Barco’s Competitive Advantages

Barco’s Competitive Advantages:

- Technological Advantage: Barco has always been the product leader in its chosen target segments. In the niche product division of Data and Graphics projectors, Barco always had the highest product specifications vis-à-vis its competitors.

- Product Portfolio: Within the premium projector market, Barco has placed differentiated products to suit customer needs. The BD600 is designed and priced for the Data segment, whereas the BG400 has superior specifications for graphics segment.

- Brand Image: For the customers, Barco has been able to create a brand image in the market for its superior technology and service. For the distribution channel Barco offers higher margins on sales, and provided price protection for unsold units and price protection during the duration of the sale.

Case Analysis:

Option 1: Continue Development on BD700 (No change from original Plan)

Advantages:

- The Barco research team has already completed the development of the product and could be launched for Infocomm.

- Meets customer demands in Germany on time.

- No change in current Research and Development plans.

Disadvantages:

- Lose out on all three competitive advantages – Sony will have a superior product at a much lower price (Exhibit 1). The 1270 can target both the target segments Data and Graphics with one variation of the product, and with a big launch in Infocomm, it stands to gain a huge part of Barco’s market.

Due to the loss of a differentiation factor, Barco stands to lose out on short term and long term sales if it chooses this option.

Option 2: Launch BG700 based on R&D of BD700

Advantages:

- The BG700 can match Sony 1270’s scanning Frequency.

Disadvantages:

- Lose out on all three competitive advantages – BG700 will be an overall lower product due to inferior output and quality of image. Sony will still have a superior product at a much lower price (Exhibit 1), diminishing Barco’s brand image and sales across all segments.

- Delayed fulfilment of BD700 pre-orders in Germany, thereby tarnishing relations with customers.

By going after just one specification, the scanning frequency, Barco stands to lose out in the big picture. With an inferior product, and little consideration of a superior product, it will give away sales and market share to Sony.

Option 3: Develop BG800

Advantages:

- Maintain Barco’s Competitive advantages:

o BG800 will be a superior product to Sony’s 1270 and Barco will maintain technological supremacy in the niche market.

o Barco brand will continue to hold value in the market as a product leader.

o Barco can price BG800 above Sony 1270, thereby negating the price factors.

Disadvantages:

- Compatibility