Essay About Niche Market Opportunities And Dairyland Case Study

Dairyland Case Study
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Company Analysis
Strengths:
Commitment to R&D and innovation
Leader in the development of STS varieties
Proprietary research in alfalfa, corn, and soybeans
Premium price leading to higher margins
Products fare well in trials
Largest alfalfa breeding program in industry
Corn growing steadily
Customer focus
Weaknesses:
No definitive, strong relationship with either biotechnology company
Family ownership may lead to a lack of new strategic vision
Not enough focus on specific traits
Little experience outside of local markets
Opportunities:
Round-Up growth
Partnership with Monsanto
Full participation in Monsantos rebate program
No dominant supplier in alfalfa (product being one of Dairylands strengths)
New Dairyland varieties demonstrate resistance to particular plant diseases (niche market opportunities)
Threats:
Competition is intense in all three product categories
Competitors like Novartis and Pioneer not having to pay Monsanto the technology fee have greater funds for R&D
Market share growth of Round-Up–competes directly with STS
DuPonts more tight relationship with Dairylands key competitor Pioneer
STS markets may become less attainable due to Monsantos rebate program
Farmers are becoming less brand loyal and more economically focused
Higher price may look unattractive to the cost-conscious farmers
Problem Statement
How can Dairyland continue to provide the best value to its customers and profitably compete in a changing and intensely competitive seed industry?
Alternatives
End the DuPont relationship and focus solely on Monsanto
End the Monsanto relationship and focus solely on DuPont
Proceed with both of the current technology supplier relationships and focus
R&D more on specific traits, rather than high-yielding genetics alone.
Critical Issues
Profitability
Satisfied farmers
Costs
Growth
Consistent with commitment to innovation and new product development
Analysis
Alternative I
Full participation in Monsantos incentive programs would result in higher margins.
95% of farmers using Round-Up experienced “satisfaction” with the product; this may lessen as farmers have more data and experience with product.
Offers up-front cost savings.
High projected growth in the Round-Up market. 50% market share projected for 1999. From introduction, market growth only limited by supply.
Wasnt licensed to market Round-Up until 1998–giving competitors opportunity to be first to market new product.
Alternative 2
No concrete effect on profitability.
DuPont is very active in promoting STS seed varieties and