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Biotechnological Start-Up’s Market Research Report

Customer Discovery: Technology Platform

Technology Platform

The effective engineering of fundamental areas is key to a high quality of life. In agriculture, biotechnology plays a vital role in advancing the production of various crops and increasing the harvest. South et al. (2019) established three new metabolic pathways into the plant cell and increased the efficiency of photosynthesis by 40 percent, which is the main innovative element for commercialization. It should be clarified that such success inefficiency is measured by the result – the growth of the biomass of plants.

The theoretical estimates of this fundamental improvement gave from a 20 percent to 50 percent increase in the efficiency of photosynthetic processing (South et al. 2019). While the experiments were conducted with a tobacco plant, such food plants as rice, wheat, and soybeans are also belong to C3 crops with similar features. The native metabolic pathway was blocked so that the energy would not spend there, and the complete control of the entire internal mechanics of the cell was provided.

Technology Advantages

The enhancement of the process of photosynthesis in rice, wheat, and soybeans is advantageous since these are the main crops in the world. The soil and climatic conditions of many regions with the identified crops made it possible to organize their production. However, the agricultural and climatic features of these areas required the study of the characteristics of growth and development of tobacco, rice, et cetera in these conditions (Smyth, Phillips & Castle 2014).

In Mexico, Canada, India, and many other countries, golden grains are sown and reaped, which then come to the table in the form of fragrant bread. Nevertheless, wheat harvest is not enough to feed all the hungry. Because the climate on the planet has become warmer, crops lag in growth. Destructive fungi, droughts, and other factors are a serious threat to valuable food crops on the planet (Smyth, Phillips & Castle 2014).

This situation will adversely affect the domestic food production sector. The implementation of a set of measures will contribute to the development of advanced postgenomic and biotechnological methods in crop production and the formation of dynamic markets for transgenic seeds and plants demanded by agricultural producers.

According to the Food and Agriculture Organisation (FAO), feeding humanity, which is predicted to be nine billion persons by 2050, requires boosting food production by 70 percent (How to feed the world in 2050 n.d.). Wheat remains the key source of protein in the poorest countries, and while the planet’s population is growing at a rate of 1.5 percent per year, the increase in wheat yield — the amount of grain harvested per hectare — is only one percent.

This means that the productivity of wheat in agriculture will increase. The scientists note that this could be the beginning of a new green revolution (Zhang & Wang 2015). Moreover, such a method is rather useful for scientists, as they will be able to quickly test genetic combinations to generate crop growth that is more adapted to various types of climate. Some say that even if people learn to grow wheat faster, the resulting plants will be small and infertile. New technology makes it possible to grow wheat and related crops, which is more effective than using standard methods.

Competition and Implementation

Speaking of the competition, it should be emphasized that South et al. (2019) were able to select the gene structures used by E. coli bacteria to optimize the process of photorespiration in wild tobacco. These gene mechanisms turned out to be much more efficient than natural ones during enzymatic reactions. The authors consider that the introduction of this so-called cell repair into plants, now grown only in one agricultural region, the American Midwest, would give 200 million people no additional food.

In comparison, one may focus on such methods of innovation of crop production as genetic modification, the reduced utilization of pesticides, and the development of herbicide- and insect-resistance in plants. To comprehend the target technology value, it is important to pinpoint some results demonstrated by the mentioned alternatives. Over the 15 years of commercial use of genetically modified crops, the income of farmers using these technologies has increased by more than $ 65 billion (Farrar, Bryant & Cope‐Selby 2014).

The product precautions happen to the reduction of pesticides, costs on soil treatment, the economy of combustion, and reduction of wages. The 8.8 percent reduction in pesticide use prevented the introduction of 393 million kg of pesticides, which is another option for improving the harvests. More to the point, herbicide-resistant crops allow the use of minimal and zero tillage, reducing soil erosion. The insect-resistant cultures showed an improvement in the quality of food — the absence of mycotoxin in corn, which is likely to cause cancer.

The implementation of the new metabolic pathway based on photosynthesis requires the application of Agrobacterium tumefaciens strain C58C1-mediated transformation and Chlamydomonas reinhardtii for glycolate dehydrogenase. These enzymes were used by the authors of the suggested biotechnology, which identifies their need for further implementation. There are four components of the biotechnology process, including the product, the object, raw materials, and the technology platform. As a result of the transformation of living or non-living materials, biotechnological products are obtained, which requires the use of one or more biotechnological methods, including intellectual efforts as well as research and development.

