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Barco Projection SystemsA Case Study by

Brendan CroninBelinda DeSousa

Megan CruzPatrick McHugoMike Wallace

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Current Position• Barco N.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

Barco’s strengths and weaknesses as they relate to Sony.

•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:

Barco’s strengths and weaknesses as they relate to Sony.

•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.

Sony’s and Barco’s Market Strengths:

Barco’s strengths and weaknesses as they relate to Sony.

•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

Sony’s Price and Dealer Strengths:

Barco’s strengths and weaknesses as they relate to Sony.

•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 Dealer Strengths:

Barco’s strengths and weaknesses as they relate to Sony.

•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 Supplier Strengths:

Barco’s strengths and weaknesses as they relate to Sony.

•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)

Sony’s Strengths:

Why Did Sony Introduce the 1270?

Because it could.

Sony & Barco

Sony• Position- Affordable,

Reliable• 50% Box, 50% Systems

Dealers• Develop Component Parts• Produced only Data and

Video Projectors

Barco• Position- High-Quality• 20% Box, 80% Systems

Dealers• Relied On Main Competitor

for Necessary Component Parts

• Produced All Projectors, Controlled 55% of Market for Graphics Projectors

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, 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.