Highlights
Task 1 – Formulate a Research Proposal
1.1 Consider and identify a valid area for research to support the strategic development of a business area [LO1 AC 1.1]
I work for the US multinational corporation Monsanto which is a Fortune 500 company with a total turnover of US$ 14.8 billion. It employs more than 18.000 people and is active in 66 countries worldwide. The head
quarter is located in St Louis Missouri, United States. The business is structured in two segments; Seeds and Traits (consists of the companys global seeds and traits business, and genetic technology platforms - including biotechnology, breeding and genomics) and Crop Protection (consists primarily of agricultural and industrial, turf and ornamental herbicide products). The seed business is divided into a row crop segment and a vegetable segment (MonVeg).
The Row crop seed and trait segment is the largest with an annual turnover of approximately US$ 9.5 billion and is focusing mainly on the development, production and selling of varieties of Agricultural crops globally. Important crops are soy bean, corn and cotton. MonVeg, with a yearly turnover of approximately US$ 821 million, is focusing on the development, production and selling of vegetable varieties of 23 different crops. Tomatoes are globally by far the most important crop. The Total vegetable seed market is approximately US$ 4 billion; tomatoes take 25% of it.
The Crop protection segment, with a yearly turnover of approximately US$ 4.5 billion, is focusing mainly on the production and sales of the Round Up herbicide as per Monsanto 2017 annual report. The revenue model that is applied by MonVeg and competition, to generate revenues for the Glasshouse segment is based on invoicing the number of supplied seeds to the customer. An important aspect of this model is that, as seeds are living organisms,
not all seeds will result in a useable plant. To limit the risk for the customer, the seed company guarantees a minimum percentage of useable plants of 70% for tomatoes. However commercial batches often are delivering higher percentage useable plants.
Furthermore, the varieties are becoming more vigorous. This gives the customer/grower the possibility to plant less plants per m², and keeping more shoots per plant. Both aspects are resulting in the customer purchasing less seed and so negatively affecting the revenue stream for MonVeg.
Aim
The goal of the research is the following: “Is the current glasshouse revenue model still the best model for Monsanto Vegetables business, or should we change the model in such a way that we can more effectively capture the value of our products and at the same time adding value to our customers (growers and plantraisers)”. Ethical behaviour is the basic condition for all our actions and activities.
Research questions:
1. Describe and value the pro’s and con’s for Monsanto, the plantraisers and growers of the current revenue model.
2. Define and describe the conditions and demands the revenue model should contain (including legal boundaries).
3. Research for different types of revenue models in literature and practice.
4. Define new revenue model.
5. Define implementation method and make recommendations regarding implementation plan.
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