Discussions Week Three 2018

B2P: Micro-Bioinformatics Technology and Global Expansion

SUMMARY AND AUTHOR’S NOTE

In 1983, Dr. Rosemary Sharpin formed New Zealand’s first biotech company. It was at ICP that Dr. Sharpin learned of the need for better E. coli and coliform testing. As a result, in conjunction with the New Zealand Dairy Research Institute, ICP began to research and develop the innovative biotechnology that would become the foundation for B2P’s testing products. In 2002, Dr. Sharpin bought the intellectual property that was the basis of the B2P product suite from ICP, and she and business partner Maxine Simmonds “spun off” B2P Ltd.

Dr. Sharpin knew what the market needed: a fast, simple, portable bacteria testing system. B2P’s solution—essentially a large bottle in which the contents turn either pink or white, depending on the bacteria present—effectively filled that need and quickly became popular in the New Zealand dairy and shellfish industries. As a result of this success, B2P developed multiple products varieties and complementary products, all with the same testing concept. Dr. Sharpin believed that B2P’s simple, electronic, and field-ready automated bacterial testing systems were perfectly suited to solve the current global crisis. The self-contained units could be used in any environment to detect, count, and report E. coli and related bacteria.

Any area that could be affected by E. coli could be considered a potential market. Based on consumer demand and government intervention, the two markets with significant opportunities were within the water and food industries’ supply chains. Within the E. coli and colioform testing industry there are several “areas of pain.” Overcoming them can place an organization ahead of the other testing outlets. They include breadth of services, reliability, technology, time, and price.

The B2P E. coli and coliform testing kits are more reliable, more efficient, and more convenient than any other product on the market, and the company has made successful inroads in Australasia. However, breaking into the lucrative European and American markets will likely take a serious commitment of both time and resources.

WHERE TO USE THIS CASE

· Chapter 3: Use to discuss the process of innovation and creative problem solving in new product development.

· Chapter 6: Use to discussing developing a prototype and validating a solution.

· Chapter 7: Use to address intellectual property issues in a global business.

· Chapter 12: Use to discuss the supply chain and value of outsourcing.

· Chapter 13: Use to discuss the importance of the legal form of organization.

CASE ANALYSIS

This case offers the opportunity to examine the process of industry and market analysis. A global health crisis has created a global opportunity for B2P. Begin with a discussion of Dr. Sharpin set up her startup. One of her goals in organizing was to not over extend the company too much in the initial stages. As a result, B2P’s structure was straightforward and leveraged outsourced resources including contract manufacturing, marketing, and non-essential design and development. Consider with students how this set up may help B2P go global.

Analyzing Industries and Markets

Consumer concern and government involvement has caused an increased opportunity within the testing industry as demand for safer products grows. Two ongoing developments that affect E. coli and coliform testing are the growth in the environmental testing activities industry and an increase in agricultural testing, with both areas benefiting from additional government funding and increased competition.

Before taking advantage of the opportunity, Dr. Sharpin had to answer a number of questions. Although the publicity from the New Zealand Health Challenge might help her gain a foothold in the international market, she had to decide whether to expand her efforts in Australasia, where she had already made some progress, concentrate on the more lucrative European and North American markets, or look for opportunities in the third world market. Dr. Sharpin had to identify which industries had the greatest need for B2P’s products and where the barriers to entry might cause problems. Ask students to consider strategies Dr. Sharpin might use for new market entry in order to maximize her chances for success and minimize the risk to a young company.

Recognizing Opportunities

The frightening threat of E. coli contamination in food and water will always be a problem. Fortunately, serious outbreaks can easily be prevented if the contamination is caught quickly and dealt with immediately. Thus, the need for a reliable, convenient, quick method of testing food and water provides an ample opportunity for B2P to expand its business.

Current methods of testing for E. coli and related bacteria require a professional laboratory, skilled staff, and up to three days for results to be received. These limitations slow down the testing process and could contribute to outbreaks. Seeing an opportunity, B2P developed a portable, one-time use, self-contained testing device that enabled almost immediate detection of bacteria present in or on anything. Experiencing success in New Zealand, B2P developed multiple products varieties and complementary products, all with the same testing concept.

Discuss the “areas of pain” that create opportunities for B2P to offer a broad array of services, establish reliability, develop proprietary technology, accelerate turnaround time, and price sensitively. Then consider with students the markets that might be interested in B2P product. These include suppliers; commercial retail outlets; cities, towns, and utilities; beaches, lakes, and rivers; testing laboratories; and consumers. Which might be most attractive to B2P and why?

Barriers to Market Entry

Breaking into the lucrative American and European markets will take a serious commitment of both time and resources. Discuss with students the barriers to global expansion for B2P. When considering the testing market, and specifically the U.S. testing market, there are several key challenges that should be considered. They include:

· Breadth of Services. Many labs offered multiple types of testing. By sending samples to a lab of this kind, a company could obtain lab results for more than one contaminant.

· Reputation. Without a proven American track record, entering the testing market could be a challenge.

· Regulation. The U.S. was a highly regulated market and obtaining government approvals was expensive.

· Requirement. When possible, companies sometimes chose not to test their products at all. If testing was not required and its cost exceeded the cost of a product recall, many—especially in the meat industry—chose not to test their products.

DISCUSSION QUESTIONS

1. What are some of the challenges the company faces when entering the U.S. testing market and how can B2P overcome them?

Breadth of Services

· Challenges: B2P offers a niche product which may make it difficult to compete against labs that conduct multiple tests.

· Solutions: Identify and pursue markets in which multiple types of tests are not required.

Reputation

· Challenges: Without a proven U.S. track record, entering the testing market may be a challenge.

· Solutions: Build off current reputation to generate partnerships with established U.S. companies. Build reputation by providing complimentary samples, attending tradeshows, and establishing partnerships with industry influencers.

Regulation

· Challenges: U.S. is a highly regulated market and obtaining government approvals is expensive.

· Solutions: Begin process for government approval (EPA, FDA, etc.) as soon as possible.

Deniability

· Challenges: When possible, companies sometimes choose not to test their products at all. If testing is not required and its cost exceeds the cost of a product recall, many—especially in the meat industry—choose not to test their products.

· Solutions: Work with government and/or trade organizations to educate suppliers and consumer outlets to demonstrate cost of savings of testing vs. recalls/negative reputations.

2. Is the B2P product an industry game changer? Is the product better than the other testing devices on the market? Why? Why not?

The company’s product is more reliable, more efficient, and more convenient than any other product on the current market. Despite its limitations in the number of items it can test for, there is no other product like it. Getting people to use it, however, will be the challenge. The company will have to develop a strong market presence early on in order to differentiate itself from competitors in the minds of the users.

3. What are some of the opportunities for B2P?

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