Barco Projection Systems a

What exactly is Sony trying to accomplish with its 1270 “Superdata” projector?

Barco is being threatened by one of its main competitors, Sony, which is entering into Barco’s core market segment (Graphics projectors) with a product that might be cheaper, technologically superior and might address also the needs of Data projectors’ customers.

Firstly, Barco is now operating in the two segments with the highest margins and growth-rates (Table 1), and Sony is planning to release a high-quality product that can tackle both these segments. However, Sony is also entering into a segment in which Barco has acquired strong brand equity, and in which only Electrohome has a comparable market share.

Secondly, Barco is geographically threatened from two angles. In Europe and North America, Sony has a remarkable market share in the Data segment, as its distribution network is more effective and can be used to roll-out the 1270 Projector. Also, Electrohome is a threat in the Graphics business. In the fastest growing market (Table 2), the Far East, Barco has a relatively small market share of 15%, letting Sony, Nec and Electrohome to take the lead.

Thirdly, Barco’s business model has some weaknesses that must be taken into account. The company seems to be focused on product features, whereas Sony tackles also other customer needs – service, ease of use. Hence, Sony has a competitive edge as it sells easy-to-use products through a wider network. Also, Sony is the main supplier of some Barco’s critical components, and can therefore undermine Barco’s R&D effectiveness in the future. However, Barco’s higher margins may attract new dealers as they are experiencing shrinking margins.

At last, Barco has managed to increase its brand equity and the company is considered as the leading player in its segment, which should guarantee customer loyalty. Hence, Barco has all the capabilities both to minimize the impact of Sony’s products and Electrohome’s presence, while reshaping its...