Essay About Product Development Strategy And Increase Efforts

Barco Projection Systems
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BARCO PROJECTION SYSTEMS (A).Worldwide Niche Marketing Harvard
Business SchoolRev. April 25, 1996
1. What product development strategy would you recommend?
Which product(s) should the company pursue? Which should phase
out? BPS is threatened by Sony introduction of the 1270
projector that has a better performance and much lower price
than BPS projectors. BPS could lose as much as 75% of its 1990
forecasted profits, from 30% to 60% market share loss in the
graphics segments, and erosion in sales in the data segment.
BPS lacks a consistent strategy for marketing and product
development since product evolution at BPS was “more a result
of engineering solutions to problems that arose than a
specific development plan” , and as a nicher BPS has failed to
protect and to create more niches. BPS also lacks a competitor
intelligence strategy and furthermore it assumed that
competitors (like Sony) would respect forever their vision of
the market place.
Therefore, we recommend developing a Marketing and R&D
strategy that helps BPS to achieve the following:
1.1 Increase efforts to encourage innovation and promote new
product generations aimed to support Barcos mission of being
the technology leader among the 3 top manufacturers.
Innovation can also lead to create new profitable niches or
segments, as BPS successfully did creating the graphics
segment in 1987 with the BG400 projector. The effort consists
in increasing the budget for Marketing and R&D considerably
above the 1989 level of 8.7% of revenue (see Exhibit 1) to
even a double level in the first year. The new budget must be
applied mostly to develop the data and graphics segments that
have higher projections in growth and market share for BPS
(Exhibit 2 shows growth and market share projections for
1989-1994), as well as to develop new segments.
1.2 Concentrate in creating simpler and more user friendly
products. New characteristics of next product generations
should include -among other things- ease of use for control
panels and instructions, and thorough and appealing-to-read
manuals. Developing less complex products will have the
following positive impacts:
*Decrease production costs as unnecessary complex designs will
not be undertaken.
*Simpler design for projectors will help to speed up
introduction and production of new products.
*Reduce costs and resources spent in training, technical
courses, and required Barco-approved Technicians.
*As less training is required to dealers, less priced
protection of unsold units to dealers can be achieved.
*Increase sales volume through a bigger distribution network
of “box” dealers since more and more dealers (and end-users)
could more easily handle BPS projectors without the need of
much expertise and know-how.
*Less reliance on service will also reduce the problems and
projector-related total cost for BPS end-consumers
strengthening its brand, increasing value, and attracting new
customers.