Academic journal article Journal of the International Academy for Case Studies

Bovine Pregnancy Testing, Inc

Academic journal article Journal of the International Academy for Case Studies

Bovine Pregnancy Testing, Inc

Article excerpt

CASE DESCRIPTION

BPT is a business start up case, based upon field research, requiring students to examine initial financing, marketing issues involving changing customer attitudes, and determining appropriate core customer groups. Additional issues include developing an appropriate organizational structure and developing business process arrangements with domestic and foreign customers. The difficulty level is five, with sufficient information provided in the instructor notes to use the case in both senior and graduate level strategy, policy, and entrepreneurship courses. The case is designed to be taught in two class sessions following reading of the case and instructor handouts provided in the case notes (two hours). A formal case write-up and presentation by a student or case team should take approximately 10 hours.

CASE SYNOPSIS

Bovine Pregnancy Testing, Inc., (BPT), is a bio-tech start up firm whose main product, ELISA, is designed to provide dairy farmers with early and accurate pregnancy testing capabilities not requiring manual examinations which can injure and/or abort the fetus. Because the productivity of dairy cows is related to frequency and timing of pregnancies, incremental improvements in pregnancy testing can significantly improve profits. The firm's product cannot be patented but is protected by trade secrets and technical know-how.

BPT is two years old with a small customer base. Growth has been hampered by a lack of capital, resistance to change by dairy farmers, and poor marketing. The current product, which requires blood samples to be sent to regional veterinary laboratories for over night testing, is competitive with traditional manual examinations performed by veterinarians. An upgraded test that can be administered by the dairy operator (i.e., "cow-side") is in the development stage. With 9 million dairy cows in the United States, the product has a multi-million dollar per year sales potential. Interest in the product has also been achieved in at least two foreign countries.

BPT has many challenges: (1) overcoming the resistance of veterinarians who earn fees from the traditional manual testing, (2) creating a compelling argument for angel/venture venture capital financing, (3) determining the core customer group (large or small herds and/or domestic or foreign markets), and (4) managing and operating a start-up business. The case is based upon field research involving BPT leadership, operators of dairy herds, and owner-operators of veterinary clinics and laboratories. Information provided in the case and the instructors' notes provides students with opportunities to explore angel/venture capital financing, marketing high technology products, product positioning, developing financial and marketing elements of a business plan, and exploring many practical aspects of launching a new business.

BOVINE PREGNANCY TESTING, INC.

Garrett and Amy Johnson had great expectations when they decided two years ago to scale up their tiny pregnancy testing business into a larger firm. Prior to the decision, they had taken the results of Garrett's research to perform small-scale pregnancy testing on request from owners/managers of certain wild game animal farms. When the bovine blood test was perfected, they enlisted Garrett's network of fellow researchers, veterinarians, and family members to seek initial customers. The initial plan was to target large dairy herd managers and to work through the large veterinary clinics that typically served the larger operations. BPT believed the product would be an instant success because of two crucial advantages: (1) the test provided earlier detection than the traditional manual examinations performed by veterinarians, and (2) there was no danger of aborting the fetus as a result of performing the manual test. In addition, the cost, while greater than a manual examination, proved to be very competitive when the incidence of fetus loss and earlier detection were taken into consideration (see Table 1). …

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