Barco Projection Systems (A)- Worldwide Niche Marketing Case Solution

2. Problem Identification

Barco Projection Systems is currently the market leader in one of its three product offerings- the graphics projectors. Although the graphics projectors are the lowest in the number of units sold, they are the most sophisticated and the highest priced. The problem that BPS currently faces is that its competitor, Sony, who is currently the market leader in data projectors, have come up with a graphics projector which beats all presently available scan rates, a factor crucial for the performance of graphics projectors. Moreover, the Sony projector model 1270 is said to be priced less than the highest performing model of Barco. Therefore, it can be anticipated that Sony could be soon taking over the market in many countries of Europe and the United States.

3. Strategic Alternative 1

An alternative for Barco Projection Systems is to play on prices. It can choose to lower the price of its existing model in the graphics range, which is BG400. With its current price of US$ 24,000 and a maximum possible scan rate of 72 kHz, the BG400 stands to compete against the Sony “superdata” 1270 model with the following specifications: scanning power of 75 kHz, the new 8” Sony tube, and rumored to be priced between $15,000 to $20,000.

Hence, a clear alternative for BPS is to cut down the price of its BG400 model. The advantage that the current model has is that it is already a well-established product, especially in Germany. To prevent the erosion of German market by Sony’s new 1270 model, expected to be launched in a few months’ time, the price tag of BG400 must be slashed. This can mean that Barco should charge a price of around $18,000 to $24,000 to remain competitive in the market for highly sophisticated graphics projection. Moreover, Barco’s leading product in data projectors, BD600 priced $12,000 is also expected to face competition with a $15000- $20,000 1270 model as the market for data projectors shall get a higher scan rate with a reasonable price difference. The price of BD600 should be brought down to $10,000.  

4. Strategic Alternative 2

The second alternative is to develop a product that can compete with Sony’s 1270 graphics projector without having to be priced above $20,000 which would leave BPS uncompetitive in the race in Europe and the United States. BPS is well on its way to launch the BD700 in the month of October, which will be the division’s first digital model. However, the main challenge for BPS currently is to make sure that the market in which it is currently a leader, graphics projectors, is not eroded by Sony.