Monsanto and The Global Water

Treatment Industry
Industry Structure Worksheet

(Ray Suutari of Wilfrid Laurier University)

Assignment Questions

What is the central problem the company face?

Who own the problem?
Please fill out the Worksheet on Industry
Attractiveness on Global Water Treatment Industry
based on the available segments in the reading.

Considering the aggregated drinking water treatment

segment, how does the attractiveness of the global water
treatment according to:

The incumbent
The new entrant Monsanto

What are the utility and limitations of Porters model?

Based on your analysis, what suggestion would you
make to the owner of the problem?

Threats of New Entrants

Yes
(+)
1. Do large firms have a cost or performance advantage in your
segment of industry?
2. Are there any proprietary product differences in your industry?
3. Are there any establish brand identities in your industry?
4. Do your customers incur any significant costs in switching suppliers?
5. Is a lot of capital needed to enter your industry?
6. Is serviceable used equipment expensive?
7. Does the new comer in your industry face difficulty in accessing
distribution channel?
8. Does experience help you continuously lower costs?
9. Does the newcomer have any problem in obtaining the necessary
skilled people, materials or suppliers?
10. Does your product or service have any proprietary features that give
you lower costs?
11. Are there any licences, insurance or qualifications that are difficult to

No
(+)

Bargaining Power of Buyers

Yes
(+)
1. Is there a large number of buyers relative to the number of firms
in the business?
2. Do you have a large number of customers, each with relatively
small purchases?
3. Does the customer face any significant costs in switching
suppliers?
4. Does the buyer need a lot of important information?
5. Is the buyer aware of the need for additional information?
6. Is there anything that prevents your customer from taking your
function in-house?
7. Your customers are not highly sensitive to price.
8. Your product is unique to some degree and has accepted
branding.
9. Your customers business are profitable
10. You provide incentives to the decision-makers.

No
(-)

Threats of Substitutes
(Other products or services that perform the same jobs as yours)
Yes
(+)
1. Substitutes have performance limitations, which do not completely
offset their lower price, or their performance advantage is not
justified by their higher price.
2. The customer will incur costs in switching to a substitute.
3. Your customer has no real substitute
4. Your customer is not likely to substitute

No
(-)

Bargaining Power of Suppliers

Yes
(+)
1. Your inputs (materials, labor, supplies, services, etc.) are standard rather that
unique or differentiated.
2. You can switch between suppliers quickly and cheaply.
3. Your suppliers would find it difficult to enter your business.
4. You can substitute inputs readily.
5. You have many potential suppliers.
6. Your business is important to your suppliers.
7. Your cost of purchase does not have a significant influence on your overall costs.

No
(-)

Determinant of Rivalry Among Existing

Competitors
t
1. The industry is growing rapidly.
2. There are few incumbent competitors.
3. The industry is not cyclical with intermittent over-capacity.
4. The fixed costs of the business are relatively low portion of total
costs.
5. There are significant product differences and brand identities
among competitors.
6. The competitors are diversified rather that specialized.
7. It would not be hard to get out of this business because there are
no specialized skills and facilities or long-term contract
commitments.
8. Your customer would incur significant costs in switching to a
competitor.
9. Your product is complex and requires a detail understanding on
the part of your customer.
10. Your competitors firms are all approximately the same size as
yours.

Yes
(+)

No
(-)

Overall Industry Rating

Favorable
Threats of new entrants
Bargaining power of buyers
Threats of substitutes
Bargaining power of suppliers
Intensity of rivalry among competitors

Moderate Unfavora
ble