a) Provide a very brief summary of the case.

Monsanto is analyzing the Water Treatment Industry as a potential new market. They discuss in detail: applications, types of products, and services already provided during that time. The industry can be somewhat difficult to define. It seems better to determine the industry by the customer, in this case it is the end – user or consumer of the drinkable water. Then in 1999, as a result of increased demand for safe drinking water globally, Monsanto acquired a few firms that had experience in the water treatment industry, with specific knowledge and technologies, which subsequently would better enable Monsanto to break into the water treatment market and be competitive immediately by offering a broad complementary package of water treatment products and services.

b) Consider the domestic drinking water segment of Monsanto’s business. How best can that industry be defined? What are other ways of conceptualizing that industry? Will different conceptualizations lead to different strategies?

The domestic drinking water segment of the water treatment industry is extremely diverse and fragmented with many different firms operating in a wide variety of ways to get water into consumer’s hands. The case really breaks the drinking water segment down into two different categories, municipal and residential water treatment, the segments are determined by the delivery method to which consumers get drinkable water. Monsanto has already positioned themselves, through a series of acquisitions, to be on the clean water treatment side of the industry, as opposed to waste water treatment. More specifically, to easily compete in the municipal drinking water segment. Further development and focus is still needed on the residential water industry. For instance, Bottled water is considered a substitute for both municipal and residential water treatment products, but 1 in 4 bottles contains water from a municipal source. Furthermore, the bottled water industry has conglomerates from the beverage industry competing in the market. This signals to me that the domestic end user doesn’t mind as much about the delivery method of clean water, just so long as there is clean water available. Also of importance is the International markets, there is potential for greater growth globally it would seem, specifically, in the municipal water treatment industry through the sales of equipment and chemicals to treat water.

Keeping in mind also that the discovery of new water sources has been slowing down, a different way of conceptualizing the industry would be to consider water speculation and discovery. Monsanto could invest in R&D to pioneer new ways to find and collect clean water. This could develop into a much different strategy considering it could also include possible entry into the waste water treatment industry. There are also the geographic hurdles to getting drinking water to inhabitants to consider, and not all water treatment processes are best suited for every environment. Monsanto does have the advantage of operating in many different countries, and one possibility is to supplement its municipal water contracts is by also supplying bottling water, possibly turning a threat into a potential opportunity.

c) Pick the definition of the industry that is most appropriate above. In that industry, what are the three key drivers of success? Explain your answers.

The industry definition to best describe Monsanto’s water treatment segment is the clean water treatment industry. Key drivers of success would be vertical integration from water source to market, patent technologies, and consumer trust. Monsanto has the ability to transform an industry with the new acquisitions in patented technology. They want to touch that water as many times as possible in the treatment process, to let the water flow through its equipment. This means they should integrate the new technologies that they have acquired into the water treatment process, either by replacing older technologies, or integrating it into existing systems to work in conjunction with their chemical treatments plants. Furthermore, acquisition of water sources could play a key in developing competitive advantage.

NeoPets, Inc. Case Analysis

NeoPets, Inc. is an internet start-up that had struck gold in a time when many of its sister companies were feeling the pain of a market correction from asset hyper-inflation and subsequently shutting their doors. They clearly have the competitive advantage by being first to market with “immersive advertising”. Immersive Advertising is a key factor that has helped lead to their success over other online advertising firms that just used traditional banner and pop-up advertisements. Their website is #1 for “stickiness”. The data from Nielsen/Net Ratings showed the amount of time users spent on the site was over 7 hrs. So now, not only have they developed a new proprietary advertising model, but they had also developed an online environment that captured a non-typical massively multiplayer online game, or MMOG that created a loyal online social community. Finally, the nature of NeoPets audience was very unique. NeoPets audience consisted of predominantly older youth and younger teens that had to be knowledgeable or computer savvy to some degree in order to be able to interact on NeoPets website. NeoPets also was unique in the fact that the majority of their user base was female, which was unusual for many online gaming communities. The combination of their audience and advertising model made NeoPets a very attractive service for firms looking to market their products online using an industry that had pretty much collapsed from within.

Also a very important issue to NeoPets, for a number of reasons, was globalization. First off, they have created a niche marketing strategy in an IT based industry and developed a very large and loyal user audience which they’ve managed to keep to themselves, so far. One of the threats posed by globalization is that there are already other media companies that have similar product offerings already out in the offline market in other countries that haven’t developed their product into an interactive online media such as NeoPets. Similar kinds of games and/or cartoons in the offline markets already exist that, in essence share several similarities to NeoPets in terms of storylines, characters, and play style. These included Tomagotchi or Giga pets, both a hand-held game with similar a similar play style to that of NeoPets in that the player had to take care of a virtual pet. Also, Dragon Ball Z which was an anime cartoon that consisted of collecting pets with special powers and has a large fan base following, the cartoon has spawned the creation of a plushies, a card game, and movies; much like NeoPets’ Doug Dohring hoped to do with the NeoPets. Albeit these few examples do not use an as enriched or as dynamic gaming/advertising medium as NeoPets does online, but they could pose a threat if they moved over to the internet arena because of their already existing popularity offline, they would be in a position to compete directly with NeoPets for internet users.

Mr. Dohring wants to control the growth of the company and the image of NeoPets. One of the biggest opportunities for NeoPets is that the company is still young and in a rapid growth stage. NeoPets is still reinvesting its profit back into the company to fund growth and is very agile, and even though it is self funded at this point, due to the competitive nature of the internet industry and rapid rate of technological change, they could easily be in international. Furthermore, a joint venture might not be what is best for long-term growth, remember Dohring also sees potential by expanding globally into markets where his current multinational corporate customers are already doing business and has a strong desire to turn NeoPets into a franchise and in that aspect to bring Green Dot on as a minority equity holder would also allow NeoPets to continue to control its own growth and intellectual properties as it sees fit. Globalization, does offer another option there is an opportunity for merchandising and/or co-branding further, to take the Kraft Mac’n’Cheese print ad even further, to continue to expand “virally” through companies that they already work with. The company, again, is very young and spread mostly through the internet by word of mouth but has already achieved so much popularity. Apply the same viral principal to NeoPets international growth strategy, greater advertising revenue could be generated through co-branded merchandise launch with a multinational firm that 1 is already a client, and 2 also operates in the same geographic markets that NeoPets wishes to enter into as well.