Barco Case

Problem Statement: In the light of the recent development, Barco has to decide which product amongst BD 700, BG 700 and BG 800 to introduce. Analysis : Desperate Times Call for Desperate Measures. After the recent introduction of 1270 Projector by Sony, all the plans and projections of Barco have gone awry and moving towards the development of BG 800 seems to be the best option. The SWOT Analysis below illustrates the same : Development of BG 800 – SWOT Analysis StrengthsWeaknessesOppurtunitiesThreat Can help Barco Maintain its Market Share.

Strict Deadline to Meet.

Market for Projectors expected to grow @ 8. 5 % and for Graphic Projectors @ 40%. Fujinon does not agree to supply lens. Better Product than Sony 1270. Exhausted Human Resource.

BG 800 can be a market leader and a new industry standard. Sony Components stop supplying 8 inch tubes. Can save Barco from losing 75% of its forecasted 1990 profits. Sony starts a Price War. BD 700 : One of the three options is to continue with the development of BD 700 considering the fact that the company has already spent a lot of time and money on its development and orders had started pouring in already.

This is a digital upgrade of BD 600 but in terms of performance it does not match with Sony 1270.

It will not be able to compete with Sony 1270 in terms of price, BD 700’s tentative price is 16000$ and the Sony 1270 is expected to be priced in the range of 15000$~20000$. If Barco goes ahead with the production of BD 700, it will have no product to match Sony 1270 either in terms of performance or price and 1270 will make a dent not only in the Data Segment but also in the Graphics Segment.

BG 700 : It has a 7 inches tube and will suffer in performance when compared with Sony 1270 on various parameters :- light output, Picture Quality and Resolution. It will get very difficult for Barco to market and sell this product, it might have to resort to price war with Sony which will only dent the bottom line. BG 800 : Sony planned the largest ever publicity campaign in industrial projection history which means it is entering the market not to be a player but a winner.

Sony 1270 will define the industry standard in terms of price and technology for times to come, if not confronted with a equally good or even a better product. Sony 1270 will change the dynamics of the industrial projection market and if Barco does not introduce a product like BG 800, 1270 will capture market share in both Data and Graphics Segment. Barco also stands to lose 75% of its forecasted 1990 profits with the introduction of Sony 1270. Though Claerbout gave BG 800 only a 40% chance to make it to the Infocomm deadline, it is a risk worth taking.

There are lot of challenges in terms of procuring the lens from Fujinon, Exhausted Human Resources and a strict deadline to meet, however BG 800 is the only product which can take Barco out of its current situation.

Claerbout is confident that Barco can make a better product than Sony 1270, he has to ensure that the compression of the development does not have repercussions on the quality of the final product. The development of BG 800 would mean that the development cost of BD 700 will have to be treated as a sunk cost, Barco will also have to be extra cautious and coercive to ensure that Fujinon agrees to supply the lens.