Option Three (Development of BG 800).
(a)Barco’s business model is based on differentiation strategy, which in turns caters for a particular niche segment of the projection system market. BPS is thus able to charge a premium price for its products. In order to be competitive BPS cannot play the price war game with Sony, which has much wider presence in the electronics market. In addition, price war will erode the complete market. BPS can only sustain the differentiation game by bringing on new and better products. SWOT Analysis (BARCO Projection System)|
Strength| Weakness| Opportunities| Threat|
1. Higher market share in data and graphics market. 2. Good R&D platform as compared to its competitors.| 1. Dependant on Sony Components for tubes.2. No vertical integration in terms of product development.| 1. Can be a market leader by bringing in new products.2. Projected 40% growth for graphics segment.| 1. Threat of competitors which can bring improved products.2. Sony component can stop selling tubes to BPS.|
| Option 1 (BD 700)| Option 2 (BG 700)| Option 3 (BG 800)| Advantages| 1. In tune with BPS planned launch.2. Preserve current customers.| 1. Gives BPS a better launch (Doing something approach)2. Gives sufficient time to plan new R&D for better product.| 1. Takes the fight to Sony by launching a better product than Sony 1270.2. Preserve market share and reputation.| Disadvantages| 1. Threat of losing 75% market share. 2. Threat of losing current customers.| 1. Half hearted effort to take up the challenge.2. Product still inferior to Sony 1270.| 1. May not be able to launch product well in time.2. Product may be inferior in quality due to time constraint.| (b) Based on the SWOT analysis, it is critical that BPS should react to the new threat imposed by Sony by introducing a new product which is significantly different and better from that of Sony otherwise there is a...