Barco Group 5

Arnab Sinha – 21P069

Arpita Mathur – 21P070
Manan Jhunjhunwala – 21P089
Manjari Kulshreshtha – 21P090
Karan Shah – 21P109
Shikhar Kansal - 21P110
 Company information and background

1934 - Began as a
producer of Radio
Projection System
broadcast receivers
• Formed in early 1980s to pursue video projection tech. Second largest
division of BNV with 350 employees and 1.39 bn Bf turnover
1955-1975 : Expanded • Headquartered in Belgium and represented 23% of BNV's turnover
into broadcast monitor
and professional video
equipment

1984 : Built its first

Barco Product Lines
television receiver • Barco Vision 1 priced at $11,250
• Barco Data 1 priced at $ 13,500
• Barco Vision 2 priced at $ 9,875
1989: Barco became • Barco Data 2 priced at $ 14,750
one of the top 3 • Barco Graphics 400 priced at $ 25,000
manufactures in its • Barco Data 700 priced at $ 16,000
product line
 Current status of Barco
Barco
• Barco N.V. is one of the top three
worldwide manufactures with a focus
on expensive high quality products in a
niche market.
• It focuses on graphic projectors, which
has the maximum growth and revenue
in the projector market.
Market share and competitors
• Barco’s market share are as followed:
• 4% in video projectors
• 23% in data projectors
• 55% in graphic projectors
• Major competitors to Barco are Sony,
Electrohome, and NEC
• The product that would compete with the Sony
1270 (BG 800) had a 40% chance of being
completed by the Infocomm trade show
Evolution of Barco’s Product Lines and Markets
1981

1983

1984

1987

1989
Three new
projectors were
developed by
Developed video BPS had
BPS: the BV2
projector for introduced the
and BD2, which BPS introduced T​he BD700 was
showing motion BarcoData 1
included its first graphics scheduled for
pictures in (BD1) the first
engineering projector, the full production
airplanes computer-
advancements BarcoGraphics and delivery in
compatible
Launched that allowed for 400 (BG400) October 1989
projector in the
BarcoVision 1 greater scan
marketplace.
rates and,
hence, broader
compatibility.
 Analysis: SWOT Analysis

Strengths
• With a global reach and a market share of 55% in the graphics category
• Superior performance when compared to peers using the same lens and tube combination
• High quality and dependability have earned a strong reputation among dealers
• Increased engineer workforce dedication and R&D spending

Weaknesses
• Unnecessarily complicated and unfriendly to users
• Sony is heavily reliant on it for the supply of projector tubes (a critical component)
• Huge investments and a stockpile of obsolete products (BD700)
• Sony's innovation skills were underestimated, which upset its plans and predictions.
 Analysis: SWOT Analysis

Opportunities
• Invest in R&D and create the BG800, which will be able to compete with Sony's 1270 in the future.
• Launch the BD700 and use enhanced marketing techniques to build sentiment in the data segment.
• Discounts and price reductions are possible.
• In Asian markets, projectors are growing at a rapid pace.

Threats
• Market share decline with the debut of Sony's 1270 (superior in quality and cheaper in price)
• Customer and dealer connections are expected to suffer if the BD700 plans are abandoned
• Absence of a suitable product (for 8"tube) from Barco's existing lens supplier
• Peer marketing initiatives with large budgets
 Analysis: Porter’s Five Forces Analysis
Industry Rivalry
• The market is dominated by Barco,
Sony, and Electrohome.
• Sony controlled 45 percent of the
global projector market, followed
by Barco (35%) and E.H. (14%)
Buyer’s Power
• Barco has an excellent brand
image and dependability, and it
charges a 15% premium.
• Low cost of switching; rising
demand for digital projectors with
higher scan rates
Threats of Substitutes
• Sony's 1270 ‘super-data' projector
with superior technology, capable
of influencing Barco's market
• BPS predicted that it would lose
75% of its earnings in 1990 with the
debut of Sony's 1270
• Sony provides higher-quality
projectors at lower prices than
Barco's BG400.
Threat of New Entrants
• R&D centers cost a lot of money to
set up
• Space with a high level of
technology, as well as evolving
market and product line
Supplier’s Power
• Sony is the exclusive provider of
Tube (main component of
projector) and has a 30% margin
over Barco Distributors.  
• Sony goods were discounted by
dealers at  15% vs. 10% of Barco's
 OPTION 1: CONTINUE TO DEVELOP BD700

Opportunities: Risks in suspending:

1. The BD700 is a digital projector and a better generator with a 1. Postponing the BD700 project resulted in a disillusioned staff
higher scanning frequency. and dissatisfied consumers.
2. In 1990, sales was expected to be $17.2 million. 2. Abandoning BD700 manufacturing plans in favor of BG700 or 800
3. German wholesalers had placed orders for $16,000 by would likewise fall short of Sony 1270's performance at
September 1989. InfoComm.

