Barco Project Systems Analysis
Essay by enemalo • September 29, 2016 • Case Study • 1,224 Words (5 Pages) • 1,608 Views
Barco Projection Systems Case
Overview
Barco Projection Systems (BPS) is a division of the Barco N.V Corporation which was founded in 1934. The company was in the business of manufacturing radio and television broadcast receivers, professional video equipment and broadcast monitors. As the company grew, it formed a separate division called BPS, which focused on designing, producing, and marketing high quality, industrial projector screens. Although this was a niche market, BPS maintained a clear vision of who they wanted to be, how they wanted to operate and where they wanted to compete.
The BPS division was primarily involved in three different types of projectors: video, data, and graphics. Components for the projectors included three tubes, three lenses, and electronics. The production lines at the manufacturing facilities were customized for the 7-inch tubes.
A key advantage that BPS maintained was due to the segmentation of its products by scan rates. This referred to the speed at which electronic signals were measured on the devices. The video projectors were set to measure standard scan rates of up to 16kHz for TV and VCR use. The next higher tier was for the data projectors which could reach scan rates between 16 – 45 kHz. These data projectors could display output from both computers and video sources. The third and highest-tier product line was for the graphics projectors with scan rates ranging from 16kHz all the way up to over 64kHz. The sophisticated graphics projectors could transmit input from video, data and complex manufacturing systems.
In term of competition, BPS mainly competed with three other firms in the niche market for industrial data and graphics projectors. These included Sony, Electrohome and NEC. Other firms which engaged in similar operations, but competed in low-scanning devices and video projectors included Panasonic and GE. However, these companies were not considered as major competition since BPS focused more on industrial customers than commercial.
The Sony 1270
When Sony introduced the 1270 – which was capable of scan rates of up to 75kHz, it shocked the industry as a whole. In particular, BPS did not believe that Sony was able to design such a sophisticated machine so quickly. Erik Dejonghe, Senior VP and COO of Barco N.V commented that “All of our projections, however, were based on the assumption that Sony would respect our ‘vision’ of the marketplace.” Dejonghe was referring to the unusual relationship the two companies shared through Sony supplying high quality tubes to BPS for the manufacturing of projectors, despite being in direct competition. Perhaps Dejonghe was convinced through this act that Sony would not aggressively compete with BPS.
Arguably, Sony had decided that they no longer wanted to be seen as a ‘low-priced, medium-quality’ producer and therefore wanted to compete more aggressively now. They wanted to shift the market perspective about them to reflect firmness and innovation.
For BPS, the Sony 1270 should be taken very seriously as a threat. For one, Sony has now made it clear that it will engage in the ‘high-graphics’ projector race. Secondly, being a much larger company, Sony can afford to engage in a price war which BPS cannot. If not dealt with strategically, BPS could go out of business.
Sony’s objectives are to: (1) prove to the industry that it is more than capable of manufacturing high-performance projectors; (2) be a leader in the industry and (3) erode all competition. Sony already benefits from having a vast number of distributors and dealers worldwide so it will not be difficult to gain market share in the graphics projectors industry for the firm.
SWOT Analysis
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Case Issue
The underlying reason why Barco Projection Systems is now facing this imminent threat is because of marketing myopia. In simpler terms, BPS failed to take a step back and assess the broader direction and perspective of the industry. It underestimated its competition and continued to manufacture unnecessarily complex machines which were not user friendly. BPS also depended highly on Sony Components for the supply of materials and failed to outsource production of high quality tubes elsewhere.
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