1. What product development strategy would you recommend? Which product(s) should the company pursue? Which should phase out? BPS is threatened by Sony introduction of the 1270 projector that has a better performance and much lower price than BPS projectors. BPS could lose as much as 75% of its 1990 forecasted profits, from 30% to 60% market share loss in the graphics segments, and erosion in sales in the data segment. BPS lacks a consistent strategy for marketing and product development since product evolution at BPS was "more a result of engineering solutions to problems that arose than a specific development plan" , and as a nicher BPS has failed to protect and to create more niches. BPS also lacks a competitor intelligence strategy and furthermore it assumed that competitors (like Sony) would respect forever their vision of the market place.
Therefore, we recommend developing a Marketing and R&D strategy that helps BPS to achieve the following:
1.1 Increase efforts to encourage innovation and promote new product generations aimed to support Barcos' mission of being the technology leader among the 3 top manufacturers. Innovation can also lead to create new profitable niches or segments, as BPS successfully did creating the graphics segment in 1987 with the BG400 projector. The effort consists in increasing the budget for Marketing and R&D considerably above the 1989 level of 8.7% of revenue (see Exhibit 1) to even a double level in the first year. The new budget must be applied mostly to develop the data and graphics segments that have higher projections in growth and market share for BPS (Exhibit 2 shows growth and market share projections for 1989-1994), as well as to develop new segments.
1.2 Concentrate in creating simpler and more user friendly products. New characteristics of next product generations should include...