Barco N.V. was established in 1934 as a producer of radio broadcast receivers. At the end of 1970's, facing the economic recession owing to oil supply shock, the company altered its market strategy from consumer market to industrial niche market of projectors. This decision was based on firm and clear vision that Barco knew which market it had to serve. Pursuing top-of-the-line in the high-end niche market, Barco focused on R&D to retain the top quality and launched series of international expansion activities. The strategy of the most advanced player in the niche market resulted in years of its market leadership in graphic projector sector of high-end industrial market. Barco Projection System (BPS) virtually enjoyed the fruit of its dedication on technologically superior projectors, however, the projector market encountered an unexpected (in light of BPS) new product 1270 "superdata" projector (1270) from Sony. Introduced at Siggraph trade show in 3rd quarter of 1989, 1270 showed its superiority in brightness, image quality, and resolution to the counter product of BPS. Since BPS couldn't expect a competing product like 1270, both the company and the distributor were shocked and stirred. Considering Barco's scale in the market, even though BPS was in the position of industry leader, it couldn't defend itself from the attack of the giant like Sony. At this point, to keep the market position and share BPS should take an immediate action against Sony's market conquering movement with the high-quality but low-priced projector 1270. At this time, the managers of Barco were considering basically two options: pricing option and product development option, but both options had some defects.
Strange relationship with the Giant
BPS was known its high quality to distributors and end users. Based on its strategy of being ranked in top 3 in the designated market segment ...