Barco Products Case Study

ompetition

*****Barco has several competitors but its main competitor is Sony. For market strategy, Barco targets niche markets for specific customers while Sony targets the general audience in mass market. Reputation amongst dealers also vary between Barco and Sony. Barco’s products are viewed as high-end quality products. The only disadvantage is that installation process is difficult but once installation is finished, quality seems to be much better. Sony’s products are lower ends in terms of price and quality but they are reliable at the same time. Barco has selective distribution with 100 dealers in US market while Sony has intensive distribution with about 500 dealers. Barco and Sony differ in many ways and the fact that Barco believed that Sony would follow the same production path was unintelligent. Barco was naive to strongly trust Sony to respect their vision of the marketplace.

) So now we are going to talk about Porter’s 5 forces.

*Our major competitors in the data and graphics segments are Sony, Electrohome, and NEC. Barco was a minor competitor in the video segment but their major competitors were Sony and NEC. When looking at Sony before 1985, Sony sold similar video and data projectors to Barco’s that lower in quality in terms of resolution, brightness, image quality and scan rate. However, their products were offered at cheaper prices. Between 1985 and 1989, Sony’s products remained similar to Barco’s but they had higher quality in terms of resolution, brightness, and image quality but fell short on scan rate. By 1989, Sony 1270 was better product than Barco’s in terms of scan rate, resolution, brightness, and image quality

Futhermore, Sony sold their products to about 1500 dealers versus Barco’s distribution of about 400 dealers worldwide. However, Sony’s products were sold at larger volumes and at lower prices but they did not give their dealers much of the profits. Therefore, dealers preferred pushing Barco’s products for sale. Also, Sony also has the reputation of being reliable and cheap. Overall, Sony has a strong ability to compete with Barco. When looking at Electrohome, they also sold data and graphic projectors that were similar in quality to Barco’s but slightly cheaper. They sold products to the same number of dealers, at similar volumes levels but at slightly lower prices. Electrohome also has a reputation similar to ours. Overall, they also have a strong ability to compete with Barco.

NEC sold video and data projectors like Sony but they had an inefficient distribution network by only selling to two dealers. However, they pioneered the technology for projectors. Therefore, NEC has an adequate ability to compete with Barco.

In all, the completion in the projector system industry is very strong. *Now we will look at the potential of new entrants into the projector industry. It is very expensive and time-consuming to enter the fast-paced technology market due to R&D and production costs. Barco also has an advantage in the industry because they have experience and connections to many suppliers and dealers. Overall, the potential of new entrants into the industry are low.

*When looking at supplier power, Sony is the only supplier for Barco’s lens after 1985. It is not very easy for Sony to drive up prices because other suppliers offered lenses at high-quality as well, however, those suppliers were more expensive. There is a high cost of switching from one supplier to another because it takes a lot of time to arrange for a new supplier in terms of contracts. Moreover, another Sony division, Electrohome, and Barco source from the same supplier; therefore, there is a possibility for a supply shortage. Furthermore, Sony is a competitor; therefore, Barco is relying too much on the competitor for supply and Barco has had to share some of its product development plans to Sony because they are our supplier. Lastly, Barco may need to supply from Fujinon but they are already a supplier to Sony so it is unlikely that Fujinon can supply to Barco. Overall, supplier power is high.

*When analyzing the power of the customer, before the launch of Sony 1270, Barco had lots of buyers like dealers and industrial consumers; therefore, they were not able to drive down prices. Furthermore, customers faced low switching costs because there are other competitors with similar high-quality products. Each customer that Barco had