To introduce the given technology in practice, it is vital to find investors, the companies that want to use it and make agreements on the amount of the involved products and period. The basis for successfully using bioproducts is a biological synthesis that allows creating new products with desired properties. It is expected that the world biotechnology market in 2025 will reach a level of $2 trillion, and the growth rates in individual market segments will range from 5 to 30 percent annually (Ort et al. 2015). In this connection, one may suggest that the introduction of the technology would not be easy as it will require significant investment and additional efforts to prove that it will benefit enterprises.

Currently, in many developed countries, the introduction of innovative technologies in the agro-industrial complex that is the core target market allows creating products that are competitive in the world market. However, some barriers should be specified to address them during the implementation stage (Prasad, Kumar & Prasad 2014). First of all, as a result of the permanent use of herbicides, new weeds have emerged, which require the use of much larger amounts of highly toxic glyphosate herbicides.

In 2013, UQ School of Chemistry and Molecular Biosciences documented that superweeds are the beginning of a global environmental catastrophe because they cannot be controlled and respectively destroy (Problems with herbicide-resistant weeds become crystal clear n.d.). Many farmers testify that in three months, they spent more than € 400,000 to destroy the new giant weeds. Moreover, agricultural machinery breaks at harvest because these plants are extremely tough. A lot of hectares of cotton and soybeans were contaminated by these mutants.

The uncertainty and attitudes of individual framers and the organizations working in this field are the key barriers to be addressed. In other words, it is important to take the mentioned barrier into account while promoting new technology. The focal reason is the lack of awareness of practitioners and the lack of a sufficient industrial manufactured range. Besides, the use of growth stimulants requires a high culture of farming and care utilization. Overdose is dangerous due to the threat of the exact opposite result compared to the initial goal. Moreover, the range of stimulating concentrations is rather narrow, and, therefore, the likelihood of an overdose is high.

The costs and prototyping of the solution to the need to increase the biomass of crops are two other barriers. The costs would include patent, research and development, adjustment of the technology to specific needs and crops, and the evaluation of the outcomes. As for prototyping that implies the raw product introduction to consider a full picture, it may be challenging to die to the need to pay attention to the context of partner organizations and farmers, environmental factors, and the risk of failing to properly design it.

Because of the mentioned barriers and opportunities, it is essential to propose additional research on the background of implementing the new metabolic pathway and photosynthesis. In particular, it should be recommended to reveal the advantageous and disadvantageous factors that may affect the technology use and develop the strategies to either facilitate or eliminate them. It is also beneficial to conduct the study with other crops, involving wheat, soybeans, and rice to understand the value of the developed photosynthesis technology. Even though tobacco and the mentioned crops have a similar structure, their response towards the new method may be different.

Preliminary research on costs and potential investment and the ways to optimize them should be performed to set objectives and start collaborating with customers. Thus, science shows the great potential of this technology, and the world organizations, such as FAO and WHO, enable biologists to reinvent crop-related innovations through research.

Customer Development (Validation): Market Research

The market base (a one-sentence description): The biotechnology industry focusing on agriculture advancements composes the foundation for the proposed technology.

The US market of biotechnology is the primary developer of innovative crop technology in the world. In particular, the “American companies spent US$33.9 billion on R&D, 18% more than the previous year and that their revenues increased 16% to US$107.7 billion” (The US biotechnology industry: a market report 2017, p. 3). At the same time, the UK biotechnology industry is also marked by rapid growth, which is characterized by more venture capital compared to that obtained by San Diego and San Francisco companies in the US.

The Telegraph reports that “UK-based biotech firms raised a total of £1.13bn last year, with £681m coming from venture capital funding and £105m from the Initial Public Offering (IPOs)” in 2016 (Dean 2017, para. 4). As stated by Ibis World, the market revenue is £12.2bn, and annual growth is 7.3 percent (Biotechnology – UK market research report 2018). These estimates show that the market of biotechnology provides valuable opportunities for entrance and commercialization.

Speaking of the market distribution, one should stress that the target technology is expected to be implemented in the US. Since the conditions are most favorable in the mentioned country, it is possible to anticipate that the project should be started there. For example, organizations and individual farmers may be contacted with the proposition to adopt the new method for the increase in crop growth. The technological foundations also seem to be appropriate to initiate the direct introduction and further research.

After success would be achieved, it is beneficial to extend the company to European countries, especially the UK since it is also open to agriculture-related bioscience. The value of this market cannot be overestimated since it is likely to resolve the problem of hunger in developing countries and ensure a high-quality life in developed ones.

