Hbs Case Study: Barco vs Sony

As a designer and manufacturer of sophisticated projectors for industrial applications, Barco was among the top three worldwide players in the market for industrial projection. Barco’s traditional and dominating strength in electronics resulted in better resolution, image quality, brightness, and most importantly, higher scan rates for its projectors than peer companies. As such, Barco easily captured the largest percentage (55%) of the graphics projection marketplace, and was second to Sony in market share for data projection.

However, in August 1989 Barco’s position as the market leader in technology was threatened by Sony Corporation with the introduction of the Sony 1270. Although marketed as a ‘super-data’ projector, the 1270 high scan rates placed it in the graphics projection market; it superceded all of Barco’s line of projectors in each of the main areas of evaluation: scan rates, resolution, image quality, focus, brightness, etc; the 1270 was also expected to be priced 20% to 40% below the established market price in its performance class. Although Barco expected Sony to move into the graphic projector market, Barco was under the assumption that Sony would roll out its new models with gradual, instead of dramatic, scan rate innovations. As such, Barco was unprepared to launch a product that could outperform, or at the least, compete with the 1270. This lack of foresight on Barco’s part translated to a potential lose of up to 75% of its projected profit, and a very real possibility of being driven out the market completely. Barco now has to create a strategy that will allow at least one of its products to sufficiently compete with the Sony 1270, and to also ensure its future in the projection market.

Industrial users in the projection market determine their choice in projectors based on three layers: the first layer captures the projection image, the scan rate (the higher the range of the scan rate, the better), and reliability; the second...