Describe the Product Line Strategy of the Barco Projection Systems Division

1. Describe the product line strategy of the Barco Projection Systems Division.

Barco N.V. has started out as a company that produced radio receivers in 1934 and television

receivers in 1948; however, during the 1980s, after surviving from the global economic

recession, the company decided just to focus on a niche market, shifting the company from being

product-oriented to market-oriented, and charge a premium price. BPS was created since then

under Dejonghe’s, Claerbout’s, and Dursin’s leadership.

BPS’ first projector, called BarcoVision1 (BV1), was high in sale volume worldwide despite its

low scan rate. With the desire to expand the projection markets in the future, Dejonghe,

Claerbout, and Dursin mapped out 3 strategies: (1) downgrading or (2) upgrading its projector, or

(3) developing a brand-new computer-compatible projector. During the progress of enhancing a

new computer projector, they realized that in order to be compatible with the most upgraded

technology, “scan rate” had to be increased and projector had to be flexible with each model of

computers. As a result, BPS decided to use scan rate as its market segmentation strategy, which

made the business stand out. The company divided their projectors into 3 categories based on

their compatible scanning frequencies, which are 16kHz for video projectors, 16 to 45 kHz for

data projectors and 16 to approximately 64kHz for graphics projectors – BPS’ latest model at the

time, and decided to keep them at those rates.

2. On p. 12 of the Barco case, Dejonghe comments that “All of our projections, however, were

based on the assumption that Sony would respect our ‘vision’ of the marketplace.” What does

this mean? When does one competitor accept another’s “vision” of the market?

At the time introducing the 1270 and announcing the model’s price and performance, Sony had

amazed the whole industry especially, BPS. BPS was not shocked by the introduction because

they forecasted it months ago. They expected that Sony’s new model would not directly compete

with them in the graphics projector business so they mapped out all possible solutions in

response with Sony’s new product; however, Sony was making neither a medium-speed scan rate

projectors with low price nor a high-speed scan rate projectors with a high price. What surprised

them was that Sony kept their low-priced strategy while producing the highest quality projector.

BPS’ vision of the market was that the company would lead the projector market by providing

innovated and high-quality products and they believed that Sony has always accepted their vision

as Sony explicitly stated that they would not aggressively compete with BPS.

A competitor accepts another’s vision of the market when they are indirect competitors, in which

they are not targeting the same market segment but satisfy the same market needs. Another

reason is both competitors benefit the other, such as being a production supplier of the other. If

maintaining this relationship is beneficial for both, they will continue respecting the other’s

market perspectives.

3. Why did Sony decide to reject BPS’s vision of the market in August 1989?

Sony