Subhanjan Bhattacharya61410694Section JBarco Case Writeup

ContextExpected growth of the world-wide projector market by 8.5% per year through 1994CollaboratorDistributors and dealersCompetitorMajor competitors are Sony, Electrohome and NECCustomerIndustrial applications : US being the primary market, followed by Western EuropeCompanyOne of the top 3 in world in graphic arts, CAD and industrial projectionSuperior quality product, niche marketFocus on graphic projectorsSuperior scan-rateSituational Analysis 5C

Barco should go ahead with first option BD700 because of the following reasons:1. It would not have to compromise with its quality of product or price, which is essentially against BARCOs company value proposition2. It already has received orders and lot of man hours have been put in for the launch of this product3. Its a growing market (annual growth of 12.5 %)4. Loss in revenue in BG400+BD600 is approximately 4.65 million US$ and the gain in revenue is more or less same = 4.3 million US$5. Its a quality product and important for companys reputation and engineers and customers morale6. It would imply no delay in launch, saving time and hence lost sales for the company7. Its a superior product compared to BG700 and BG8008. Sonys tactics are still not well-estimated, so its better to wait and watch competitors action and do not act hastily in response to itSheet1ESTIMATED LOSS OF BG400 SALES ON INTRODUCTION OF 1270Revenue Loss if BG400 is priced same and 1270 is priced at $200003.85MnUS$Revenue Loss if BG400 is priced same and 1270 is priced at $150007.69MnUS$Estimated Price Elasticity of the marketln (MS2/MS1)/ln(P2/P1)-2.41Assuming other factors like sales force and advertisement are same ESTIMATED LOSS ON THE SALES OF BD600AssumptionPrice Elasticity Same-2.41 5.375Constant Term (Product Quality+Advertisement+Sales)Sony's higher by 20% since Sony is leader in the Data Market(delta MS)/MS = -2.41 *(delta P)/Pdelta P5432Loss in Market Share in BD6000.125Current MS = 23% or 12.5%If loss is 30%, revenue loss is3.85If loss is 12.5%, revenue loss is1.60Price of 24000 corresponds to loss of1.6Price of 12000 corresponds to loss of0.8million US$Total Estimated Loss4.65million US$

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