Company: Barco Projection System Industry: Projector SystemsIn 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 High ...view middle of the document...
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 system to avoid entry of competition back fired as they did not anticipate its competitors' moves. Product development options seems more viable than pricing strategies. BPS needs to decide if they want to continue to target high end users who are willing to pay premium prices or sought out other low end market. Product development could be impacted by this decision. BPS first goal is to win back the market leadership position at the earliest while reducing loses as much as it could. It should continue innovation to come up will less complicated technology which will help them reduce costs which can be shared with customers and distributors.
