Worksheet 1 Key Facts
In this worksheet we will present a few key facts of the company we have chosen for our Strategic Business Plan. This will provide an indication of the company profile, on which we will build to write an accurate strategic business plan. In the table below we will present some key facts of the company as of December 31st 2015.
Trade name: Solynta. Legal name: Florere BV
Reference Date: 31 December 2015
Standard Industry Classification: 01.13.4
Legal Status: BV
Year of foundation: 2008
Sales: € 761,325
Founders: Hein Kruyt, Theo Schotte, Pim Lindhout, Johan Trouw
Net profit/(loss): (€1,037,081)
Headquarter: Wageningen, The Netherlands
Balance Sheet Total: € 3,358,562
Additional Location:
Rotterdam, The Netherlands
Number of employees:
Headcount: 33
Full Time Equivalents (FTE): 27
(sources: Florere B.V. financial statement 2015, Solynta.com)
To support the facts presented above, we have provided the balance sheet and the income statement of the firm below. These are both also as of December 2015.
(source: Florere B.V. financial statement 2015)
Taking the presented facts into account, we can conclude that the firm fits the criteria to be used for our Strategic Business Plan.
Worksheet 2 Company History
In the following worksheet, the history of the chosen company will be assessed. The chosen company, Solynta, is a Dutch startup with the ambition to change the entire potato production process and the worldone of its major goals is to fight hunger. Although Solynta is still not manufacturing and selling its product, there is already a lot to share about the history of this company.
To commence, some basic information about Solynta’s establishment will be displayed. In 2006, Solynta didn’t exist yet. However, in this year, research for potato seeds began at a company called De Ruiter. It wasn’t very successful at that time, as only 1 out of 5 potato breeding sorts was successful. Two years later, in 2008, Solynta was officially founded in Bergschenhoek, The Netherlands after a carve-out from Monsanto De Ruiter Seeds. The founders were Hein Kruyt, Pim Lindhout, Johan Trouw and Theo Schotte.
The products that Solynta areis currently developing and are wishinghoping to sell in the near future areis called hybrid potato breeded seedsing. These are seeds that are produced through pure homozygous parent lines and they accelerate the breeding process of potatoes. So, the benefit of Solynta’s products areis that theyit can produce potatoes faster, cheaper and with less environmental impact.
Furthermore, the company has experienced some major occurrences in the last ten years. The first significantbig occurrence that solyntathey went through was its foundingactually when Solynta was found. Despite the business idea already being there, it was still under Monsanto De Ruiter Seeds. After theis carve-out, Solynta became independent, which allowed them to develop as fast as they did. The followingnext major occurrence of Solynta was a true breakthrough. That breakthrough was that they got their first patent in 2010. Besides having the sole right to sell this product, this patent opened doors for Solynta because it lead to their first financing round and to various collaborations and grants. The timeline on the rights gives a clear view of Solynta’s major occurrences (source: Project Team Solynta).
Finally, Solynta has had quite some major events, despite its short 7-year existence. It’s a startup in a unique market with many opportunities, where it wishes to expose its product to the world in the upcoming years. If Solynta’s products becomes an actual success, not only will they profit from it themselves, but millions of people around the globe will as well.
Worksheet 3
Kind of products/services they provide
Hybrid potato breeding
A potato that is enriched with new traits by crossing and selection. Such potatoes can be developed in three years. With this breeding technology they would like to develop new varieties, which yield more, under harsher conditions, need far less pesticides and fungicides and with beneficial traits for consumers, farmers and processors.
There is only one product group in my opinion.
Solynta is still in the development stage, so at the moment they have no steady customers. However, it is business-to-business; Solynta sells their products to other companies, they can express their wishes so Solynta can adjust their seeds to it. Eventually the buying company’s can use this seeds to grow their potatoes. The companies use this product because they can exactly demand the size, the weight and the resistance of the potatoes of being. Solynta generates income because they sell their potato seeds to other businesses.
Worksheet 4
Introduction
The objective of this worksheet is to show how ownership in Solynta is divided. In order to deduce who the major decision makers in the organization are.
Major Shareholders
67% of Solynta’s shares are divided amongst the founding members, who also form Solynta’s top management. The remaining 33% was liquidated during the first financing round in 2014 and is distributed evenly over a group of individual investors and a venture capital firm.
Ownership of Solynta is distributed as follows:
Name
Involvement
% of total
shares held
Hein Kruyt
Management
16.75%
Johan Trouw
Management
16.75%
Pim Lindhout
Management
16.75%
Theo Schotte
Management
16.75%
PPM Oost
Investor
(Venture Capital Firm)
16.5%
Various Individuals
Investors
(Individuals)
16.5%
Total
100%
Solynta’s Top management
Name
Years in Company
Job Title
&
Description
% of total
shares held
Hein Kruyt
9 Years (Co-Founder)
CEO
Overseeing all operations and business activities of Solynta to ensure they produce the desired results and are consistent with the overall mission and vision.
