Barco Case
Which of three product development options should BARCO pursue and why?
Going by all the information given in the case, Barco should go for launching the BD700 in time for Infocomm in January 1989. The reasons for this decision are as follows:
• The BD700 is Barco’s pet project that has already seen an investment of 180 person months. Only about 27 person months more is to be allocated for its full launch development. This is not a high amount and a fully functional version can easily be launched in time for Infocomm.
• It is a superior product in the data projector market and is most likely to be readily received by the market over other comparable products. The 64 KHZ scan range is an attractive product attribute.
• Introduction of Sony’s 1270 is touted to erode 30-60% share of BD600, based on its launch price. But a higher quality data projector like BD700 will help offset this market erosion.
• Price point of BD700 is expected to be $16000, which is comparable to 1270’s price range of $15000-$20000. This lower price is certainly going to be an attractive proposition for business customers.
• As per the distributors in Germany, bookings for BD700 had already been made in a considerable number. Not meeting customer’s expectations in delivery time will harm Barco’s brand value and effect negatively its goodwill.
• Because the R&D team including the engineers of the company had invested a lot of time and energy in developing the BD700, stopping them in between flow and diverting their attention towards developing a different product would most certainly be sap on their morale.
• Sales of the BD700 has been forecast as being 25% extra over the sales of BD600, which comes to be about $4.3 Million.
• All the advances in R&D that goes into making the BD700 can later be used as a springboard to develop graphics projector products like the BG800.
Problems with developing the BG700 or BG800:
• Diverting funds and energy away from the BD700 would delay
Going by all the information given in the case, Barco should go for launching the BD700 in time for Infocomm in January 1989. The reasons for this decision are as follows:
• The BD700 is Barco’s pet project that has already seen an investment of 180 person months. Only about 27 person months more is to be allocated for its full launch development. This is not a high amount and a fully functional version can easily be launched in time for Infocomm.
• It is a superior product in the data projector market and is most likely to be readily received by the market over other comparable products. The 64 KHZ scan range is an attractive product attribute.
• Introduction of Sony’s 1270 is touted to erode 30-60% share of BD600, based on its launch price. But a higher quality data projector like BD700 will help offset this market erosion.
• Price point of BD700 is expected to be $16000, which is comparable to 1270’s price range of $15000-$20000. This lower price is certainly going to be an attractive proposition for business customers.
• As per the distributors in Germany, bookings for BD700 had already been made in a considerable number. Not meeting customer’s expectations in delivery time will harm Barco’s brand value and effect negatively its goodwill.
• Because the R&D team including the engineers of the company had invested a lot of time and energy in developing the BD700, stopping them in between flow and diverting their attention towards developing a different product would most certainly be sap on their morale.
• Sales of the BD700 has been forecast as being 25% extra over the sales of BD600, which comes to be about $4.3 Million.
• All the advances in R&D that goes into making the BD700 can later be used as a springboard to develop graphics projector products like the BG800.
Problems with developing the BG700 or BG800:
• Diverting funds and energy away from the BD700 would delay