Barco Case

Submitted by: Submitted by

Views: 307

Words: 698

Pages: 3

Category: Business and Industry

Date Submitted: 03/01/2013 02:56 PM

Report This Essay

1. Why is Sony launching the 1270?

Sony launched the 1270 in August 1989 because they were able to come up with the technology that supported the needs of the product (more than 65Khz scan rate) with a reliable and low-price perception brand in the market, introducing a product into a niche market that projects a growth of 40% in the next 5 years.

The key factors for Sony to launch the 1270 were: their distribution network and the innovations achieved by their R&D unit. For Barco, their naïve perception of Sony as a threat even though was the only supplier of a key component, along with the lack of a good distribution network and a strong product that served the lower-price segment of the market, played in its disadvantage. All these factors gave Sony the financial and technological power to come up with a product that compromised Barco’s market share and the whole company’s existence.

Since the creation of the projector market, Sony positioned their brand as reliable at a low price. With this, Sony was able to control half of the market share in video and data projectors. Both products oriented for mass consumption market generated gains from volume, which were essential to have profitable operations from the dealers’ perspective.

Sony commercialized their projectors through its worldwide commercial video distributors that have more than 1500 dealers. A distribution network that surpassed their competitors and generated Sony the funds required to invest in new R&D, the key factor that supported the 1270 projector design. Before its introduction to the market, Sony did not have any competing products for the graphic projector market as its competitors (Barco and Electrohome) did. Even though in previous years Sony had acquired a competitive advantage over Barco when Sony became Barco’s only supplier for the tubes used in their projectors, Sony gained the knowledge of Barco’s production plan.

It is was not a coincidence that Sony decided to launch...