Barco

In order to position itself against the threat posed by Sony's 1270 projector, Barco has to either lower the prices of their existing BG400 and/or BD600 projectors or develop new products to match or exceed sony's 1270 performance.

If Barco wants to reduce the price of BG400 and BD600 in response to sony's 1270, it needs to determine for each machine how much price to reduce , which market to have the lower prices in and over what timeframe it implements the price change. By Barco's estimate, if the BG400's price remained unchanged Barco could lose between 30%($3.85 million) and 60%($7.69 million) of the BG400's market share depending on how sony would price the 1270 (rumored to be between $15,000 and $20,000). In addition, at this lower price point, Barco is concerned that the 1270 would cause significant share erosion of the BD600, priced at $12,000.

Alternatively if Barco takes the product development route, it has three options. First, BPS can continue its planned schedule to introduce BD700 on time in October for immediate production and delivery. Second, BPS could leverage the advances made in the BD700 development to build the digital graphics projector BG700. Third option is to start the development of BG800 immediately. Unlike originally planned as this would be a digital upgrade of the BG400, BG800 would have to be designed to surpass 1270's performance. This would require a scanning frequency of at least 90 kHz and incorporation of sony 8" tube.

If Barco lowers the price of its projectors:

For: Barco would maintain the market share and would not lose to sony's 1270.

Against: Barco might not survive in the price war with sony. Also price drop might damage Barco's reputation among recent and repeat customers.

Product development: