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.