Barco Case Analysis

Name: Animesh Biyani (61710155)

Section: C

Barco had to choose from three product development options. Lets identify the pros and cons
of adopting each.
1. Continue with the same roadmap:
Barco would launch the BD700, its first digital model, by October. The sales of BD700 were
expected to increase 25% in 1990 around $4.3 million.
Pros:
Barcos products were considered highly complex, and hence not end user-friendly.
Introducing the digitally controlled BD700 (controlled by a hand-held remote) would
improve the perception of the company in this aspect.
If completed on time, the project would boost both the engineers and customers
morale.
Barco already had pre-orders from several German dealers, and not meeting these
orders would lower Barcos image among the dealers and distributors.
Cons:
BD700 could not beat the performance of Sonys 1270 at the Infocomm show, and this
would hurt Barcos reputation as the industry leader in producing the highest
performance projectors.
If Sony priced the 1270 at $15000, Barco would be forced to reduce the price of BD700
substantially (current price is $16000) as the performance of 1270 was far better on
every metric.
2. Launch the BG700:
Pursuing this option doesnt provide Barco any advantage. Even though Barco has 55% of
market share in the graphics segment, this segment accounts for only 23% of the
revenues.
Cons:
Opportunity cost of the foregone BD700 sales for 3 months (October December)
Hurts the dealer relationship; Barco had received pre-orders for its BD700 model, and
delaying it to December because of BG700 would not go well with the dealers.
No impact at Infocomm: Barcos intention is to create an impact at the upcoming
Infocomm by launching a new flagship device, but BG700 doesnt beat Sonys 1270 in
any of the metrics used to measure performance as the 1270 uses an 8 tube while
BG700 still uses the 7.
Therefore, this option can be ruled out straight away.
3. Launch the BG800 by shelving all current projects:
This was one of the most radical ideas thought of by Dejonghe stopping work on all
current projects and focus only on the completion of BG800.
Pros:
If the project is successful, Barco would regain its top spot in the projector industry.
BG800 could make up for any lost sales in its current data and graphics segment, and
most importantly the reputation of Barco would not be hurt.
Cons:
Hurt the engineers morale, who had been working overtime on the development of
BD700 and now have to continue the work on BG800 until Infocomm.
The compressed development time will have a negative impact on the quality of the
final product.
Opportunity cost of shelving all the current projects. Great progress had been made in
other projects, and shelving those will have an opportunity cost in terms of lost sales,
delay in time-to-market.

Barco Case Analysis

Name: Animesh Biyani (61710155)
Section: C
Claerbout estimated the probability of success of this approach to be only 40% (too low to
bet everything on this product). The data segment is most profitable for Barco, and BD700
would cement its position further in the data segment, even if it means giving up the
leadership in graphics segment for a short while. Hence this option can be ruled out too.
Conclusion:
Barco should continue with their current roadmap i.e. launch the BD700 by October. At the
same time it should stop any ongoing work on BG700 as that product will not add any
value to Barcos portfolio, and instead should start working on BG800 after BD700 is
launched.