Case Study MTM PGPIIMBangalore
Case Study : Banco Projection Systems
PROTOGONIST
• Erik Dejonghe
• Senior Vice-President and chief operating officer of Barco
PROBLEM STATEMENT
• Sony announced launch of their new product, the 1270 projector series
• Sony promised 1270 to be more advanced, claimed to be superior, great performance and significant cost reduction to the buyers
• Barco, who were caught off-guard by Sony, are way behind Sony on this front, and have to make immediate changes to avoid reduced significant market share.
Alternatives
• Price War :
Lower the price of BPS to be less than the 1270 Sony Product
• Competitive Product Development :
Develop a Competitive Projector BG800
• Complete the Existing Developed Product
Develop a Projector BD700
• Wait and Watch Strategy
7:2:1 Strategy for New Product Development
Price War – Part 1
1) The 1270 is launched with a price of $20,000
• The margin contribution of the BG400 is 29%.
• Cost to produce is $17,040
• Estimated market share loss of 30%
• Selling Price can be till $19999 and Barco looses 17% advantage as compared to $24000.
Price War – Part 2
1) The 1270 is launched with a price of $15000
• The margin contribution of the BG400 is 29%.
• Cost to produce is $17,040
• Estimated market share loss of 60%
• Selling Price cant be less than $17040. Thus not applicable.
Competitive Product Development –
Pros
• Barco will be able to diversify on the Market Segmentation Front by making Barco’s other products to be a part of an Non Premium
Segment.
• Threat of Market Wipe Out is Removed.
Competitive Product Development –
Cons
• Considerable amount of Resources and allocations will be used.
• General Manager of BPS -> Frans Claerbout said that P(Product
Development of BG800 ) = 40% -> Thus surety is not present.
• 7:2:1 New Product Development Ratio can also be an important criteria.
• BD700 Series Production and Development may stop.
Complete the Existing Developed Product
• If Barco manages to achieve this feature, it will not
PROTOGONIST
• Erik Dejonghe
• Senior Vice-President and chief operating officer of Barco
PROBLEM STATEMENT
• Sony announced launch of their new product, the 1270 projector series
• Sony promised 1270 to be more advanced, claimed to be superior, great performance and significant cost reduction to the buyers
• Barco, who were caught off-guard by Sony, are way behind Sony on this front, and have to make immediate changes to avoid reduced significant market share.
Alternatives
• Price War :
Lower the price of BPS to be less than the 1270 Sony Product
• Competitive Product Development :
Develop a Competitive Projector BG800
• Complete the Existing Developed Product
Develop a Projector BD700
• Wait and Watch Strategy
7:2:1 Strategy for New Product Development
Price War – Part 1
1) The 1270 is launched with a price of $20,000
• The margin contribution of the BG400 is 29%.
• Cost to produce is $17,040
• Estimated market share loss of 30%
• Selling Price can be till $19999 and Barco looses 17% advantage as compared to $24000.
Price War – Part 2
1) The 1270 is launched with a price of $15000
• The margin contribution of the BG400 is 29%.
• Cost to produce is $17,040
• Estimated market share loss of 60%
• Selling Price cant be less than $17040. Thus not applicable.
Competitive Product Development –
Pros
• Barco will be able to diversify on the Market Segmentation Front by making Barco’s other products to be a part of an Non Premium
Segment.
• Threat of Market Wipe Out is Removed.
Competitive Product Development –
Cons
• Considerable amount of Resources and allocations will be used.
• General Manager of BPS -> Frans Claerbout said that P(Product
Development of BG800 ) = 40% -> Thus surety is not present.
• 7:2:1 New Product Development Ratio can also be an important criteria.
• BD700 Series Production and Development may stop.
Complete the Existing Developed Product
• If Barco manages to achieve this feature, it will not