Since the 2000s, several leaders have emerged in the agrochemical and plant breeding sectors, which is accountable for more than 50 percent of the whole market sales. Specifically, according to researchers in the agricultural sector, the so-called big six exists, including Monsanto, DuPont, Dow BASF, Syngenta, and Bayer. They jointly control over 75 percent of the global agrochemical market, 63 percent of the seed market, and almost 2/3 of research and development related to the seed and pesticide market (Breaking bad: big AG mega-mergers in play; Dow + Dupont in the pocket? Next: Demonsanto? 2015).

As of 2013, the cumulative research and development budget allocated by the big six competitors was 15 times higher than the United States Department of Agriculture (USDA) budget for conducting relevant research. Thus, even with the partial limitation of rights to assets and/or dilution of shares in consolidated companies, it is challenging for independent participants to enter the market, which could affect the economic and political course of start-ups and, thus, competitive supply in the market.

The alternatives offered by the mentioned companies are well-accepted by customers since these big six corporations have the authority that was proved for years. Therefore, the start-up company should focus on building cooperation with smaller partners who cannot afford the services provided by the identified giants or consider more innovative options. It is also important to build customer confidence by clearly explaining the benefits of the product (Lucht 2015).

Among other alternatives, there are non-genetic methods that allow avoiding gene transformation. Even though they are usually perceived as organic ones that are regarded as the state-of-the-art, their effectiveness may be lower than that of genetic variants (Wilson et al. 2014). There is the tendency of shifting towards healthier strategies to increase the biomass of wheat and soybeans, as proposed by the advocates of healthy lifestyles. Awareness of these specifics is useful to understand how to position the innovative technology and successfully compete in the existing conditions.

The start-up company advantage lies in offering a completely new method to raise crop biomass, working primarily with small businesses. Tobacco growing is a highly profitable and profitable industry with its established cultivation regions. Likewise, rice, wheat, and soybeans are essential for populations as the main resource for many foods and the basics of nutrition. However, due to the changing socio-demographic situation, the majority of C3-processing enterprises found themselves in a difficult economic situation due to the unstable supply of raw materials. It leads to the fact that purchases of raw materials had to be done in other countries at the established world prices.

Accordingly, the start-up company that would consider utilizing the discussed technology would benefit from assisting the organizations that work in the area of producing C3 crops (Fochler 2016). Providing them with the opportunity to reduce risks and increase profits, the start-up would capitalize on its research and further adjustments. Such an approach to commercialization would also allow covering patent costs and the issues related to constant development and market research.

Within the next five years, it is expected to cover 2-3 percent of the US market of biotechnology associated with crops. These estimates seem to appropriate since there is strong competition in the field, and it may be challenging to gain customers’ trust. To enter and gain market share, smaller steps are more preferred. According to Barrows, Sexton, and Zilberman (2014, p. 100), “while the next wave of genetic engineering has potential to improve crop response to climate change and boost the nutrient density of staple crops, attention must be paid to the unique risks each new trait may pose”.

Based on this approach, it would be possible to learn from mistakes and avoid big failures by adjusting to emerging problems. The timely improvements of the technology and the work with customers are likely to lead to covering some parts of the market shortly.

To ensure that the developed technology would be used only by the given start-up company, it is significant to consider intellectual property (IP). A patent, as a type of security document provided for the results of scientific and technical activities, assigns to its owner the priority and exclusive right to use the relevant IP (Petruzzelli, Rotolo & Albino 2015). It guarantees the possibility of receiving remuneration for the resources invested in its creation.

Patent statistics can be considered a reflection of the current level of inventive activity in various segments of the technology market: for example, the number of patent applications filed or patents granted. This approach seems to be justified for the proposed biotechnology. It is the most common way to protect the associated IP, and alternative strategies are not widely used here (Miralpeix et al. 2014). Thus, a significant part of inventions in this area relates to agriculture, therefore, the release of products manufactured on their basis requires a detailed description of its composition, which makes it impossible to observe a trade secret regime.

For accomplishing effective customer validation, it is essential to overcome several hurdles, such as IP landscape, investment channels, as well as ensuring desirability and usability. Also, “the growth of commercial GM stacks potentially constitutes an additional cause of the low-level presence of modified crops in the EU because non-authorized stacks … might end up in shipments to countries that regulate them” (Parisi, Tillie & Rodríguez-Cerezo 2016, p. 35). First of all, patents are costly and should be prolonged within several years, which makes scientists to thoroughly review their innovations to decide whether to continue operating in the given field or not.

Second, a critical factor for companies engaged in this sector is the availability of different levels and forms of support – from subsidizing interest rates on loans to direct support in the form of targeted subsidies and other forms of investment. Although investments cannot be considered a stable factor, it is still of great importance to have interested organizations that are willing to contribute to the start-up development (Kim 2015).

