Barco Projection Systems Case Study
Current Position
Barco N.V. is one of the top three worldwide manufacturers with a focus on expensive high-quality products in a niche market.
It focuses on graphic projectors, which have the maximum growth and revenue in the projector market.
Barco’s market share is as followed:
- 4% in video projectors
- 23% in data projectors
- 55% in graphic projectors
Barco’s Strengths and weaknesses as 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.
Barco’s Strengths and weaknesses as they relate to Sony.
Sony’s and Barco’s Market Strengths:
In data projection, Sony held the largest % of the marketplace.
In graphics, Barco was number one in the market.
In terms of performance, Barco ranked higher than 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 the U.S: 500
- Barco’s dealer coverage in the U.S: 100
Barco’s Strengths and weaknesses as they relate to Sony.
Sony’s Dealer 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.
Sony’s Supplier 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
Sony’s Strengths:
- Sony released a 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)
Sony & Barco
Barco Should’ve Seen it 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
Timing
- Barco purchased components 5 months in advance- Halting the production process
- Sony had a working relationship with Barco, and probably would have known they were working on new projectors
- Introduced with 4 Months until Infocomm show in Jan. 1990
What Would Sony Gain?
- 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
How Should Barco Respond 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
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.
