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The Monsanto Model: Creating lasting value in the Indonesian farming industry

Monsanto can help increase the world’s food supply and better the lives of farmers in developing countries through the adoption of new technologies.
by

Gabriel Sayegh

on 15 November 2013

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Transcript of The Monsanto Model: Creating lasting value in the Indonesian farming industry

Improving the lives of farmers
Phase 1
Phase 2
Phase 3
Long-Term Growth
Monsanto - Enriching Indonesia
Three Areas = Three Phases
Our "Win - Win - Win" Solution Strategy
Local Farmers
Our Customers
Partner Organizations
Governmental and Non-Governmental
Suppliers
The Value Chain
Identify Target Groups
Success Requires a Focused Approach
Local Farmers
Partner Organizations
Suppliers
Long-Term Market Investments
Local Farmers
Investments in Local Resources
Partner Organizations
Continued resource provision and promotion of increased farming subsidies
Suppliers
Monsanto Representative Program
Long-Term supplier education on benefits of Monsanto products for farmers
Monsanto
Increased independence among all groups frees up resources to scale this system
Monsanto's Opportunity
Local Farmers
Partner Organizations
Suppliers
How else can we do this?
Alternative Strategy 1
Provide market with similar products to those currently used
Alternative Strategy 2
Replace current suppliers with dedicated Monsanto sales force
Alternative Strategy 3
Streamline education through Monsanto events
Risks Outweigh the Benefits In Each of These Cases
The Save Face Method
The 'Market Buy-Out' Method
The 'Go It Alone' Method
Indonesia
Pilot Country
Asia-Pacific Island Countries
Scale to similar-size countries and economies
India
Large scaling test to a larger country in both production and economic status
Africa
Application of scaled process applicable to the next untapped marketplace
Provide the products and resources to positively impact farmers' lives
Make good on promise to produce more, conserve more, and improve lives
Venture Model
For Profit and Non-Profit
Upstream and Downstream
Agricultural Innovators
Distributors and Retailers
Business to Customer Face of Monsanto
Monsanto's External Stakeholders
Introductory Actions
Criteria Rubrics for Target Group Selection Attached in Appendix III
Full Business Model Detail
Attached in Appendix I
Looking for 100 farmers,
15 partner organizations,
and 10 distributors/retailers
Target group must be willing to learn/adapt and previously established
Target group must be teaching focused and have local governmental ties
Target group must be willing to negotiate prices/credit terms and established enough to help bear costs
Development and Expansion
Evaluation and Adjustments
Scale Globally
Risks
Benefits
Inability to find Government or NGO Support
Incentives Program
Subsidies
Credit Assist
Continued Education
Understanding Our Focus
Implementation of Model Through Phase Solution Approach
Venture Financials
Cost Associated With This Journey
Full Estimated Expense Outline Detail
Attached in Appendix II
Local Farmers
Partner Organizations
Suppliers
Immediate Needs are Financing and Knowledge
Immediate needs are educators:
healthcare, financing, and general
Immediate needs are trainable suppliers who are willing to extend credit to farmers
Initial Investment:
$2,050,000
Estimated Timeline:
Six Months
Investment:
$1,000,000
Estimated Timeline:
Twelve Months
Investment:
$2,000,000
Estimated Timeline:
Six Months
Promotion Program
Benefits of biotechnology
Government aid for farmers
Training Program
Expand skills trained
Focus on relationships
Increase involvement
Couple with healthcare and general continuous education programming
Encourage partner organizations to work independently with farmers going forward
Establish performance reward metrics for each supplier in the value chain
Branch out in this and new markets;
adjusting for what has and has not been successful
Inability to communicate across the entire value chain
Low farmer adoption rate
Changing our reputation by
building trust in the brand
Scalable Solution to improve the lives of farmers and increase food supply
low investment and early output increases revenues and profits for Monsanto
These Alternatives Are NOT Scalable
'Save Face' Requires Time & Money
Provides low product efficiency
'Market Buy-Out' Deteriorates Reputation Further
Dangerously expands our downstream operations
'Go It Alone' Opens Financial Liability
Spreads company into providing services far outside expertise
None More Scalable or Feasible Than the Win-Win-Win
Final Recommendation
"Play nice" with local government for public relations
Invest R&D in organic, non-modified seeds to gain market share
Create streamlined distribution process internally
Lower cost structures provide lower prices to farmers directly
Expand vertical market involvement
Create local experts farmers can trust to rely on for information
Implement the "Win - Win - Win" Solution Strategy
Realistic, Scalable, & Innovative:
3 phase, 3 stakeholders, & 2 years
15% ROI in a 2 Year Period
13% Increase in Revenues
More Production
More Conservation
Improve the Lives of Farmers
11% Increase in Profit Margin
Little potential brand recognition
Potential market monopoly
Solely benefit of not relying on partner organizations
Appendix I
Appendix II
Appendix III
CREDITS

Whitney Johnson

Gabriel Elias Sayegh Jr.

Vinay Nenwani





We would like to express the deepest appreciation to our college, college Professor and MBA staff for their support in completing the project. They continually and persuasively conveyed a spirit of adventure in regard to research and technology, and an excitement in regard to teaching. Without their supervision and constant help this video would not have been possible.
[Thank you Al-Jazzera for providing footage for the beginning of our video]
Full transcript