Q1) How would you describe the product line strategy of Barco vis-a-vis Sony?
A product line strategy is a strategy to develop an upgraded product to enable the firm to control the largest possible market share. Barcos Product line strategy in the 1980s and early 1990s was one that concentrated on segmenting markets by scan rate and developing various products aimed at various industrial markets. Its first product was a video projector for showing movies on airplanes but this developed into more complicated computer compatible projectors and then to graphic projectors which can handle CAD/CAM input. There final development being into the digitally controlled projector market.
Sony’s’ product strategy is less aggressive than Barcos in that they only want to be 50% an industrial supplier and 50% a consumer supplier. It main concentration was in Video projectors and its strategy was to undercut Barco in price but this came with less superior quality also. Sony is not specialized in the projector market to the same extent that Barco is and so their Product line strategy is less intense than Barco and they are happy to not dominate the higher end market but to be suppliers to Barco instead. This was all until a surprise launch of a hugely superior product in August 1989 that overtook Barcos BG400 in quality and undercut it in price. Sony’s strategy had suddenly changed to one where they wanted to expand from being a mass producer of low-end products.
Q2) Did Barco make a mistake somewhere?
Yes, their major mistake was to assume that Sony would continue to respect their ‘vision’ of the market place. They fell into a false sense of security assuming it would not over take them in the market as they were suppliers to them also. Barco should have anticipated and prepared for a new Sony product that would outdo their BG400, especially when there was rumours’ circulating. They made the mistake of thinking...