Barco Case

ÖZET:

Erik Dejonghe: Barco N.V. COO

Frans Claerbout: GM of BPS

Bernard Mursin: Manager of subsidiaries

Issue to Solve: One of Barco’s competitors (Sony) will launch a new product (1270 superdata projector) very soon in the Infocomm tradeshow. Barco’s best product is BG 400 currently (Barco Graphic Projector) and Sony’s new 1270 will be cheaper (btw %20-%40 acc. to rumors) than BG400 while having better performance (actually will be the best in the market). This attack of Sony can create a huge loss of BPS (Barco Projection Systems) up to %75 of profits in 1990.

Barco’s STRATEGY:

• Barco committed itself to becoming a leader in a variety of distinct, but complementary niche markets. (top products in the niche markets)
• R&D is vital for Barco; %8-%10 budget of its annual turnover; %15 of employees are R&D people.
• Barco seeks to grow in international sales, product development and production.
• Video projector segment is commodity. Therefore, BPS spends less effort on that segment and focus on technological high end products.

Barco’s Product Lines:

• Automated production control systems
• Graphic Arts
• Computer aided design
• İndustrial production

BPS has Three lines of Projectors: (what differentiates BPS projectors ? Scan Rate !)

• Video → TV broadcasting and VCR. 16khz power
• Data → personal computers as well as video sources. 16khz-45khz power
• Graphic → sophisticated products, including video-data duties but has more like powerful computer aided design and manufacturing. 16khz-64khz power.

(!) Weak points is Barco’s highest scan rate is 64khz currently. If a competitor has a better scan rate projector, what’s gonno happen ;)

(!!) Barco focused on data and graphics projectors. These 2 projectors requires use of technology, R&D and more profitable.

(!!!) in 1981, Barco Vision (BV1) created. Target markets are Europe and USA.

(!!!!) For the future, Barco has chosen a strategy to focus on computer applications. To support this strategy, Barco should have:

• Higher scan rates
• Flexible design for scanning frequencies so that computer companies with different standarts could use it.
• Complexity is appreciated. The more complex product Barco has, the lower possibility a competitor can do similar one.
• Application shpuld expand projection markets.

Projectors comprised 3 major components:

• Tubes → Barco’s product line based on 7” tubes. ! (Tubes hold %15 of the costs of a projector)
• Lenses → (Lenses hold %20 of the costs of a projector)
• Electronics → Barco’s traditional strength comes from elecronics. With the same tubes and lenses, Barco can create better projectors than competitors. (Electronics hold %50 of the costs of a projector) …The remaning costs %15 are mechanics and housing…

How Projector Performance is evaluated ?

• Brightness
• İmage Quality
• Resolution

in 1983 → Barco Data; 1st computer compatible projector, 13500$

in 1984 → BV2, 9875$ and BD2, 14750$

From 1984 on, Barco not only continue to produce video and data projectors, but also started to work on graphics projectors to use its technology.

in 1987 → Barco presented its first graphic projector BG400, 25.000$. BG400 has scan rate up to 72khz. In 1989, BG 400 was priced at 24.000$.

[pic 1]

Barco’s product line:

BD600 → data projector with 45khz power, 12.000$