Barco Case Analysis
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Erik Dejonge was faced with some difficult decisions to make in the near future regarding the future of Barco Projection Systems. Sonys announcement of their new product launch, the 1270 projector series, had caught upper-management at Barco completely by surprise. Barco had marketed themselves as innovators in the field. They targeted a niche market and priced their products relatively high (skimming price strategy). Barcos narrow focus on only high-end products allowed Sony to surprise them with the release of this new positioning. This was not the first time in which Sonys engineers had beaten Barcos technology in the video-tube domain. In the future, it will be important for Barco to analyze and anticipate both the markets and their competitors more fiercely.
Here were some of the options that had to be considered regarding Barcos future:
Pricing Strategy
Options:
If the Sony 1270 is priced at $20,000, and the cost of the BG400 remained unchanged, BG400 stood to lose 30% of its market share
If the Sony 1270 is priced at $15,000, and cost of the BG400 and BD600 remained unchanged, BG400 stood to lose 60% of its market share and BD600 would lose a considerable amount
Solutions:
Dont change the price.
Since Sony has not released what their price will be yet, Barco should choose to wait and see what the price they decide to set it at and study how the market reacts to their positioning before making a decision on their own price.
Production Strategy
Options:
Continue the production of the BD700, which will be on time.
Use the developments that were planned for the BD700 to be used as a stepping stone to produce the BG700 instead.
Move directly to the development of the BG800 projector
Solutions:
The best choice that Barco could make would be to scratch the BD700 and BG700 products and move directly towards the BG800 products.
Although the BD700 projectors would definitely be completed on time and hours of production have already gone into their design, the product would be a failure. It would completely lack in comparison to Sonys 1270 projector. This is true of the BG700 project as well. Barco prides itself as being innovators in the field. If this is the case, they cannot switch to instead developing a product in attempts to catch the “growth” period of the market. Their product would not be as good as the 1270 projector and Sony would have already captured the