16.75%
Johan Trouw
9 Years (Co-Founder)
Director Operations
Planning and monitoring the day to day running of Solynta to ensure smooth progress.
16.75%
Pim Lindhout
9 Years (Co-Founder)
Director R&D
Responsible for ensuring that Solynta meets its objectives for researching and developing new products or technologies and improve existing products.
16.75%
Theo Schotte
9 Years (Co-Founder)
Director of Breeding
Responsible for the crossing of existing breeds to discover new ones.
16.75%
Conclusion
Solynta’s decisionmakers is the management, since management controls 67% of the company combined and controls more than any other shareholder individually.
Worksheet 5 Organization Chart
This worksheet will present a schematic representation of the basic structure of the firm. Shown below is an organization chart that accurately describes the company structure.
(sources: Hein Kruyt, Solynta.com)
The company structure, as depicted above, is best described as a functional organization design. Also, because of the relatively small size of the firm, it lacks a formal hierarchy in reality.
Worksheet 6 (Needed: Balance Sheet)
Like almost every company, Solynta has many different resources that each add their value to the company individually and create synergy. These consist of physical, human and organizational resources. In the following paragraphs examplesa couple of each will be described.
Physical resources are the most obvious. They are tangible and visible byfor the naked eye. Despite being founded in Bergschenhoek, which is close to Rotterdam, Solynta now has most of their physical resources in Wageningen, The Netherlands. In Wageningen they have their office, greenhouses for plants (close to Wageningen), climate cells (close to Wageningen) and their cold storage rooms. All of the four named resources are being rented. Outside of The Netherlands, Solynta rents fields for testing. TCurrently they are currently testingdoing this in Egypt, England, Austria, Finland, Congo, Uganda and also in The Netherlands. Their plan is to expand testing this to Spain, Italy and Canada as well.
Besides physical resources,Next, the human resources are crucial for Solynta’s development. The board of the company consists of four members, each contributing in their own way. Three of the four members have completed a Master of Science degree in a particular subject ,and the fourthother member has been a breeding director for forty-three years. The main characteristic of the board is its vast experience in the industrythat it is very experienced in this industry. The following proves that (source: McKinsey):
Furthermore, there are two organizational resources that Solynta are very glad to have. The first is their patent. The company currently has been granted patents granted in Australia, South Africa, China, Germany, Mexico and Israel. These patents are eligible for twenty years, starting in 2010. Furthermore, they have patents pending in Belgium, France, The Netherlands, Poland, The United Kingdom, Spain, Italy, Portugal, Canada, The USA and Russia. These patents are only for the technique that Solynta uses. As soon as the product is fully developed, they will also request patents for all the different potato-seed races. These patents will be eligible for thirty years. The second organizational resource that is very valuable to Solynta is their partner Pepsi. With Pesi as a partner, Solynta is allowed access toThis partner allows Solynta to access distribution channels, which saves them a lot of time and effort.
ConsideringLooking at most of Solynta’s resources, it has many traits of a startup. First of all, most of the physical resources are not theirs, they still have to rent them. Secondly of all, the board consists of a small team and Solynta doesn’t have that many employees yet as they will havecould have, once their product entersreaches the market. Finally, Solynta is very dependent on their partnership with Pepsi, as they miss the expertise and time to fulfill these tasks themselves. Recently gaining patents and wishing to get more in the future, also demonstrates that their product is very new, groundbreaking and that they are still a startup. Overall, the firm has a wide variation of resources that create synergyadd value to it.
Worksheet 7
In the potato crop, conventional breeding is hampered by the complex chromosome structure and severe inbreeding depression. This has made the development of new variety a slow, inefficient process and has so far prevented F1-hybrid breeding, a breeding approach which has progressed corn, rice, canola, and many vegetables.
Solynta has innovated a new (non-GMO) method to develop elite potato germplasm and has used it to develop its proprietary elite germplasm. We will elaborate on this in a 5-step model.
Crossing
Step 1
Creation of genetic variation by means of crossing the entire genetic material of two parent plants
Step 2
The genetic material of the offspring is rearranged and redistributed along the Laws of Heredity
Selection
Step 3
Selection of the offspring featuring the desired properties
Step 4
The targeted traits will be selected among subsequent filial generations
Multiplication/Bulking up
Step 5
Multiplication and preservation of the new, selected plants
Solynta’s technology allows them to create step-change in potato breeding efficiency. they make targeted breeding possible: In-crossing new traits and stacking in 2-4 instead of 15-50 years, accelerate dynamic development of new varieties in 2-3 years instead of 7-15 years, adapt the crop to new advanced agronomic practices and dramatically shorten the bulking up time for new cultivars. As we may conclude is Solynta really promising.
Worksheet 8
In the previous worksheets a general description of the company was giving. The objective of this worksheet is to determine Solynta’s strategy, so we can use it as a base for comparison with our recommended strategy later on.
