2. BARCO PROJECTION SYSTEM
● Formed in early 1980s to pursue video projection tech
● Headquartered in Belgium
● Second largest division of BNV
● 350 employees and 1.39 bn Bfr ($35 million) turnover in 1988, represented 23% of
BNV's turnover
● Designed, manufactured, and marketed sophisticated video projectors for industrial
applications
● Developed three lines of projectors: video, data, and graphics by 1989
● Projectors comprised three major components—tubes (3), lenses (3), and electronics
3. HISTORY OF BARCO
1934:
Began as a producer
of radio broadcast
receivers
1948:
Built its first
television receiver,
consumer TV formed
the bulk of the sales
after this
1955-1975:
Grew rapidly,
expanded into
broadcast monitors
and professional
video equipment
Late 1970s:
Global recession,
company redefined
its focus from
consumer to
industrial markets
1989:
Barco N.V. was one
of the top three
worldwide
manufacturers in each
of its product lines:
automated
production control
systems, graphic arts,
computer-aided
design, and industrial
projection
4. STRATEGY THROUGH 1980’s
Positioned itself to become the market leader in a variety of distinct but complementary, niche markets
Enhanced commitment to Research and Development; 8-10% of turnover & 15% of employees
dedicated to R&D
Expand its international presence in Sales, Product Development and Production via acquisitions and
joint ventures
Reorganized its operation into seven autonomous divisions, each with its own research, product
development, production, marketing and sales.
5. SALES DISTRIBUTION AS OF 1983
Units Margins Revenues
Video 35 20 23
Data 53 29 23
Graphics 12 51 54
All values are expressed as % of total
6. MARKET SHARE AS OF 1988
Barco Sony E.H. NEC Other
0
10
20
30
40
50
60
Market Share in Data
Segment
Market Share in Graphics
Segment
7. SWOT ANALYSIS OF BARCO
Strong commitment to R&D
Global presence and expansion plan
Strong market distribution
Wide range of uses due to high scan rate
Dependence on Sony for tubes
Complex design according to dealers
Huge back-up inventory (inventory for 5 months
it advanced)
Weak market awareness (didn’t see 1270
coming)
Projectors were not competent enough (no
graphics, only industry application)
Growth forecast of 18%in Asian market
Higher margins can be reduced
Global brand
Release of new projector by Sony
Less market price quoted by Sony
Competitors with products having higher scan
rate
8. COMPETITOR ANALYSIS
Sony
• Held the largest percentage(49%) of marketplace in data projection
• 1985: launched 1020 video projector, slower than BPS projectors, better focus
• Had superior quality of tubes
• Supplied tubes to BPS
Electrohome
• Privately held Canadian electronics manufacturer
• Operated in only data and graphics segments
• BPS’s only competition in graphics segment with 44% market share
• Distribution strength comparable to BPS
NEC
•Japanese electronics manufacturer
• Inefficient distribution network
• Estimated to hold 4% (units) of the video market and 9% of the data market
9. SONY’S 1270
BPS
EXPECTATIONS
• Introduced 1270 as “superdata” projector in 1989
• Power to scan - 75kHz
• Major Market focus – U.S. and Europe
• Placed in the market for high performance graphics applications
• Featured new 8” Sony Tube
• Low Price Rumors - Placed in BPS’s data range, at 600,000 Bfr to 800,000
Bfr($15000 - $20000)
• Largest ever publicity campaign - 15000 customers, dealers and
distributers had been invited to 1270’s preview in France
REALITY
• Barco expected new product to be direct competitor for BD600
• Power to scan - 46-50 kHz, priced 10% to 15% lower
• Response planned by BPS: introduce 64kHz digital upgrade of
BD600, the BD700
• Expected SONY to introduce a 75kHz graphics projector in
1990 (800000 Bfr)
10. POSSIBLE COURSE OF ACTION
Cutting the price of BG400
• Arguments in favor-
• Realizing the cost incurred and
the employee efforts already put
in
• Retaining market share by
competing against SONY
• Arguments against-
• Could not compete with Sony in
case of Price War
• Could change the consumer
perception of product as inferior
to SONY
Introducing new model BG700
• Arguments in favor-
• Could use the advances made in
BD700 [First Digital Model (by
Oct), scanning frequency:
64kHz] as a springboard to
BG700
• Arguments against-
• Would cause delay in BD700
delivery; loss in credibility
• Lower picture quality as
compared to 1270 as the picture
tube used is 7”
Development of BG800
• Arguments in favor-
• Could compete with SONY
1270
• Inline with the company’s vision
to be a leader in niche market
• Arguments against-
• Delay in BD700 leading to
credibility loss
• Overburden on employees; 40%
chance of meeting the deadline,
with all other activities stopped
• Uncertainty of getting the special
lens from Japanese firm which
supplied to Sony
11. RECOMMENDATIONS
● Completion of committed orders for BD700
● Analyzing the possibility of hiring more engineers to complete the product development of
BG800 in time
● Find cheaper substitutes of tube suppliers and manufacturing components
● Try manufacturing its own tubes
