Scribd
Upload
49 views

G6 C Barco Projection Systems

The document analyzes Barco Projection Systems' (BPS) position against a new projector model launched by its competitor Sony. [1] BPS faces major competition from Sony's 1270 model, which outperforms BPS's top projectors in brightness, quality and price. [2] The recommended solution is for BPS to halt other projects and focus resources on developing its next-generation BG800 projector, while also expanding into new markets and incentivizing dealers. [3] BPS needs to commit more to in-house R&D to control its supply chain and technology leadership over the long run.

Uploaded by

KAVYA GOYAL PGP 2021-23 Batch
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
49 views

G6 C Barco Projection Systems

The document analyzes Barco Projection Systems' (BPS) position against a new projector model launched by its competitor Sony. [1] BPS faces major competition from Sony's 1270 model, which outperforms BPS's top projectors in brightness, quality and price. [2] The recommended solution is for BPS to halt other projects and focus resources on developing its next-generation BG800 projector, while also expanding into new markets and incentivizing dealers. [3] BPS needs to commit more to in-house R&D to control its supply chain and technology leadership over the long run.

Uploaded by

KAVYA GOYAL PGP 2021-23 Batch
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 6

Marketing Management 1

Barco Projection
Submitted to: Prof. Saripalli Bhavani Shankar

GROUP 6 |SECTION C

30-07-2021

5C Analysis
Analysis of Company
Barco Projection system (BPS) is the second largest division of Barco N.V with 350 employees
and accounts for 23% of total turnover ($35 million). The company operates in the niche market
of video projectors, and its core strength is its extensive R&D. They have three segments of
products in increasing order of quality and price, namely, Video, Data and Graphic. Their high
scan rates distinguish them from other competitors and have presence in America, Europe and
Asia.

Analysis of Customers
They have a diverse customer base across industries due to different applicability of their
products. Their projector systems are used in entertainment centers, Airplanes, gaming, etc.

Analysis of Competitors
BPS has three major competitors and they are- Sony, Electrohome, NEC (Japan)
Sony: headquartered in Tokyo, it is the largest and second largest player in the video and data
projector segments. Their products are inferior to BPS and are priced 15% lower, however, their
new product, 1270 is better than BPS top projector and is even priced 10%-20% lower.

Electrohome: it operates in graphic and data segments and is the biggest competitor to BPS in
graphic projectors. It is the third biggest company in units sold, right behind Sony and BPS. It
has a distribution network similar to that of BPS.

NEC:With turnover of $21 billion, NEC operated in video and data projector segments. It
pioneered digital projector technology in 1987 but could not caputure market due to poor
distributive networks.

Analysis of Complements and Collobaroation:


BPS collaborated with their distributors. Out of 45 distributors, BPS owned 4 and they account
to 61% of BPS total sales. They also provide price protection for goods that are unsold when
price drops. BPS has also collaborated with Sony to provide them with superioer quality tubes to
attain higher luminosity and quality.

Page | 1
Porter's Analysis of the Industry

Suppliers Bargaining Power (High)


● There is scarcity of quality suppliers in the industry hence increases the bargaining power
of suppliers. Example, Sony is sole supplier of 8’inch tube
● The number of players in the market are less and have become fairly consolidated. This
affects the suppliers bargaining power in a negative way.

Buyers Bargaining Power (High)


● Only a few options of projectors are available to buyers to choose from. Hence the
bargaining power is reduced.
● The companies can engage in a price war between them, which would help the buyers.
This will increase their bargaining power.
● Due to the nature of the product, the switching cost between them is fairly low and hence
improves the buyers bargaining power.

Threat of Substitute (Low)


● There are no identical products to a projector. Hence the industry is not threatened by any
substitutes products.

Threat of New Entrants (Low)


● To enter the market, technical expertise and significant R&D is required. Hence the
possibility of new entrants is reduced
● Apart from the large players, rest of the players have minute presence in the market
● The products have low switching costs hence there is a possible window for a new player
to enter

Competition in Industry (High)


● Most players in the market are technically capable and are actively engaged in R&D-
innovating new products and technologies. This increases the competition.
● There is absence of a market leader in some of the segments hence there is immense
competition among the players.

