Businessmodel of Mosaic Company

Customer Segments

Mosaic has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at retail chains, independent retailers, wholesale distributors, cooperatives, and national accounts.

Value Proposition

Mosaic offers four primary value propositions: innovation, performance, risk reduction, and brand/status.

The company embraces innovation as part of its culture. Its groundbreaking efforts include:

Stage-Gate Model – Mosaic uses this model to generate ideas, formulate products, and test products. In 2014 alone it carried out over 500 efficacy trials using the process, with specific innovation focus areas including the development of premium phosphate products, the development of muriate of potash (MOP) products that add incremental value, and the promotion of balanced crop nutrition practices that deliver the right ratio of nutrients.

MicroEssentials and Aspire – Mosaic pioneered the development of MicroEssentials, the industry’s first premium fertilizer product. Using the company‘s patented Fusion technology, it enables improved nutrient uptake, uniform nutrient distribution, and provides season-long sulfur availability. Mosaic also created Aspire, which delivers potash and boron in one granule through its patented Nutriform Technology process. By combining the two elements, Aspire reduces the risk of uneven application, saving time in the field and enhancing nutrient use.

The company has demonstrated strong performance through tangible results. Its aforementioned MicroEssentials product has been shown to increase corn yields by an average of 7.2 bushels per acre vs. traditional fertilizer.

The company reduces risk by maintaining high safety and security standards, as follows:

Cogeneration – Mosaic recovers wasted heat in its operations, enabling it to produce clean, emission-free electrical energy. In 2013 it avoided the equivalent of 1 million tonnes of carbon dioxide emissions—equivalent to taking 100,000 cars off of the road.

Supply Chain – Mosaic completed a conversion to a natural gas-powered truck fleet for raw materials and finished products in its Central Florida operations. This resulted in a 20% reduction in carbon dioxide emissions from its trucks in 2013, leading to savings of at least $1 million annually.

Manufacturing – Mosaic’s Belle Plaine potash solution mining facility sends water to be used in a cooling process at a plant in Saskatchewan. The heated water returns to Mosaic’s facility to be used as part of the potash production process. This arrangement enables the company to save approximately 665,760 gigajoules in indirect energy consumption annually.

The company has established a strong brand due to its success. It bills itself as the leading producer and marketer of concentrated phosphate and potash crop nutrients. It has an annual capacity that is greater than the next two largest producers combined – 22.2 million tonnes for finished production (11.7 million tonnes for phosphates and 10.5 million tonnes for potash). Its operations account for 14% of global annual production and 79% of North American annual production of concentrated phosphate crop nutrients, as well as 13% of global annual potash production and 43% of North American annual potash production. It employs nearly 9,000 people in six countries and serves customers in over 40 countries. Lastly, it has won many honors, including the following:

• The CR100 Award from Corporate Responsibility Magazine for six consecutive years
• Recognition as a Climate Dislosure Leader by the CDP Disclosure Leadership Index for three years
• Recognition as one of World’s Most Ethical Companies by the Ethisphere Institute
• A 2013 Excellence Award in Corporate Philanthropy from The Committee Encouraging Corporate Philanthropy (CECP)
• Recognition as one of Saskatchewan’s Top Employers for three consecutive years ### Channels

Mosaic’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, and sponsorships of two sports stadiums in Regina, Saskatchewan.

Customer Relationships

Mosaic’s customer relationship is primarily of an automated nature. It produces phosphates and potash for customers while engaging in limited interaction with them.

The company’s website features a section called MosaicOnline that enables clients to access their account information and order products. That said, there is a personal assistance component. Each year the company invites 200 select customers to AgCollege, an agricultural event that provides updates on developments in the agronomic industry.

It also conducts a satisfaction survey twice a year whose results it uses to improve its services. There is also a co-creation element, as the company sometimes invites customers to collaborate with it on marketing campaigns.

Key Activities

Mosaic’s business model entails producing and delivering its products for its customers.

Key Partners

Mosaic’s maintains the following types of partnerships:

Suppliers – The company’s International Distribution operations purchases phosphates, potash, and nitrogen products from unrelated third parties, which it uses to produce blended crop nutrients (“blends”).

Research Partners – The company carries out crop nutrition research and development trials with universities, researchers, and growers in the United States, Canada, Brazil, China, India, Northern Latin America (Mexico to Peru), Argentina and Chile. Specific institutions and experts it has partnered with include the following:

• Mosaic Fertilizer Research and Technology Centre at the University of Adelaide, Australia
• Ismail Cakmak at Sabanci University in Istanbul, Turkey
• Fred Below at the University of Illinois-Champaign Alliance Partners – The company is a part of the 4R Nutrient Stewardship Certification Program, which aims to pilot a nutrient application standard that encourages service providers, agricultural retailers, and other certified professionals in Michigan, Ohio, and Indiana to adopt proven best practices through the 4Rs (the Right Nutrient Source at the Right Rate and Right Time in the Right Place). Mosaic also belongs to Field to Market, an alliance working to create opportunities across the agricultural supply chain for regular improvements in environmental quality, productivity, and human wellbeing.

Key Resources

Mosaic’s main resources are its physical resources, namely its 569.1 million reserve tonnes for its phosphate mines (located in Florida and Louisiana), its 2.02 billion reserve tonnes for its potash ore mines, and its 3.70 billion tonnes for its non-reserve potash mineralization mines (potash mines are located in New Mexico and Saskatchewan).

Mosaic also maintains production, blending, and/or distribution operations in India, China, Brazil, and Paraguay. Lastly, it maintains key human resources in the form of the workers that produce its products and provide customers support.

Cost Structure

Mosaic has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is cost of goods sold, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

Mosaic has one revenue stream: revenues generated from the sales of its products to customers.