Barco Projection Systems Case Study

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Barco Case Study

Marketing 613

Beta 1:

Rakesh Anegunta

Suryakant Kaushik

Eva Martinez  

Jacob Melear

PURPOSE OF THE REPORT

        Barco Projection Systems is the second largest division within Barco N.V., a small, batch manufacturer that competes in niche technology markets worldwide.  Barco has developed into an industry leader by investing in a robust R&D department and specializing on high end products. As a projector manufacturer, Barco concentrates on the data and graphic segments, and is an award winner for technological advancement. Sony is a competitor in the projector market, but has historically concentrated in low and medium technology segments.  In August 1989, Sony threatened to disrupt the projector industry by introducing the model 1270, which was technically superior and priced lower than Barco’s flagship projector, the BG400. This move from Sony caught Barco off-guard and threatened to capture Barco’s market share in the high end segment. Barco was left with three options for product development and pricing strategy to counter the move by Sony and avoid being relegated to second place in Barco’s most profitable market segment.  

RECOMMENDATION

        Barco has meticulously and purposefully built its business and reputation around being a technology leader. Management is unwilling and unable to enter a protracted price war with Sony. Its best option to respond to the introduction of the 1270, is to build a superior projector and re-capture the technological edge. Barco should immediately cease production of the BD700 and shift all resources to the development and production of the BG800, a projector that will outperform the Sony 1270.  If Barco is able to roll out the BG800 by Infocomm in January, 1990, it will maintain market share. To meet this deadline, Barco must immediately shift the entirety of its engineering efforts to this new product and identify a supplier for a compatible lens.  While Barco will be able to source an 8” tube from Sony in the short term, management must turn their attention to finding another supplier to avoid being at the mercy of a competitor for a key component.  

ANALYSIS

“Barco’s Product Line and Strategy”        

        Barco is a leader of top of the line products and one of the top three manufacturers in each industry that it participates in.  Barco spent 8% - 10% of its annual turnover in R&D, something that most ^[a]large corporations were unable, or unwilling to do. This allowed Barco to gain a foothold and provide niche technological needs.  

Note: Barco projectors were not compatible to any computer scanning higher than 64 kHz.