Monsanto and the Global Water Treatment Industry

Monsant oandTheGl obalWat er  Tr eat mentI ndus t r y I ndust rySt ruct ur eWo Wor ksheet

( Ra ySuut ar iofWi l f r i dLaur i e rUni v e r s i t y )

 Assi gnmentQues t i ons   

What is the central problem the company face? Who own the problem? Please ll out the Worksheet on Industry Attractiveness on Global Water Treatment Industry based on the available segments in the reading 

!onsidering the aggregated drinking water treatment segment" how does the attractiveness of the global water treatment according to#  

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 The incumbent  The new entrant $ %onsanto

What are the utility and limitations of Porter&s model? 'ased on your analysis" what suggestion would you make to the owner of the problem?

 Thr eat sofNe w Ent r ant s  Yes (+)

( )o large rms have a cost or performance advantage in your segment of industry? * Are there any proprietary product di+erences in your industry? , Are there any establish brand identities in your industry? - )o your customers incur any signicant costs in switching suppliers? . Is a lot of capital needed to enter your industry? / Is serviceable used e0uipment e1pensive? 2 )oes the new comer in your industry face di3culty in accessing distribution channel? 4 )oes e1perience help you continuously lower costs? 5 )oes the newcomer have any problem in obtaining the necessary skilled people" materials or suppliers?

No (+)

Bar gai ni ngPowerofBuy er s  Yes (+)

( Is there a large number of buyers relative to the number of rms in the business? * )o you have a large number of customers" each with relatively small purchases? , )oes the customer face any signicant costs in switching suppliers? - )oes the buyer need a lot of important information? . Is the buyer aware of the need for additional information? / Is there anything that prevents your customer from taking your function in7house? 2 8our customers are not highly sensitive to price 4 8our product is uni0ue to some degree and has accepted branding 5 8our customers& business are protable

No (-)

 Thr eat sofSubs t i t ut es ( Ot herpr oduct sorser vi cest hatper f orm t hesamej obsasyour s)  Yes (+)

( 9ubstitutes have performance limitations" which do not completely o+set their lower price" or their performance advantage is not  :ustied by their higher price * The customer will incur costs in switching to a substitute , 8our customer has no real substitute - 8our customer is not likely to substitute

No (-)

Bar gai ni ngPowerofSuppl i er s  Yes (+)

( 8our inputs ;materials" labor" supplies" services" etc< are standard rather that uni0ue or di+erentiated * 8ou can switch between suppliers 0uickly and cheaply , 8our suppliers would nd it di3cult to enter your business - 8ou can substitute inputs readily . 8ou have many potential suppliers / 8our business is important to your suppliers 2 8our cost of purchase does not have a signicant in=uence on your overall costs

No (-)

De t er mi nantofRi v al r yAmongExi s t i ng Compe t i t or s t

( The industry is growing rapidly * There are few incumbent competitors , The industry is not cyclical with intermittent over7capacity - The 1ed costs of the business are relatively low portion of total costs . There are signicant product di+erences and brand identities among competitors / The competitors are diversied rather that speciali>ed 2 It would not be hard to get out of this business because there are no speciali>ed skills and facilities or long7term contract commitments 4 8our customer would incur signicant costs in switching to a competitor 5 8our product is comple1 and re0uires a detail understanding on

Yes (+)

No (-)

Ov e r al lI ndus t r yRat i ng Favorable

 Threats of new entrants 'argaining power of buyers  Threats of substitutes 'argaining power of suppliers Intensity of rivalry among competitors

Moderate

Unfavora ble