Economics and Ethics of Barco Projection Systems - Case Study Example

?Rohtak Marketing 05th December Barco Projection Systems Introduction Barco Projection Systems had created a niche for itself by developing video projection system for industrial applications. The products were designed and manufactured mainly targeted for industrial use. However, it was also capable of connecting to TVs, VCRs and lately to the computers retrieving data and graphics and screening on the wall. Since the evolution of first projector, BPS has designed and launched various products which are the enhancement of previous versions. The BPS division entered into other market segments like data and graphic providing variety of choices to the companies with varying scan rate from the receiver. It is important to note that all the products i.e. three lines of products were built around 7” tube. BPS line of products, however, differentiated from other products on this basis of its performance, which was mainly measured across scan rate. The product line strategy BPS was to continuously develop its product range by research and development which resulted in other products with varied scan rate and price structure. It is however important to reiterate that every product which came out from the BPS division was superior version to the earlier product in terms of visibility, quality, clarity and scan rate. The strategy of Barco Projection Systems is further clarified by Frans Claerbout, General Manager, who remarked that “BPS product line was driven by three forces like the constant search of the best possible image, flexibility towards input and increasing user friendliness”. The strategy is evident from the exhibit given below which shows that since developing a video projection system in 1982, the company has continuously managed to develop its line of product through market creation and segmentation, improving the quality and performance along with cost price. BPS, since 1982, has developed five products in video segment, six in data segment and two in graphic segment thus gradually increasing its line of product justifying the remarks of Claerbout regarding the constant pursuit for best image and customer friendliness. Situation Analysis After the introduction of Sony’s 1270 projection system, Barco felt threatened as the product had everything to compete in the market of projectors. Though Sony’s 1270 shocked the industry, Dejonghe was not at all surprised because Barco already had presumed about such thing to happen but not in such a big way. Barco assumed that Sony would launch a product which will be a direct competitor for BD600 and therefore prepared themselves to launch their product, a 64 kHz digital machine. This led to a remark by Dejonghe who mentioned that “all of our projections, however, were based on the assumption that Sony would respect our “vision” of the marketplace’. In regard to this, it is clarified that Barco was purchasing 7” tubes from Sony which were used to build projection system as these tubes provided superior clarity than other products in the market. Dejonghe once came to known about Sony that their goal was to capture 50% supplier and consumer market but not to beat Barco in project. It was hitherto assumed that Sony respected the vision of Barco in the projection systems market. Competitors respect others vision in the marketplace so as to embrace new way of doing business which is necessary to get beyond the narrow framework of self interest and to realize the potential of marketplace transactions grounded in an intrinsic respect for all stakeholders (Peil, 527). In the words of Dejonghe, Sony was not interested in competing with Barco and other competitors in the market on small scale in graphic segment and therefore aimed to conquer the data and graphics market which was dominated by Barco. It was necessary for Sony to create an image for themselves instead of being a just another manufacturer of projectors. Therefore, 1270 was launched with intense marketing and publicity to garner attention and create a brand image. Recommendations Barco Projection System had developed a unique strategy of developing products for the purpose of industrial use. There were technical problems now and then as consumers were not able to fix the problems causing consumer dissatisfaction which Barco regarded as the consumers’ lack of interest in reading projector utility guidelines. However, a company like Barco competing at global level must keep itself aware of the market situation and constantly asses the marketplace by consumer and industrial analysis. So it can be said the Barco showed casual attitude in making assumptions and not preparing itself to challenge Sony’s product. It is revealed from the fact that since Barco purchased its tube from Sony, it was apparent that Sony wouldn’t sell its next version of tube to its competitor first rather than using it to produce a much better and competitive product. Barco has a bigger problem in relation to the price of its products because distributors from Germany and France are constantly pressurizing to reduce the unit price because of Sony’s low priced 1270 projection system which was yet to enter the market. Regarding pricing, Barco should compulsorily reduce the unit price cutting on its profit margin until it launches a product in response to Sony’s 1270. Barco should go ahead with its third option of manufacturing BG8000, a digital upgrade of BG400, which has the capability to overcome the threat of Sony’s 1270 in terms of performance. It is necessary for Barco to launch the product at Infocomm so as to avoid losses due to price reduction and market share. Though the chances are less, as contemplated by Claerbout, General Manager, the risk is worth taking considering the impact it will have on Barco’s range of product. Conclusion Barco Projection System needs to enhance its R&D structure so as to improve the efficiency of product and end user friendly. It is failure from the Barco’s perspective that they were unable to predict such threat from Sony which has created a necessity to change the strategy of production, price structure and marketability. Though, Barco is planning to create BG800, as a response to Sony’s 1270, extensive marketing is essential so that it stands out apart from other products in terms of quality, performance and marketability. Works Cited Peil, J. Handbook of Economics and Ethics., Edward Elgar Publishing, UK, 2009. Read More