Company: Barco Projection System Industry: Projector Systems
In the late 1970's, BPS moved from producing radio broadcast receivers to the market of projectors based on a clear vision which market they could serve better and focused on research & development to come up with top quality product and launched several activities aimed at global expansion. As a result, BPS was the market leader in high end graphic projectors because of technologically superior quality. But in 1989, Sony introduced 1270 Superdata Projector at the Siggraph trade show in Boston and won the first place in Highest Performing Projector category from BPS' BG400, much to the surprise of Barco. 1270 was also price about 20-40% lower than Barco's projectors. This put BPS under pressure to sustain the attack from a giant company such as Sony and come up with measures to counter attack.
1. How serious a threat is the Sony 1270?
Though Sony was one of the top competitors to Barco, Barco did not expect Sony to come up with a product such as 1270 and it was caught off guard.
Barco's assumption that Sony concentrated mainly on basic projects and didn't want to invest in R&D for high end projectors proved to be wrong. Moreover Sony supplied one of the important component to BPS's projectors, tubes. Therefore, BPS has to reply on Sony for tubes until they find other comparable suppliers. Sony could easily stop supplying tubes to BPS and cut down its sales. In all, Sony's 1270 was a serious threat to BPS.
2. What should Barco do with respect to price? Product development plans?
BPS should reduce price as it will only result in price war with Sony who has the competitive edge now with its lesser complicated, high quality projectors. BPS's strategy to have a complicated...