Current generic strategy
Solynta has competitive advantage of premium value and uses a broad scope. Considering these aspects Solynta uses a strategy of differentiation. Solynta’s technology and knowledge enables them to deliver products, in the future, no other potato breeder is even close to produce. Solynta differentiates themselves by offering a potato seed, instead of tube, that is highly customizable, better resistant against diseases and more profitable for farmers.
Current strategy
According to the CEO of Solynta, Hein Kruyt:
“Solynta aims to release a chips (crisps) potato seed in 2021, achieve phytophthora disease resistance by 2024 and a yearly market penetration of 10% in the developed world after product release by using our patented breeding technology to deliver a potato seed that is highly customizable, better resistant against diseases and more profitable for farmers”.
Conclusion
Solynta’s current generic strategy is clearly one of differentiation. The products Solynta will bring to the market have vast advances over what the market currently has to offer due to Solynta’s technological advances. Dimensions highly valued by customers can efficiently be reflected in their products due to customizability, which adds surplus value. Surplus value of Solynta’s products will facilitate the achievement of the challenging objectives they have set for themselves.
Worksheet 9 (Needed: List of objectives ranked in priority. Brainstorm Indicators and discuss Values and Period)
Intro
This worksheet will formulate the strategic objectives that Solynta has for the near future.
2) Objectives
Priority
Objective
Indicator
Required Value
Current Value
Period
1
Commercial debut in 3 years. Market penetration of 10% annually.
Product development, market penetrationpenentration.
Product sufficiently developed against competition. Market share growth of 10% annually.
Product in development. No market entrance.
3 years.
2
30% growth of potato yield.
Potato yield statistics
30% growth
/
2-3 years
3
Entrance into the Sub-Saharan market within the next 2 years.
Sales in Sub-Saharan market.
/
2 years
4
Develop a pathogen resistant potato strain.
Research and tests.
Fully pathogen resistant potato strain.
Potato strain that requires 60% less pesticides than traditional strains.
3 years
3) Conclusion
Worksheet 10
Like every company, organization or foundation, Solynta also has its strategic issues. These can concern financial issues, legal issues, ethical issues, etc. Solynta is a startup, so it is still in a very fragile phase. In the following, some of the firm’s major issues are demonstratedcome to mind.
The first, and probably the biggest, issue is a financial one. Since Solynta has high research and development costs, they need to attract investors for this. This remains a challenge for them because there is still no certainty that their hybrid potato breeding seed will eventually be fully developed and brought out onto the market. Therefore, successful testing and improvement of their products must convince investors that Solynta is the right companyplace for them to invest their money into. Solynta does not have enough equity to cover these costs themselves, so they are very dependent on investors. Without fundingthis money Solyntathey cannot reach itstheir strategic objectives.
Secondly, Solynta faces a legal issue. The hybrid potato breeding seeds that they are developing do not exist yet according to the law. Also, it is a strategic crop, which some countries don’t appreciate. By not being acknowledged byexisting in the law, the company might experiences difficulties at the border whenwhile importing and exporting their products. Customs don’t know their product and therefore won’often don’t allow it to pass. However, this is a short term issue as this can very likely be solved. Therefore, it won’t prevent the company from reaching its strategic objectives in the future.
Next, there is an ethical issue that Solynta encounters. Most potatoes nowadays contain a bacterium that causes abdominal cramps, diarrhea, fever and an upset stomach when eaten raw. To destroy these bacteria, farmers spray toxic chemicals on the potatoes. However, the potatoes that Solynta’s seeds produce don’t contain this bacterium. Farmers pay a lot of money to the suppliers of these toxic chemicals, but with Solynta’s seeds they won’t need to anymore. Therefore, the suppliers of the toxic chemicals are not happy with Solynta as they are losing their business as a consequence of Solynta’s success. This again is not a long term issue that will prevent Solynta from achieving its strategic objectives, but they will need to deal with it in an ethical way soon. In this manner, they will be able to come to an appropriate solution with both parties; the farmers and toxic chemical suppliers.
To conclude, Solynta faces both short and long term issues. It’s interesting to see how the three issues named above all differ from each other. However, their legal and ethical issue seem very likely to overcome in the near future. Their largest issue, attracting investors, will also be the most interesting issue to follow in the upcoming years. Results will need to convince investors that Solynta is actually going to change the world potato production process. If this doesn’t happen, their future is uncertain. since they do not have the equity themselves to cover most of the costs.
Worksheet 11
The External Analysis takes a look at the opportunities and threats existing in the organization’s environment. For a company this is really important to identify their opportunities and threats so they can anticipate at them.
Opportunities
Threats
Worksheet 12
What industry does Solynta operate in ?
What are Solynta’s Geographical boundaries ?
In what stage is the industry ?
Initiation, Growth, Maturity, Decline.
Provide arguments.
One based on growth of the industry.
Long term.
When will it move to the next stage ?
What are opportunities for growth and profitability for firms in the industry ?
Technological breakthroughs ? Such as Solynta in 2009.