Barco Projection Systems Case Study
Barco projection system:
Problem: Introduction of 1270 super data projector by Sony which has better performance and also rumoured to be cheaper than the best projector of Barco projector system available in market threatens to eliminate the niche segment of Barco. Now it has to decide its future course of action to save its niche market and survive in the market.
Possible alternative for Barco system:
Develop BD700 :Introduce BD 700 immediately in October and followed by development of superior BG 800
Develop BD700 followed by BG700
Develop BG800 instead
Recommendation:
BARCO should go with option 3, i.e. stall the development of BD700 and develop BG800 instead because:
If 1270 is priced at higher end (20000) the price per scan rate indicates that BD 700 is viable price wise though its sales will still suffer because 1270 is a better product
In case 1270 is priced at the lower end (15000) then price per scan rate for BD700 would make it unviable.
We consider developing BD700 risky because here Barco will completely depend on Sony’s pricing strategy. Overall Sony leverage to charge lower prices is greater than Barco’s.
So Barco should drop the development of BD 700 and BG 700 and direct all resources and manpower for development of BG 800 to complete the development before Infocomm. BG is superior to 1270 and it would help BPS regain its niche market in high end graphic section.
While option 3 is the most risky (40 % chance to make it in time for Infocomm) and expensive (80 man-months) it is the only way that Barco can maintain product leadership