Critical Thinking

Case and is not as user friendly as

Case Type:
Decision Based

BPS is a decision base case because it has many different options it
could deal with its competitors who offer more superior and cost friendly
products then BPS.

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SWOT Analysis:
Barco Projection Systems

 

Strengths:

 

·      Barco
Projections Systems has many strengths, one of them is being part of the top
market leaders in the projector industry.

·       Another major strength of BPS is their ability
to manufacture high quality projectors in niche based markets, this still
allows BPS to maintain high quality projectors.

·      BPS is extremely
dedicated to Research and Development. BPS use about 15% of their total
employees and 8-10% of their annual turnover, just to perfect their R&D
system. This just shows the dedication to always keep improving their products.

·      It is the
leading manufacturer of projectors.

 

Weakness:

 

·      The biggest
weakness of BPS is they get their supplies from Sony Components, which is a
subsidiary of Sony. This means that they are heavily relying on direct competitor
to get the supplies to build their products.  

·      Another
weakness you can find is that BPS price scheme is much higher than their
competitors. This means that BPS is losing out on customers just because of their
overpriced products.

·      BPS is very
complex and is not as user friendly as its competitors are.

 

Opportunities:

 

·     
There is not many opportunities for BPS, due to the fact they have
already achieved all their opportunities to expand beyond of what they
currently have.

·     
One major opportunity BPS has is to really go after the graphics sector
that is basically untouched by any competitor. This could help BPS because they
are losing business in the projectors because of the Sony 1270.

 

Threat:

 

·     
The biggest threat to BPS is Sony. Because Sony is set to drop the Sony
1270 which will negatively impact BPS. The market will be impacted for BPS and
the revenue projections for the BG400 will not be good ether. Sony is the biggest
threat and BPS needs to start acting to help itself.

·     
BPS will be impacted on the market share just because of the fact the
Sony 1270 is cheaper and better than the BG400.

·     
Also Barco is heavily reliant on the consumer itself, if their products
become irrelevant to the consumer it can heavily impact the future of Barco.  

 

 

Porters 5 Forces

 

Suppliers
Bargaining Power:

·      The Suppliers have Very
High bargaining power. If a suppliers are able to sell products that no
one has it right away has the power to control the prices.

·      This specific market has a small amount of big players. This is
the reason why the suppliers have very high bargaining power. .

 

Buyers
Bargaining Power:

·      The buyers in this market have Low-medium bargaining power. In this specific market, buyers
are extremely limited to where to buy there materials.

·     
The buyers rely
heavily on the suppliers in order to keep up with demand that they are facing
from the market, this ends up putting them in very tough spot.

 

Threat-of-Substitute:

·      There is a very Low
threat of a substitute. In this specific market there are not many
small players that will really affect the big players.

·      If anyone wanted to copy the product of its competitor, it
could only be the big players in the industry.

 

Threat of New
entrants:

·      The threat of new entrants is Extremely Low. The reason why you won’t be expecting any new
entrants is because of the extremely high startup costs. It would take a lot of
money and time to even begin to challenge the big players.

·      There is not a lot or even enough space for new entrants.

 

Industry
Rivalry:

·     
The industry rivalry
is Extremely High. The reason
why the rivalry is so high is due to the fact that everyone is trying to outperform
and do better than there competitor.  

 

 

 

 

 

 

 

 

 

 

 

 

 

Product
Line Strategy

 

The product line strategy of Barco Projection
Systems is pretty simple and it is to be in the industry of graphics and
projectors where they sell their products based on the scan rate and the price.
All of this started in 1981, when they became the first one in the industry to
display a motion picture on an aircraft. Barco has always targeted niche
markets to get its business started and it has helped them grow into bigger business.
BPS when it started to grow into the market leader, it started to increase the
quality and it shift its focused into bigger markets.

 

 

Why
did Sony decide to reject BPS’s vision of the market in August 1989?

 

Sony
decided to reject BPS’s vision of the market, because it felt to them that they
and the industry where being held back of their goals by a bar set by Barco
Projections Systems. The BG400 was the biggest and best product available on
the market, BPS didn’t feel it was necessary to waste money and time to put
another product better than this one on the market. It had been a total of two
years since the release of the BG400 (1987-1989), SONY came out with a bang in
1989 with its Sony 1270, consumers everywhere lining up for this product and it
was great success for Sony. This is the reason why Sony rejected BPS’s vison
and decided to create their own vision of what the market should be.

 

How
serious a threat is the Sony 1270? What are Sony’s
objectives?

 

The Sony 1270 is a serious threat to Barco
Projections Systems and its BG400. The reason why this is a big threat is because
it’s in direct competition with BPS projector. If you compare the two
projectors, the Sony 1270 is better in all aspects compared to the BG400. The resolution,
image quality and brightness. Also if we focus in on the price, Sony is making
the Sony 1270 about 20-40% cheaper than the BG400. This will create a big
threat to BPS, because now they will not be the only one offering the best a
premium price. They will have to adapt and try to compete with Sony’s new high-tech
and quality projector. Sony’s objectives where pretty clear and straight forward,
they wanted to create a product that would offer great quality and high-tech
features and low and efficient cost. They achieved they’re objective and are
now challenging BPS market share, also they are going to generate much more
revenue to help them continue developing and launching these type of products.

 

Did
BPS make a mistake somewhere along the way? Or do things like this “just
happen” when competing in high technology businesses on a global scale?

 

Barco Projection Systems did make mistakes along the
way, because they were too naïve and thought that there competition would not
progress to the level they are at currently. The release of the BG400 from 1987
to 1989, BPS made the decision to stop innovating and putting out another
product that was going to be better than the BG400. It turns out that was a
huge mistake because other competitors such as Sony, released the Sony 1270
that was better in quality and price compared to the BG400. BPS didn’t project
for this type of competition from their competitors, this is a sign of a
company that wasn’t doing good business, BPS should have always been analyzing the
market to make sure they are up to date on its competition and are improving their
product line. Things like this just don’t happen it is a build up from
past behavior or choices that come back to cost you in the future. The decision
not to continue to develop another product, when BPS believes highly in
spending in the R department, cost them dearly when the Sony 1270 came
out. Consumers spent big on it and it really helped Sony generate tons of
revenue.

 

What should Barco do now with
respect to price?

 

When
it comes to pricing, Barco Projection Systems need to be calm and decisive
towards the pricing of their products. If BPS suddenly decides to drop prices,
it will hurt their bottom line and can damage company and brand image. BPS is known
for their high quality producer of projectors, if it lowers the prices it loses
that image of offering quality products at a premium price. The Sony 1270 has
helped Sony gain a significant amount of market share because of its price, if
BPS keeps the pricing of their products the same it will not be selling many
BG400’s. The reason being that Sony is making their price 20-40% lower than
BPS, this creates a big dilemma. To resolve this dilemma BPS should lower their
prices just a tiny bit, just so they can competitive with the Sony 1270 and
also ramp up the R&D to come out with a product that is better than the
Sony 1270.

 

What should Barco do now with
respect to its product development plans?

 

What
Barco should do now is to really invest all its time and money into the BG800
so it could beat Sony in the Infocomm in January 1990. This specific product
will help them regain the market share they lost to Sony after the release of
the Sony 1270. It is vital that they are able to pull this specific product
off, because if they put out a low-quality product it will harm their brand. Also
if it doesn’t make the deadline, BPS should focus on the lowering the price and
making the most amount of money through that way.

 

 

 

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