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Barco

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Barco
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  PROTOGONISTErik Dejonghe, the iconoclast Senior Vice-President and chief operating officer of arco Projection s!ste"s #as in a $%andar! regarding a &efitting riposte to an o"ino%s prod%ct la%nch &%lletin &! a ri'al fir" Son!( PRO)E* +D EISION arcos consternation kne# no &o%nds #hen Son! anno%nced an i""inent la%nch of their ne# prod%ct, the ./01 projector series( The latest offering &! Son! pro"ised to &e "ore ad'anced, clai"ed s%perior, %nheard of perfor"ance and significant cost red%ction to the &%!ers( arco, #ho #ere ca%ght off-g%ard &! this pre-e"pti'e strike &! Son!, #ere light !ears a#a! fro" catching %p #ith Son! on this front, had to effect i""ediate changes in the #ake of a significant "arket share #asho%t and also to hold fort against their ri'als antics(OPTIONSIn order to co%nter the i"pending reperc%ssions of Son!s ne# prod%ct la%nch, it is i"perati'e that arco #eigh their options in ter"s of prod%ct and price "odifications( Pricing options 2 3Ind%ce a considera&le price red%ction its leading "odel 'i4-a-'i4 the G 511 3Pla! the #ait and #atch ga"e( Product options 2-o"plete the portending prod%ction of its pipeline project, the D 011( 6ltho%gh not at par #ith the ./01, it #o%ld certainl! pass off as a stat%tator! repl! to Son!s "o'e(-7ork on de'eloping their proposed "odel, the G 811( 6rg%a&l!, the &est option a'aila&le to arco, introd%cing this latest addition to their prod%ct line #o%ld effecti'el! negate the threat posed &! Son!( 6 &reakneck scan speed eclipsing that of Son!s ./01 &! far 9:1 kh4 co"pared to ./01s 0;< and nonpareil perfor"ance #o%ld strip Son! of the &enefits it seeks to gain #ith its fresh offering(  RITI6) EV6)=6TION HOW SONY MANAGED TO STUMP BARCO 3apitali4ed on arcos "!opic 'ie# that technolog! dri'es prod%cts( ! foc%ssing on the other aspects of "arketing strateg! like ha'ing an e>tensi'e distri&%tion channel and di'ersification of "arket seg"ents, Son! #as a&le to gra& a ch%nk of SO* and also generate eno%gh re'en%es #hich it co%ld %tili4e in de'eloping ne# prod%cts(3arco concentrated "ore on the pre"i%" high-end prod%cts and "eted o%t a &anal treat"ent to the s%&se$%ent le'els, #hich Son! #as enterprising eno%gh to po%nce on on and "ake a "ark( BARCO’S CHIE MISGI!ING  The core iss%e of the entire "elee at arco is essentiall! d%e to their inade$%ate anticipator! skills #ith regards to the sensing #here the "arket is headed and #hat the co"petitors are %p to( Despite &eing technolog!-dri'en, this #as alread! the third ti"e that arco engineers #ere ca%ght of g%ard &! Son! in the t%&e do"ain 9/<2? In .:8;, Son!s .1/1 projector, altho%gh slo#er than arcos projectors at the ti"e,had a sharper foc%s, indicating a &etter $%alit! t%&e(? In .:80, Son! introd%ced a 'ideo projector %sing a ne# t%&e( arco e'ent%all!incorporated this t%&e into its D@11 prod%ct(? In Ae&%rar! .:8:, Son! o"ponents contacted arco to infor" the" of a ne# 8B t%&e(arco engineers decided not to incorporate the t%&e into the D011 as it #o%ld re$%ire a redesign and so%rcing of a ne# lens( S%rprisingl! for PS, the 8B t%&e no# t%rns o%t to &e the ke! co"ponent responsi&le for the technical s%periorit! of the ./01(If arco #ants to "aintain a co"petiti'e edge, the! ha'e no choice &%t to contin%o%sl! adopt inno'ati'e technologies( Aailing to do so #ill res%lt in arco &eing a follo#er rather then a technolog! leader( BARCO’S P"AUSIB"E COURSE O ACTION 3 Effecting a price red%ction 6 predica"ent faced &! arco is ho# to respond to the price erosion that can &e e>pected &! the introd%ction of the Son! ./01( 7e delineate t#o opposite ends of the spectr%"2  1) The 1270 is launched with a price of $20,000   The "argin contri&%tion of the G511 is /:C, indicating that the cost to prod%ce is .0,151( These "argins do allo# for a certain, al&eit li"ited price red%ction( In case the price of the G511 is "aintained 9res%lting in an esti"ated "arket shareloss of 1C<, the total profit #ill still &e higher co"pared to a red%ction in price of theG 511 to /.,111 9Refer to anne>%re<(  2) The 1270 is launched with a price of $15,000 If the price of the G511 is "aintained, leading to an esti"ated "arket share loss of @1C, the total profit #ill still &e higher co"pared to a red%ction in price of the G 511 to .:811 9anne>%re<( O&'io%sl!, in case arco sells the G511 at a cost 9.0,151<, there #ill &e lo# profit( It is e'ident that arco in an! case #o%ld opti"ise profit &! "aintaining c%rrent price le'els of the G511, e'en taking into acco%nt that this co%ld red%ce "arket share &! %p to @1C(3 )INGER 6ND SIT TIGFT 6ltho%gh a potential &lock&%ster, the Son! ./01 is !et to &e la%nched and it is too earl! to predict ho# it perfor"s, ho# the cons%"ers react it and the acceptance it garners fro" the "arket( 6'oiding a knee-jerk reaction and deferring the decisions #o%ld ena&le arco to ha'e a clearer pict%re and "o%ld their strategies accordingl!