Case Analysis: Barco Projection Systems

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Porter’s 5 forces

From supplier power aspect, Sony was one of the suppliers and a competitor, which put Sony in a convenient position. Sony could easily raise the price up or stop supplying BPS in order to eliminate BPS out of the market. On the other hand, from buyer power aspect, the price of BPS’s product was mostly above the average of the other companies’. Customers could buy the other brands if they were not looking for some special functions. For the competitive rivalry, although BPS had a very strong competitor, and they were selling homogeneous products, BPS could rely on the brand loyalty and high switching cost to keep the customers. Additionally, for video-only projectors, there were already several companies competing with each other. It was easy to enter as long as the company was selling electronic devices. However, for the graphic and data projectors, there were high barriers for entry.

Recommendations

Even though I think BPS was still the first and unique manufacturer in the market, the new model, the 1270, of Sony was going to make some serious damage on the BPS’s business. The goal of Sony was to take over the BPS’s first place in the projectors market, and the next step would be squeezing BPS out of the market. That could make Sony monopoly in the market, which could bring a huge profit to Sony that we could hardly imagine. BPS should never buy supplies from Sony in the first place, which was the bad decision that led BPS to this circumstance. The leaders of BPS were too naïve of thinking about that Sony would be happy being second in the market.

In spite of all the disadvantages I just mentioned, there were still some decisions I could make to save BPS. First, from the price plans, BPS could never lower the price to compete with Sony. It should maintain the high standard of the product line, which was to pursue the high quality of the image and become more user-friendly. BPS’s customers were buying quality product, not just about price and quantity. Second, from the product development plans, there were some solutions more feasible over here. Instead of producing BD700 and BG700 which had lower scan rate than the 1270, I thought BPS should take a leap and introduce the innovative BG800 which could perform better than the 1270. BPS didn’t need to rush into the final production of BG800. The function of 90 kHz scan rate and digital upgrade would speak for themselves. BPS could still rely on the customers who had brand-loyalty during the production of BG800. BPS might be losing money during this period due to the overtime fee of workers, new sources of supplies, and production fee etc. But, I thought it would be the best response to this serious threat of Sony.