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Barco Projection Systems Case Study
This document discusses Barco and Sony's positions in the projection market. It analyzes their strengths and weaknesses compared to each other. Sony introduced a new high-quality projector, the 1270, which threatened Barco's market share. The document considers how Barco should respond, concluding that lowering prices below Sony's 1270 would be the best option since Barco lacked a direct competitor at that time.
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Introduction of the case study on Barco Projection Systems, presented by five team members.
Barco is a leading manufacturer in graphic projectors with significant market shares (4%, 23%, 55%) and major competitors include Sony.
Barco's superior scan rate versus Sony, with 20% box dealers and 80% system dealers.
In data projection, Sony leads, while Barco dominates graphics. Performance-wise, Barco ranks higher.
Sony's pricing is 15% lower than Barco, with higher dealer coverage in the U.S. (500 vs 100).
Sony's video equipment is widely carried by 80-90% of professional audiovisual dealers.
Sony has a competitive edge with higher quality tubes and is now Barco's sole supplier.
Sony launched the 1270 with superior features (75 kHz scan rate) compared to Barco’s models.
Sony introduced the 1270 projector as a strategic move in the market.
Comparison of positioning: Sony as affordable/reliable versus Barco as high-quality market leader.
Barco underestimated Sony's competitive tactics by not anticipating the release of independent components.
Barco's component purchase strategies delayed production; Sony's knowledge of Barco's processes.
Sony's 1270 projector, priced at $15,000, could lead to a 60% loss in Barco's market share, translating to $307.5 million.
Barco's possible responses include lowering the price of its projectors and developing competitive models.
The best strategy for Barco is to lower prices to remain competitive against Sony's 1270 projector.
Barco Projection Systems Case Study
- 1. Barco Projection Systems A Case Study by Brendan Cronin Belinda DeSousa Megan Cruz Patrick McHugo Mike Wallace 1
- 2. Current Position • BarcoN.V. is one of the top three worldwide manufactures with a focus on expensive high quality products in a niche market. • It focuses on graphic projectors, which has the maximum growth and revenue in the projector market. • Barco’s market share are as followed: – 4% in video projectors – 23% in data projectors – 55% in graphic projectors • Major competitors to Barco are Sony, Electrohome, and NEC • The product that would compete with the Sony 1270 (BG 800) had a 40% chance of being completed by the Infocomm trade show 2
- 3. Barco’sstrengths and weaknessesas they relate to Sony. Barco’s Strengths: •Barco’s products had a better scan rate than Sony •Barco’s dealers were 20% box dealers and 80% system dealers. •Sony’s dealers were 50% box dealers and 50% system dealers.
- 4. Barco’sstrengths and weaknessesas they relate to Sony. Sony’s and Barco’s Market Strengths: •In data projection, Sony held largest % of the market place. •In graphics, Barco was number one in the market. •In terms of performance, Barco ranked higher than Sony.
- 5. Barco’sstrengths and weaknessesas they relate to Sony. Sony’s Price and Dealer Strengths: •On average, Sony’s products are priced 15% lower than Barco’s products. •Sony’s discount for the final sale: 15% •Barco’s discount for the final sale: 10% •Sony’s dealer coverage in U.S: 500 •Barco’s dealer coverage in U.S: 100
- 6. Barco’sstrengths and weaknessesas they relate to Sony. Sony’sDealer Strengths: •An estimated 80% to 90% of professional audiovisual dealers worldwide carried Sony video equipment. •This help build Sony’s reputation for reliability and low prices among dealers.
- 7. Barco’sstrengths and weaknessesas they relate to Sony. Sony’sSupplier Strengths: •Sony produced higher quality tubes over Barco’s supplier Clinton. •Sony is now Barco’s sole supplier. •Sony has a new competitive edge over Barco
- 8. Barco’sstrengths and weaknessesas they relate to Sony. Sony’sStrengths: •Sony released new model, the 1270, which has the power to scan to 75 kHz and has an 8” Sony tube that Barco declined to use due to shape. •Currently, Barco’s highest scan rate offered is 72 kHz. (Model: BG400)
- 9. Why Did SonyIntroduce the 1270? Because it could.
- 10. Sony &Barco Sony Barco • Position- Affordable, • Position- High-Quality Reliable • 20% Box, 80% Systems • 50% Box, 50% Systems Dealers Dealers • Relied On Main Competitor • Develop Component Parts for Necessary Component • Produced only Data and Parts Video Projectors • Produced All Projectors, Controlled 55% of Market for Graphics Projectors
- 11. Barco Should’ve Seenit Coming • 1987- Sony introduced a video projector with components not made available to Barco • Barco was Naïve: Believed Sony would respect the company’s “vision” of the marketplace
- 12. Timing • Barco purchasedcomponents 5 months in advance- Halting the production process • Sony had a working relationship with Barco, probably would have known they were working on new projectors • Introduced with 4 Months until Infocomm show in Jan. 1990
- 13. What Would SonyGain? • Priced at $15,000, the 1270 would cause Barco to lose 60% market share to Sony ($307.5 million) • At this price, the 1270 would also steal customers from the BD600 ($12,000) • Sony would ultimately gain the market position of high-quality
- 14. How Should BarcoRespond to Sony? They could: •Lower the price of BPS to be less than the 1270 •Develop a competitive projector, the BG800 •Continue on schedule and complete the BD700
- 15. The Best Option •The best option would be for BPS to lower their prices less than Sony. That is because they don’t have a product that can directly compete with the 1270, so to have their products priced thousands more than the 1270 would cause them to lose the most business.