( Fo#e'er, a gospel tr%th arco sho%ld reali4e is that it can ne'er co"pete #ith Son! on the price #ars front( arco has al#a!s &een a high-end, pre"i%" prod%ct co"pan! and Son! a lo#-end, di'ersified one( 6 red%ction in price #ill pro"pt Son! to red%ce their prices f%rther, erding the profits f%rther(D%e to econo"ies of scale, Son! le'erage to lo#er prices is greater than that of arco(3Introd%cing the prod%ct in the pipeline , the D 011 arco can either proceed #ith the la%nch of D 011 or can e'en stri'e to de'elop an ad'ance 'ersion of the D011, the G011, hoping that it #ill &e la%nched on ti"e to co"pete #ith Son!s ./01( *oreo'er there #ere ro&%st profita&ilit! forecasts of  5( "illion and orders had alread! started p%ring in for #hich co""it"ents too &een pro"ised( Fo#e'er, e'en if arco "angges to achie'e this feat, it #ill not !ield the desira&le res%lts since it cannot o%t perfor" Son! ./01 in ter"s of the perfor"ance(3Proceed to de'eloping the ad'anced "odel the G 811 ( I"ple"enting this "eas%re #o%ld entail a considera&le allocation of reso%rces and corporate assets( This #o%ld !ield se'eral &enefits to the co"pan!( esides taking o%t the threat of "arket annihilation, an  effecti'e la%nch #o%ld ce"ent the co"pan!s rep%tation of &eing ingen%o%s #hen it co"es to technolog!( 6 so%nd esta&lish"ent of the ne# prod%ct #ill also pro'ide a lee#a! for arco to di'ers! on the "arket seg"entation front, &! di'erting the other leading prod%cts to the non-pre"i%" seg"ent of the projectors "arket(Fo#e'er, esti"ates re'eal a &leak chance of this option &eing act%all! e'inced( The General *anager of PS, Arans laer&o%t hi"self accorded the de'elop"ent of this prod%ct a pro&a&ilit! of 51C( The co"pan! #o%ld &e stretched at all fronts if this prod%ct has to see the light of the da! in the gi'en ti"e li"it( *oreo'er, proceeding #ith this prod%ct #o%ld entail postponing the prod%ction of D 011, for #hich orders had &een taken and prod%ction process had &een initiated( 6 defer"ent #o%ld not a%g%r #ell for the co"pan! in ter"s of c%sto"er dissatisfaction and "arred rep%tation( PROPOSITIONS .(Relentlessl! p%rs%it the de'elop"ent and ti"el! la%nch of the ad'anced "odel G 811( This partic%lar "odel #as concei'ed as a f%t%re option, an a'en%e #hich arco #o%ld e>plore e'ent%all! in the co%rse of ti"e( Fo#e'er it no# has an incenti'e to prepone their plans and concentrate their efforts and reso%rces into reali4ing a si"%ltaneo%s la%nch of this prod%ct #ith Son!s ./01(/(Shift the co"pan! foc%s fro" &eing prod%ct-oriented to "arket-oriented( E'en a niche pla!er like arco has to "ake prod%ct de'elop"ent decisions &ased on "arket infor"ation(6 ke! factor for Son!s re"arka&le s%ccess is their foc%s on lo# end prod%cts, as opposed to arcos high end o&jecti'es( The latter sho%ld pa! attention to this "arket and concentrate on di'ersification and la%nch &rand proliferation( The! can "ake a &rand to foc%s on 'ol%"e and lo# price5(E>plore e"erging "arkets like 6sia( This region has #itnessed a tre"endo%s gro#th of .8C, #hich sho%ld sp%r &arco to e>tend their scope in these l%crati'e "arkets as #ell(;(6part fro" adhering to their catering prod%cts for niche "arket , it is i"perati'e that arco contin%e to de'ote co""it"ent to research and de'elop"ent to retain top $%alit! prod%cts and their "arket leadership( The! sho%ld %ndertake a contin%o%s  s!ste"atic sco%ting for ne# technological de'elop"ents #ith the ai" of incorporating s%ch inno'ation in arcos end prod%cts( arco sho%ld not rel! on o%tside so%rce for ra# "aterials &%t instead de'elop "ost of it in-ho%se( In lie% of this re$%ire"ent an i""ediate "eas%re to reckon #ith is that the! find "ore pro'iders of t%&es, not j%st Son!(  @(Het another ke! factor for Son!s st%pendo%s s%ccess is their ela&orate distri&%tion s!ste"( Son! dispersed their prod%cts thro%gh an adroit net#ork of capti'e co""ercial distri&%tors aided &! .;11 dealers as opposed to 5; distri&%tors and 511 dealers of arco( In =(S alone, Son! had ;11 dealers co"pared to PS .11( *ore'er Son!s procli'it! to#ards &o> dealers and their e>tensi'e co'erage a&etted lo# street prices for its projectors and also higher sales 'ol%"es( This sho%ld &e a c%e for arco to re' %p their distri&%tion channel as #ell #hich at present is inade$%ate(0(Het another critical factor #hich arco #o%ld re$%ire to s%stain their ascendanc! in the projectors "arket is to perfor" efficient en'iron"ent and co"petitor scanning to sta! ahead in the race( This #o%ld certainl! ens%re that arco is not ca%ght off g%ard again &! co"petitors strategies(8(6 "ajor dra#&ack of arco projectors are their co"ple>ities and specifications( It #o%ld &e hand! for arco to "ake their prod%cts "ore %ser-friendl!(ontin%o%s  s!ste"atic sco%ting for ne# technological de'elop"ents #ith the ai"of incorporating s%ch inno'ation in arcos end prod%cts(
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