Summary kicked off their business as a producer of

Summary
of Company Background

The following analysis
focuses on Barco Projection Systems (BPS),
which was the second-largest division within Barco N.V.. In 1934, Barco N.V.
kicked off their business as a producer of radio broadcast receivers. The
company had a rapid success and expansion during their early stage of business
by carrying out the television receiver technology based on their strong R&D
and product quality. Even though the global recession and oil supply shock
created a significant damage to their business at the end of 1970s, their
changes in focus on the niche markets brought them even greater success during
the recession.

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Barco Projection Systems (BPS), as a subsidiary of
Barco N.V., headquartered in Belgium and was introduced in the early 1980s for
their video projection technology. With the great market demands of video
projection, BPS experienced rapid growth and it represented 23% of Barco N.V.’s
turnover by 1988.

SWOT
Analysis

Strengths
·        
BPS used scan rate to segment its markets as their product
line strategy.
·        
Strong commitment to R (10% of turnover and 15% of
employees were dedicated to R).
·        
Expansion in international presence in sales, product
development and production.
·        
Fully-owned distributors represents 61% of BPS’s total
unit sales and revenues.
·        
Box dealers and system dealers.
·        
Barco provides its dealers sales and technical courses and
hired professional technicians.
·        
Dealers preferred selling Barco’s projectors since they
received higher price and higher percentage of the price.

Weaknesses
·        
BPS was unable to seek for other tube suppliers since all
other tubes were either inferior to Sony’s or more expensive.
·        
Graphics projectors were incompatible with any computer
scanning higher than 64kHz.
·        
Dealers complained the machines were unnecessarily complex
and not user-friendly.
·        
End users found BPS’s control panels and instructions too
complex.
·        
BPS responded by claiming the customers were disregarding
the instruction manual.
·        
Relying on Sony supplying the tube instead of focusing on
inventing their own.
·        
Decided to go against the new 8″ tube from Sony because
they are unwilling to redesigning the shape of the projector.

Opportunities
·        
Downgrade its technology to suit consumer, upgrade it
higher performance, or enter untested market.
·        
Upgrade of the application would keep competitors out of
the market and expand market share. (sales ratio reversed).
·        
Digitally controlled projectors.
·        
Evolution of projection products line for best possible
image, inputs flexibility, and user-friendliness.
·        
Predicted annual growth (graphics>data>video),
(Asia>Western Europe>U.S.).
·        
Pricing strategy and product development option against
Sony 1270.

Threats
·        
Unable to locate other suppliers other than Sony.
·        
Sony showed a more reliable reputations and lower price
among dealers.
·        
Sony invented a sharper focus and better-quality tube far
superior than BPS’s supplier.
·        
Electrohome had comparable distribution strength to BPS
with lower price.
·        
Sony 1270 had far better performance and lower price than
anything on the market.
·        
BPS projected to lose approximately 75% of its forecasted
profit.

Product Line Strategy

Strength

It is known that Barco N.V.’s vision is the commitment
in research and development, as well as expanding international presence and
productions. In 1981, Barco N.V. started to get involved in the projection
systems business when it was developing a video projector for the airplanes.
When BPS was formed as a division under Barco N.V., its great early success was
heavily based on two big factors.

Traditionally, BPS had a great strength on
electronics, which was the major component of the projectors. Given the proper
combination of tube and lens, they developed a better performance and quality
projectors among its competitors. However, what
made them stand out the most in the industry was the way they segmented the
market. BPS’s product line strategy was very smart that they used the scan rate
to segment the markets and identity potential customers based on their needs.
This created a huge positive impact to their business because they knew that
certain business would prefer certain projectors based on their business’s
needs. The three product lines that they had were – first, the video projectors that were designed
specifically for standard video sources with running at a 16kHz and cheaper
price. Second, the data projectors,
relatively more expensive than the video projectors, which were dedicated for
displaying input from personal computers and video sources that scanned at
16kHz to 45 kHz. Third, the graphics
projectors that scanned above 64 kHz which were designed for accepting
input from relatively more powerful computer-aided design and manufacturing
systems.

BPS segmented the market based on the end users’ need
with regard to the scan rate since they understood that more options would
bring them more potential customers. This product line strategy provided BPS a
bigger market share and better reputation.

BPS’s Vision against Sony

Weakness

One of the biggest issues that BPS had to face is the
fact that they relied on their competitors on supplying the most important
component for their projectors. Dejonghe had a false assumption that their
business partnership with Sony implied both organizations would help expanding
the market together. The biggest problem was that Sony had put so much
resources into developing newer and better tubes, while BPS was only focusing
on developing better projectors and totally disregarding the threat from Sony.

When
does one competitor accept another’s vision of the market?

When one competitor accepts another’s vision of the
market, it has something to do with their ability to gain more market share at
that moment. To put it simply, Sony was coping with BPS to supply the most
innovative and efficient tubes to BPS at that moment because Sony had yet to
discover a way to utilize the tube to invent better projectors. Instead of
fighting against BPS to come up with better projectors, knowing they had the
tubes technology advantages, Sony would rather supply the tubes to BPS and gain
profits from there, while developing its own projectors at the same time. Here,
the difference between BPS and Sony is that when Sony came up with the new 8″
tube, BPS engineers decided to go against the idea to redesign the shape of the
projectors even though the new tube.