Source potential
Investigate specific Initiate a marketing
Market Expansion countries looking to
market threads
maximize crop yields priority list

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Action Plan

TIMECHART FOR THE ACTION PLAN

J F M A M J J A S O N D

New
Sponsor

Labelling

Campaign

Crop Tech.

Market
Expansion

25 Jasmine Metley & Daghan Ozgen | Monsanto Case

 THANK YOU

Please Contact us for Further Information:

Jasmine Metley - jmetley@myseneca.ca

Daghan Ozgen - dozgen@myseneca.ca
ARGUMENT MAP
Monsanto can maintain and develop current shareholder
interest to generate a surplus in profit through the
marketing and financial activities.

Marketing activities to
Financial activities to
address the concerns
improve profitability
conceptualized by society
performance
regarding Monsanto

Providing new Creating a new advertising Expansion into new Focus Announcing Crop Tracking
sponsorships campaign Markets & Products Technology

Organize training and

Supporting environmental Emphasize on EPA & FDA New potential crop:
events for farmers to
activities scientific approvals Corn(Meize)
maximize usage

Public health organization Announcement of Potential in Spain, South

and events supporting GMS labelling Africa, Kenya, Nigeria

27 Jasmine Metley & Daghan Ozgen | Monsanto Case

BCQA

• Background: A company that creates genetically modified seeds to improve higher

yields and secure food for the future. Backlash was brought upon by critics who
claimed that GMS was unhealthy and not safe.

• Catalyst: Monsanto is losing shareholder interest and they need to earn it back for
the future of the company due to the critic’s response.

• Question: How Monsanto draw shareholders attention back.

• Answer: Monsanto should start implementing new activities to show that they
share shareholder's common values. This could be done through a focusing on the
marketing strategies as well as the financial activities in order to increase customer/
shareholder retention and profit

28 Jasmine Metley & Daghan Ozgen | Monsanto Case