Ultimately, desirability and usability should be taken into account that the company is expected to empathize with customers to understand the problems they need to resolve. In this case, the problem is transparent yet can be varied across organizations. The start-up company should remain beneficial to its customers, offering the most suitable and effective options.

Summary of Customer Discovery and Validation

The process of customer discovery will be based on the translation of the target technology into the practical application option. Its benefits and the markets that are favorable for the entry are to be identified. At the same time, it is critical to determine the way the technology can be implemented as well as barriers that can be encountered in this process. The focus on additional research is useful for the start-up company to follow the principle of continuous development and remain competitive.

The customer validation process is expected to consist of market research, problem specification, and fitting the product in the context of customer needs. Patenting, challenges regarding customer validation anticipated market share coverage, and the company’s advantages are identified as the most significant elements of the mentioned process.

Reference List

Barrows, G, Sexton, S & Zilberman, D 2014, ‘Agricultural biotechnology: the promise and prospects of genetically modified crops’, Journal of Economic Perspectives, vol. 28, no. 1, pp. 99-120.

Biotechnology – UK market research report 2018. Web.

. 2015. Web.

Dean, S 2017, ‘’, The Telegraph. Web.

Farrar, K, Bryant, D & Cope‐Selby, N 2014, ‘Understanding and engineering beneficial plant–microbe interactions: plant growth promotion in energy crops’, Plant Biotechnology Journal, vol. 12, no. 9, pp. 1193-1206.

Fochler, M 2016, ‘Beyond and between academia and business: how Austrian biotechnology researchers describe high-tech start-up companies as spaces of knowledge production’, Social Studies of Science, vol. 46, no. 2, pp. 259-281.

n.d. Web.

Kim, ST 2015, ‘Regional advantage of cluster development: a case study of the San Diego biotechnology cluster’, European Planning Studies, vol. 23, no. 2, pp. 238-261.

Lucht, J 2015, ‘Public acceptance of plant biotechnology and GM crops’, Viruses, vol. 7, no. 8, pp. 4254-4281.

Miralpeix, B, Sabalza, M, Twyman, RM, Capell, T & Christou, P 2014, ‘Strategic patent analysis in plant biotechnology: terpenoid indole alkaloid metabolic engineering as a case study’, Plant Biotechnology Journal, vol. 12, no. 2, pp. 117-134.

Ort, DR, Merchant, SS, Alric, J, Barkan, A, Blankenship, RE, Bock, R, Croce, R, Hanson, MR, Hibberd, JM, Long, SP, Moore, TA, Moroney, J, Niyogi, KK, Parry, MAJ, Peralta-Yahya, PP, Prince, RC, Redding, KE, Spalding, MH, van Wijk, KJ, Vermaas, WFJ, von Caemmerer, S, Weber, APM, Yeates, TO, Yuan, JS & Zhu, XG 2015, ‘Redesigning photosynthesis to sustainably meet global food and bioenergy demand’, Proceedings of the National Academy of Sciences, vol. 112, no. 28, pp. 8529-8536.

Parisi, C, Tillie, P & Rodríguez-Cerezo, E 2016, ‘The global pipeline of GM crops out to 2020’, Nature Biotechnology, vol. 34, no. 1, pp. 31-36.

Petruzzelli, AM, Rotolo, D & Albino, V 2015, ‘Determinants of patent citations in biotechnology: an analysis of patent influence across the industrial and organizational boundaries’, Technological Forecasting and Social Change, vol. 91, pp. 208-221.

Prasad, R, Kumar, V & Prasad, KS 2014, Nanotechnology in sustainable agriculture: present concerns and future aspects’, African Journal of Biotechnology, vol. 13, no. 6, pp. 705-713.

Problems with herbicide-resistant weeds become crystal clear n.d. Web.

Smyth, SJ, Phillips, PW & Castle, D 2014, Handbook on agriculture, biotechnology and development, Edward Elgar Publishing, Northampton, MA.

South, PF, Cavanagh, AP, Liu, HW & Ort, DR 2019, ‘Synthetic glycolate metabolism pathways stimulate crop growth and productivity in the field’, Science, vol. 363, no. 6422, pp. 1-9.

The US biotechnology industry: a market report. 2017. Web.

Wilson, GA, Perepelkin, J, Zhang, DD & Vachon, MA 2014, ‘Market orientation, alliance orientation, and business performance in the biotechnology industry’, Journal of Commercial Biotechnology, vol. 20, no. 2, pp. 32-40.

Zhang, B & Wang, Q 2015, ‘MicroRNA‐based biotechnology for plant improvement’, Journal of Cellular Physiology, vol. 230, no. 1, pp. 1-15.

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