Conclusion: Barco should continue with its original plans of producing BD700 by committed date of October 1989.
Reasons:
• BPS' sales and profit were considerably higher in the data sector than in the graphics section.
• Both worldwide and within each area, Barco is ranked second in the data category.
• The data segment is expected to increase at the fastest rate from 1989 to 1994.
• Because BPS generated 61 percent of its sales and revenue through its own fully owned distributors, they were not subjected
to pressure from other distributors over concerns about the success and price of Sony 1270.
• Suspending BD700 plans in favor of BG700 or BG800 was jeopardizing customer and distributor relationships.
• Sony's claim that the 1270 will be available in November 1989 was merely an announcement, and even the pricing was based
on speculations.
• As a result, it was inappropriate for Barco to put its BD700 plans on hold while 86 percent of manufacturing had already been
completed.
OPTION 2: DIGITAL GRAPHICS PROCESSOR BG700

The BPS BG700 Graphics Projector might be developed as a stop-gap device to compete with Sony's 1270.

Opportunities: Threats:
1. BPS could create the device in two to three months if
1. BPS would be introducing a lower-quality product into
they used their BD700 advancements to develop it in
the market, forcing them to compete on price rather
time for InfoComm 1990.
than performance, which is incompatible with their
2. They could utilize the same chassis, lens, and tubes as
goal and bad for their brand's reputation.
the BD 700, lowering extra input costs and allowing
2. The BPS development team would have to shift their
them to compete on pricing.
attention away from the present BD700 development.
3. The BG700 may be a well-priced device that mitigates
3. Major distributors have already placed orders for
the impact of the Sony 1270's introduction.
BD700; any adjustment would have a negative impact
4. The BG700 will allow BPS to assess the market reaction
on employee and consumer morale.
to the Sony 1270 in comparison to a competitively
4. BG 700 pricing was not considered into the company's
priced BG700 with performance close to that of the
sales projections for 1989 and 1990, and competing on
Sony 1270.
price would have a negative impact on revenue and
5. Enough time to fine-tune the BG 800 and market it as a
profitability.
superior product in late 1990, as anticipated.
 OPTION 3: START DEVELOPING BG800

Conclusion: Rushing the BG800 launch to meet the InfoComm deadline would be extremely hazardous. It would also put
existing goods in jeopardy. To create a quality product, the ideal choice would be to continue research and development on
the BG800 and follow the complete product development lifecycle. Meanwhile, the business might try to stay afloat in the
market with its other models, the BD700 and BG700.
Reasons:
• Barco had already spent 180 person months on the BD700, therefore skipping the BD700 launch in favor of the BG800
would be a bad choice.
• Though Sony Components was ready to start shipping the 8” tube, it also required a unique lens, which BPS's usual lens
supplier, USPL, did not have.
• At least 80 person-months would be required to develop the BG800 with a scanning frequency of at least 90KHz and new
tubes.
• Even though they possessed the capability of creating and delivering a fantastic machine, rushing the development of the
BG800 would entail sacrificing product quality.
• There was only a 40% chance that BG800 would be finished by InfoComm, and even that would need halting all other BPS
development projects, including the BD700, right now.
• There was no word on when the 1270 would really be released, how it would be priced, or how people would react to it.
 RECOMMENDATIONS

• Barco should continue to produce their first digital model BD700, which is 85 percent complete and has already received
pre-orders.
• By using their large R&D teams and providing overtime and incentives at this key moment, Barco could accelerate the
delivery and launch of the BG700.
• Because the concern of Sony lowering their pricing was based on impression and hearsay rather than actual quantitative
evidence, Barco should not lower their prices in reaction to Sony's 1270. Furthermore, lowering prices would start a
pricing war that would be difficult for BPS to maintain.
• Pricing influences a product's positioning and perception, and the business & BPS already had a reputation for being
viewed as a higher-quality product. They should keep the pricing the same in order to retain their reputation as a niche
producer.
• They may, however, be able to reduce the price of their previous product, the BG400, which is now sold at $24,000 but
costs roughly $17000. As a result, in order to remain competitive, the BG400's price must be cut to $19125. (12.5 percent
margin).
• They may increase their marketing and promotional activities in order to retain existing customers, as well as tap into
growing markets in Asia and abroad to profit from their recent acquisitions.
Thank you