Barco Projection Systems - 1
1. Describe the product line strategy of the Barco Projection Systems Division?
BPS has followed a market segment based product line. BPS differentiated these segments based on the scan rate of the projectors. Video segment projectors had scan rates of 16 kHz, data projectors had scan rates ranging from 16 to 45 kHz and graphics projectors at the higher end had rates from 16 to above 64 kHz. BPS was the leader in the graphics projection segment which was a niche market.
Historically, Barco entered the projections market with the lower-end scan rates for video applications and has been adding depth to its product line by improving the scan rates. Thus, subsequently BPS created data …show more content…
Sony’s release of the 1270 is not an incidental event. BPS’s failure to continuously innovate and update the technology of their projectors made them lose their technology leadership position to Sony. Following Sony’s tube technology was a direct conflict with BPS’s belief that Sony will accept their vision of the market. As a result, BPS did not foresee that Sony could be ahead of their own projections in terms of the scan rates and prices in the graphics projector segment. BPS also failed to realize that niche markets are always prone to be commoditized eventually. 6. What should Barco do with respect to Price?
Since there is only market speculation on the Sony 1270’s price, Barco should wait for Sony to announce the actual price of the 1270. At two different pricing levels ($20,000 and $15,000) of Sony 1270, various pricing levels of BG400, the associated revenue loss (assumed % for the reduced prices) and the margins are calculated below. Scenario 1: Sony 1270 Priced at $20,000 | | | | | BG400 Pricing | Price per unit $ | Marigins % | Cost per unit $ | Est. Revenue Loss | Estimated Revenues $Millions | Total Marigins $Millions | No Reduction | 24,000 | 29%