Monsanto (NYSE:MON) has been on the defensive ever since Roundup came off patent, and it isn't only from cheaper products competing against them, as that was expected.
The major problem is their inability to get premium prices on their new products, which DuPont (NYSE:DD) has especially taken aim at, putting the question to farmers and doubts in their minds if they really need all the extra traits offered by Monsanto.
DuPont is offering competitive products with far less traits, but also at a better price.
It's similar to how many bells and whistles a tech product can add to justify a higher price. Eventually that argument is no longer convincing, and consumers or businesses buy on price rather than an endless array of added bells and whistles, which most probably don't use.
At least that seems to be the strategy of DuPont in their battle with Monsanto.
For Monsanto, they need to convince farmers the added traits of their new seeds are worth the added cost, even though they've had to cut their prices far below what they originally charged for them.
With some patience this will change, as when crop prices rise, historically farmers haven't minded paying the extra cost, but in tighter market it becomes more of a commodity business, and in that regard Monsanto can't compete, and will continue to struggle until prices rise again.
It seems Monsanto has to regroup and promote the strength of their product against competitors, especially after lowering prices. That means focusing on the added value of their seeds against their competitors, where they definitely have an edge.
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