Problem Statement
Barco is currently facing major competition from Sony’s new model 1270. The new 1270 model
introduced by Sony is leading the BG400 and BD600 of the Barco in terms of brightness, image

Page | 2
quality and resolution. 1270 is available at a fairly low price as compared to BD and BG series
by Barco. Sony was targeting US and European markets which could take away 75% of
forecasted sales of Barco.

1270 was unveiled at a trade show in Singapore and was scheduled to be introduced at
Infocomm in the US in 1990 where major customers, dealers, analysts and dealers would be
present. The problem now for Barco is to maintain it’s image as technology leader and give
competition to 1270 by Sony to maintain its customers, market share and profits. Either it has to
come up with a new product which is at par with 1270 or it has to lower the prices of the existing
product. Long term problem for Barco would be to come up with innovative technologies to
design tubes in house instead of sourcing them from its competitor, Sony and maintain the image
of a technology leader .

Causes of the Problem


● Weak market sensing ability of Barco, it undermined its biggest competitor Sony that
they will introduce something similar to BD600 and Barco would later launch an
upgraded version.
● The 1270 was better in quality than Barcos’ top projector (BG400) but was priced lower
than their mid range projector (BD600). The new projection system by Sony threatens
75% of the sales prediction of BPS.
● Sony is trying to break it’s image as a producer of low end products by conquering the
data and graphics market, this move was not expected by Barco.
● Barco did not incorporate the better 8’’ tube in their upcoming BD700 due to the
redesigning of shapes for the projector’s components.
● Barco had sourced 7” high quality tubes from Sony for their projectors believing that
there is no better quality available elsewhere, but Sony had used 8” high quality tube in
1270 which Barco rejected in 1989 owing to high costs.
● Sony was aiming at capturing Barco’s second largest market (Germany) by taking
advance orders.

Decision Criteria

Revise Pricing Strategy


BPS should price BG400 in accordance with the Sony 1270 and lower its price in order to
prevent losing its market shares as the customer response in the German market was already
good for pre-bookings. In case the prices are not revised, Barco might lose out on huge revenues
from the markets.

New Product Introduction

Page | 3
BPS could launch BD700 as planned and go for the new advancements in BG800 to compete
with Sony 1270 in the late 1990.

BPS can use the technological advancements of BD700 to develop the digital version ‘BG700’ to
compete with 1270 by portraying itself as a first digital upgrade in the market and play to the
strengths of its unique selling propositions.

BPS can also turn to development BG800 which can be designed to surpass the advancements of
Sony 1270. For this, they will have to stop the development of BD700 and divert all the
resources to the development of BG800. But BG800 has only 40% chances of making it to the
Infocomm deadline.

Recommended solutions

● The launch of BD700 can’t compete with the advancements of Sony 1270. So, Barco can
scrap the development of BD700 and use the R&D in the development of BG700 first.
Barco can provide some incentives to the pre-booked customers of BD700 to satisfy the
waiting period.
● Barco can target emerging markets like Australia, Aisa, etc. where it’s not the player for
now but can penetrate the market by expanding its dealer network and distributors. Major
losses could occur in the US and European markets but it could gain some considerable
market share in these emerging markets.
● Putting all the current developments on hold to achieve the development of BG800, to
meet the Infocomm deadline, care should be taken that the quality of the product is not
compromised. It would require the usage of both the 8” tube and the special lens
developed by Fujinon. The availability of the same was a matter of concern for Barco.
● BPS can wait for the price release of Sony 1270 and then release the prices of new
products accordingly. This solution is unlikely to bring about a substantial change in the
market scenario for BPS, as it can not win a price war against Sony.
● Dealers in different markets can be incentivised as per the company’s sale in the region to
upsell BPS over their competitors.

Conclusion
● The most viable solution is to put all the other projects at hold for once and develop
BG800. Meanwhile, a discount can be provided on all the existing product ranges.
● BPS should devote commitment to R&D to retain top quality products and high quality
raw materials in house instead of depending on outsiders for them.
● A look out for more providers of tubes, apart from Sony, can be done so as to avoid any
issues in near future.
● BPS should expand its dealer and distributor network so that their products reach the
emerging markets too.

Page | 4
● They should invest more in technology and research to stay ahead of their competitors at
all times.

Page | 5

You might also like