Soybean Industry 5 Forces Evaluation Essay Example | Topics and Well Written Essays - 500 words

Soybean Industry 5 Forces Evaluation - Essay Example Monsanto is the leading producer of soybeans which controls a large portion of the marketplace due to their strategy of producing genetically engineer seeds. They have an advantage over another competitor because their seeds produce higher yield and the company has implemented strategies such as creating seeds that can be used for crops that will not generate new seeds, thus the buyer has to come back to Monsanto to purchase seeds for future crops. The strategy gives the company higher supplier power. Another opportunity for this leader soybean producer is the fact their seeds need a special pesticide which forces buyers to purchase the seeds and the pesticide from them. The soybean production takes place in China, India, the United States, Brazil, and Argentina. In South American particularly in Brazil, the soybean production poses a major threat to the natural habitat due to deforestation. The United States has several competitive advantages due to the subsidies offered to soybean farmers and the $1.00 per gallon incentive when soybean is used in the production of biodiesel or ethanol. Newer entrants into this industry outside the United States are not likely. An issue that poses a threat to new entrants is the rising prices of soybean are making this product less profitable than before. In a matter of a few years, the price of soybeans has gone from 22 cents a pound to the current price of 56.4 cents a pounds (Chapman, 2008). The final price of a biodiesel gallon utilizing soybeans is about a dollar and a half.