Barco NV Analysis: SWOT, Position and Product Life Cycle

Barco NV is one of the top three global manufacturer, focused on expensive, high-quality products in a niche market. It focuses on the graphic projector, projector market has the greatest growth and income.

Barco’s market share of 4%, a video projector, 23% and 55% of the data projector graphics projector.

Barco’s main competitors, Sony, Electrohome and NEC.

In my opinion, scrap the BD700 and star new “high-end” projector is the smarter choice. His strongest competitor, Sony develops a new product 1270 “super data” projector and trade show in the Boston. It is a high-performance graphics applications and low price. From the Table A Product Segment Growth, 1988, we can find that Graphics predicted annual growth, 1989-1994 were 40.2% from 1988 4% units. Data only grows 12.3% from 1988 33% units. Its mean graphics’ market growth is more than Data’s market growth. The BD700 is BarcoData700. Data’s market is growing slowly. That means new product BD700 is fail product and fail in the market. That’s why I agree scrap the BD700. I will show more analyze in my product life cycle. And BG400 (BarcoGraphics400) is old model. If 1270 go in the market, BG400 will be kick-off from the market, because BG400 is the high price and low benefit product when 1270 come in. To star new “high-end” projector it is the smarter choice. Barco can develop new-product like as BG800 or upgrading BG700. In the Niche marketing, Barco need to keep pursuing top of the line in the “high-end” niche market and declining the prices, and Barco can win back the competitive edgy.

Mission Statement

High quality, high technology, popular, and five stars customers’ service, are all in ours’ product.

Three levels of product

Projector is popular in the world, especially graphics projector. Projector is used in the class by the professors and very important in multimedia instruction. That’s the core customer value. Its customers’ needs. And in these customers, when they chose the projectors they are care about the brand name, features, quality level, packaging, and design, its customer’s wants, these are actual product. And most customers are actually care about the band name, features, quality level, packaging, and design, and these are actual product. The features are the points Barco’s new “high-end” projector’s positioning, and also it is customer wants. In the Actual product, I will focus on the features, Barco’s BG800 projector is new scanning frequency and new tubes than the 1270 “the BG800 with at least 90kHz of scanning frequency and new tubes” (p 249). Barco is famous brand name in the worldwide. Sony, it is not a profession projector brand. Customers will choose the professional brand-Barco. However, in the augmented product, customers want a good after-sale service and product support. In that part, Sony has good after-sale service and product support. That also is a good point for Barco’s customer future cost, and collect customers information for the new-products. Also, it will become the point that customers care about when they chose the company. Barco need to improve that part, because that’s customer wants. And its customer future cost, and researcher can collect customer information and wants from the new-products in the test marketing.

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Barco and Sony’s strengths and weaknesses. First, Barco’s products have a better scan speed is higher than the Sony. Barco dealer for 20% of the box distributors and 80% of the dealers and the dealer of Sony were 50%, tank dealers, and 50% of the system dealer. And we clearly can see customer needs and wants of three levels of product. Positioning is important part of customer wants.

Positioning

New “high-end” products are very important for Barco, it’s positioning on the high-performance graphics applications and middle high price like as BG800. Because Barco’s strong competitor, Sony’s 1270 is high-performance graphics applications and low price. Keeping high technology, appropriate price cut, and doing market research are the good way for the new-products. The BG800 in type of consumer product is classified the shopping products. Customer would like to compare these product, features, design, brand name, quality level, and packaging. The BG800 is the one Barco develop and position for the “high-end” products.

Product life cycle

In the product life cycle, BD700 are almost developed. But BD700 is the fail product like what I said in the beginning. But Barco already paid for the BD700 development fee and that was the sink cost. And Barco cannot take this money back. In the product life cycle, if BD700 is the right product, it can run like the curve, keeping to spent money for introduction. But the problem is BD700 is the fail product, it’s wrong product. In the development, it’s the sink cost. Sony is in the product development area, and they can stop and decline the loss, but Barco. Right now Sony’s product 1270 is passed the product development area and they will keep to following the product life cycle curve, introduction, growth, maturity, and Decline. The profits will between the end of introduction and the end of decline. Barco can start to develop BG800 and also follow the curve, because BG800 is the right product right now.

