BARCO PROJECTION SYSTEMS

Case Study By: Group 2, Section A

Aditya Mohapatra 21PGHR003

Aishwarya Chaudhary 21PGHR004
Ayush Bajpai 21PGHR023
Ayush Chauhan 21PGHR024
Lubna Memon 21PGHR043
Kriti Raheja 21PGHR044
 BARCO’S BACKGROUND
AND HISTORY
1955-
1934 1948 1989
75

Expanded into broadcast Shifted focus from consumer

Started as a producer of Radio
broadcast receivers​
Built its first television
monitor and professional
receiver​
video equipment​, in 1970’s
global recession made
consumer demand sag
to industrial markets and
became one of the top 3
manufacturers in each of its
product line​

BARCO's Projection System: BPS Product lines:

• Formed in early 1980s to pursue video projection tech. • Differentiated by scan rate –
• Second largest division of BNV • Video projectors – 16 kHz
• 350 employees and 1.39 bn Bf turnover • Digital Projectors – 16-45 kHz
• Headquartered in Belgium • Graphic Projectors >64kHz
• Represented 23% of BNV's turnover • Created demand for graphic projectors by limiting scan
rate of digital projectors
 Strategy through the 1980s
Positioned
Positioned itself
itself to
to become
become the
the market
market leader
leader in
in aa variety
variety of
of distinct
distinct but
but complementary,
complementary, niche
niche markets
markets

Enhanced
Enhanced commitment
commitment to
to Research
Research and
and Development;
Development; 8-10%
8-10% of
of turnover
turnover &
& 15%
15% of
of employees
employees dedicated
dedicated to
to R&D
R&D

Expand
Expand its
its international
international presence
presence in
in Sales,
Sales, Product
Product Development
Development and
and Production
Production via
via acquisitions
acquisitions and
and joint
joint ventures
ventures

Reorganized
Reorganized its
its operation
operation into
into seven
seven autonomous
autonomous divisions,
divisions, each
each with
with its
its own
own research,
research, product
product development,
development,
production,
production, marketing
marketing and
and sales.
sales.
 Industry Market Share (1988)

60

50

40

30

20

10

0
Barco Sony E.H. NEC Other

Market Share in Data Segment Market Share in Graphics Segment

 BPS Sales and Margins by
Segment (1988)
Margins

20%
29%

51%

Units Revenues
Video Data Graphics
12%
35%
23% 23%

53%

54%

Video Data Graphics Video Data Graphics

 SWOT Analysis
Weakness:
Strengths: •Distribution channel is comparatively less
•Top 3 worldwide manufacturers strong
•High end quality products •No in-house manufacturing of components
•Focused on R&D • Has to rely on third party for tubes and
•80% of dealers are service dealers S lenses

T W

Threats:
•Competition from Sony’s new
launch 1270.
• Dependence on Sony for tubes
O
Opportunities:
•Can use 8” tubes in the new launch, BG800
•Scope of expansion in Asian Market
Major Competitors for BARCO
Sony
• Held the largest percentage(49%) of marketplace in data projection
• Industrial projectors, represent 1% of total company’s turnover
• 15% lower in price than Barco’s projectors

NEC
• Video and data projectors
• 4% of video market and 9% of data market worldwide

ElectroHome
• BPS’s only competition in graphics segment with 44%
• Operated in only data and graphics segments
• BPS’s largest competitor in graphics
• Distribution strength comparable to BPS
 SONY’s New Model – The 1270

Expectations
•Barco already had an idea that Sony was bringing out a new
product
•Direct Competitor for BD600
•Power to scan - 46-50 kHz
•10% to 15% lower prices
•High brightness, image quality and resolution
•SONY’s 75kHz graphics projector in 1990 (800000 Bfr)
•introduce a 64 kHz digital upgrade of BD600 (the BD700)
•Threat of a industry losing a great deal of money
Reality
•Show Stealer
•Power to scan - 75kHz
•Major Market focus – U.S. and Europe
•Placed in the market for high performance graphics applications
•New 8” Sony Tube
•Low Price Rumors - Placed in BPS’s data range, at 600,000 Bfr
to 800,000 Bfr($15000 - $20000)
•Largest ever publicity campaign - 15000 customers, dealers and
distributers had been invited to 1270’s preview in France
 Analyzing Alternatives
A B C
Cutting
Cutting the
the price
price of
of BG400
BG400 Development
Development of
of BG800
BG800
Introducing
Introducing new
new model
model BG700
BG700
Arguments in favor- Arguments in favor- Arguments in favor-
• Realizing the cost • Higher scanning • Surpassing SONY 1270
incurred and the frequency to compete • Inline with the
employee efforts put in with SONY’s 1270 company’s vision to be a
over past 6 months • Retaining market share leader in niche market.
• Retaining market share by competing against Arguments against-
by competing against SONY’s 1270 • Delay in BD700 leading
SONY Arguments against- to credibility loss
Arguments against- • Delay in BD700 delivery; • Overburden on
• Leads to Price War loss in credibility employees; 40% chance
• Changing the consumer • Lower picture quality of meeting the deadline
perception of product as and resolution as the • Feasibility of getting the
inferior to SONY picture tube used is 7” special lens from
Japanese firm is low
 Recommendations
Completion of committed order for BD700 and later give full
priority to the BG800

Analyzing the possibility of hiring more employees to

complete the product development of BG800 in time, and
price it above the 1270
To reduce the prices of BG400, BD600 & BD400 relative to
1270 and BG800 as soon as BG800 is launched

Find cheaper substitutes of tube suppliers and manufacturing

components
THANK YOU