Possible Value Propositions

From the upper, we can find that BG400 is in the more prices and more benefits area. But when 1270 are come in the market. BG400 will go down to the more prices and less benefits. And the 1270 will go to the less prices and more benefits area. It’s very bad for BG400. Because no one want to buy a expensive and less benefits product. Barco will lose that market. From the positioning, BG800 will go in to the more prices and more benefits area. That’s good to fight with 1270 in the market. Customers really need the less prices and more benefits product, but some customers want more of the product, like they want and compare different brand name, features, and after-sale service. So they will choose BG800.

The New-Product Development Process

In the idea generation, Barco has many ideas. I will talk about three ideas from Barco; finish the BD700, scrap the BD700 and start new “high-end” projector, and improve BD700. In the idea screening, I suggest Barco scrap the BD700 and start new “high-end “projector. If that idea is passed, Barco will continue the next part-concept development and testing. BG800 is show up in the concept development and testing of the new-product development process. And then, Barco can do the marketing strategy development and business analysis. In the marketing strategy development, Barco can follow the Niche market to find what they fit. Following the Niche marketing, Barco can position the BG800 to the high-performance graphics applications and middle high price. So their marketing strategy will fit at high-performance and high price or middle high price. In the Business analysis, Barco need to do more market research and collect more information from the customers, price, needs, and wants. The third step will go in to the product development like as the graph of product life cycle, beginning the product development and products’ introduction, growth, maturity, and decline. The test marketing is beginning on the products’ growth. That means in the test marketing, it is beginning on the products’ growth and test the new product whether or not fit in the market growth and market share. And the last part, it will star the commercialization.

SWOT

Analyzing the Barco’s superiority from the case, it’s show that Barco has two big markets: the United States and Western Europe. From the Table B Geographic Segment Growth, Barco has 50% units in the United States and 36% units in the Western Europe 1988 and the predicted annual growth of each are 9% and 11.5% from 1989 to 1994. And the weakness part is the relationship with dealer. Barco hasn’t the system dealer who know-how of integrate and install equipment packages. From the Table D BPS’s Pricing Index, BPS has 41% direct cost and 59% gross margin, and this is the high margin. Existing dealers liked to sell BPS’s products. But BPS’s product is complexity. “In 1989, few dealers could survive without the Sony volume; an estimated 80% to 90% of professional audiovisual dealers worldwide Sony products because of reliability and low price among dealers” (p. 244). Sony has a lot of dealers and good for his product selling. The opportunity of Barco’s products are high technology and famous brand in the worldwide of projectors. Barco can develop “high-end” product BG800 or upgrading BG700. The threat is Barco need to scrap BD700 production. It means they lose a lot of money and need more time for the new “high-end” product development. And they will lose a lot of market share from their competitors. If the BG800 are not fit in the market, Barco will lose and never come back.

Line stretching and Line filling

Barco need to fill in the gap of Sony. Keeping the high quality and dropping the price, it’s the good way to fill the line of product line decisions. Right now Barco is in the high quality and high prices. And Sony is in the low prices and low quality. Sony keeps the low price and develops high quality product, 1270. If Barco develops BD700, the low price and low quality, will lose the market. If Barco scarp the BD700 and develops the “high-end” product BG800, it would be keep their high quality. Barco haven’t low price product, so he has no line filling. Barco have high price and high quality product. Barco will have line filling when he drop the price and keep high quality. Finding the gap of Sony is the good way to win the battle.

Summary

Surviving in the competitive market is not easy. To scrap BD700 and start a new “high-end” product, BG800, is the smarter choice. From the analysis, Barco need to find their new product whether or not fit in the market. Finding the customers’ needs and wants, it’s very important. Barco need to redefine its target market from collecting customers’ feedback and competitors’ strategic. To position new-product, it’s still important for Barco’s line filling. Positioning also use to the Possible Value Propositions, to find where the area is and where is the competitors. Understanding the product life cycle is good for losing money and scraping the fail products. The right product will follow the product life cycle curves. Understanding the SWOT, Barco has two big markets: the United States and Western Europe. the weakness part is the relationship with dealer. The opportunity of Barco’s products are high technology and famous brand in the worldwide of projectors. Barco can develop “high-end” product BG800 or upgrading BG700. The threat is Barco need to scrap BD700 production. In the line stretching and line filling part, Barco need to find his line, high prices and high quality, dropping the prices and keeping high quality are go way to filling the line of product line decisions.