Rubric
1.
Problem Statement (10 points maximum)You should provide a brief analysis of the key
problem in the case. Be sure to focus on
a problem – not a symptom. And it should
be a fundamental problem, being the real deep underlying problem not the
surface problem. Some cases might have
more than one problem, you should focus on
only one problem for the short case write-ups. And all of your
subsequent analysis should be directly related to solving this problem.
_____ 10-9 Points are awarded to answers that identify the root
problem –only one problem-,
which when resolved produces the greatest positive impact. The diagnosis is insightful, mindful of
over-arching strategic priorities, and fully exploits the unique strengths of
the company in question, and uses concepts from both BUS 655 and BUS 656.
_____ 8-7
Points are
awarded to answers that identify an appropriate problem, but not necessarily
the best one. The problem statement either addresses an issue that is less
likely to have a broad impact or is more difficult to manage, in other words a
better opportunity was missed.
_____ 6-5 Points are awarded for problem statements that are
too vague to be actionable.
_____ 4-3 Points are awarded to answers that identify a
symptom rather than a root problem.
_____ 0-2
Points are
awarded for misdiagnosis.
2.
Two alternative solutions (20 points maximum) Describe two
alternative solutions AND
discuss pros and cons of each
solution. Please focus on one
particular element of marketing strategy (for example, just pricing, or
just place, or just promotion). If you offer only one alternative I will take
your answer as incomplete, and reflect that on your grade. So be sure to
discuss two alternative
solutions. Also please note that students who use the facts in the case and
apply the tools, concepts and techniques (including quantitative techniques)
that were taught in MKT 310 to those facts, will receive higher grades than
those who just brainstorm with no solid analysis. For example, if there is
information about firm’s cash inflow from a particular customer, students who
conduct a customer lifetime value analysis and then base their decision to
serve or not to serve to that customer on the basis of their analysis will
receive a higher grade than students who just decide to serve the customer with
no solid analysis backing their decisions. It is also critical that students
use the facts in the case to discuss the pros
and cons of each alternative solution.
3.
_____ 20-15 Points are awarded to exceptional answers. This
answer is comprehensive, efficient and compelling, and uses the facts in the
case, conducts required analysis, and considers the most relevant factors. The answer focuses on the most relevant element of marketing strategy
(i.e. most relevant P or the most relevant Segmentation, Targeting, Positioning
element). The answer focuses on one
rather than multiple elements (i.e. only pricing, or only promotion,
etc). The answer develops TWO alternative solutions for
the selected marketing strategy element and discusses pros and cons of each alternative in detail using the facts
in the case, and the analysis tools (including quantitative ones) that were
taught in MKT 310.
_____ 12-14 Points are awarded to answers that cover the bases,
but could have been developed more insightfully. One relevant marketing
strategy element is selected but the alternatives are not particularly
insightful or creative. Neither are pros
and cons are as elaborate.
_____ 9-11 Points are awarded to answers that fail to develop two alternatives or fail to
discuss their pros/cons, or
fail to use only one marketing strategy element throughout each alternative.
_____ 5-8 Points are awarded to answers that select an
inefficient marketing strategy element and/or failed to develop alternatives
properly and/or fail to discuss the pros and cons of alternative solutions in
detail.
_____ 0-4
Points are
awarded for describing alternatives that don’t respond to the problem
statement.
4.
Recommendations (20 points maximum) Choose one of the two alternative solutions
and discuss why you chose it (given its cons), AND how you would implement it. So for example if your three alternative
solutions were based on three different pricing schemes, here in this section I
expect you to discuss why you chose the pricing scheme that you chose, and then
discuss how you would implement it specifically. Will there be discounts, if so
to whom, how are you going to decide the channel members’ markups etc. Students
who have a more detailed and to the point implementable plan will receive
higher grades than those who have a plan but no details.
_____ 20-15
Points are
awarded to answers that describe why they chose the alternative that they chose
in compelling detail. The answer discusses why the “pros” of their recommended
alternative is much more important or effective than the “pros” of the other
alternatives and how the “cons” of the alternative chosen can be managed. The
answer describes the implementation plan in detail. The plan is realistic and
implementable.
_____ 12-14
Points are
awarded to answers that fail to discuss how to manage the “cons” of the chosen
alternative in a detailed compelling manner and/or fail to discuss why their
chosen alternative is the best alternative, and/or base their recommendation on
faulty assumptions, or on assumptions that they do not explain in detail. The
implementation plan is not very clear.
_____ 9-11
Pointsare
awarded for recommendations that are too vague to be actionable , and/or not
realistic (for example, the budget constraints are not taken into account, or
the situation of the industry is not taken into account).
_____ 5-8
Points are
awarded for any recommendation that fails to respond to the identified problem.
_____ 0-4
Points are
awarded to recommendations that are likely to result in damage to the
company.
Problem
Statement.BPS had historically been
the leader in the niche high-end projection market and enjoyed a first mover
advantage which enabled them to employ a price-skimming strategy that targeted
a niche market. However, BPS has not
been innovating at the high-end of the market in the last year and a half. As a
result, Sony came in to fill that gap in the market.
Alternative
1: Continue with the development of
BD700 and introduce it on time in October.
Pros:There
are already orders from the BPS’ German distributor (pg12) and others. If they
perceive BPS as not able to deliver their promised offering in time, they might
lose their loyalty to BPS. Also, the engineers have been working over-time for
the development of BD700, introducing it on time would increase their morale.
Cons:Sony’s
new product 1270 has the power to scan up to 75 kHZ and is likely to be priced
between $15,000 to $20,000. This is a much better scan rate than that of BD700
(which has a64 kHz scan rate) and is priced at $16,000. So BD700 will not look
like a great deal to customers.
Especially if Sony decides to introduce it at $15,000.Barco might not
continue its reputation as the tech-leader, when its products have lower scan
rates compared to that of Sony’s.
Alternative
2: Introduce BG700
I would expect you to do a similar
pros and cons analysis for each alternative, supported with facts from the
case, and use of tools that we will be learning at class to support your
arguments.
Alternative
3: Introduce BG800
Pros:If
Barco can introduce BG800 at Infocomm, with its 90Khz capacity it would be the
best product in the market and once again can continue with its reputation and
be able to ask a price premium for its products. With this alternative BPS
would not need to engage in any price war with Sony. BG800 will be higher quality than Sony, so
BPS can demand a higher price for it.
Cons:Claerbout
gives BG800 only a 40% chance of making the Infocomm deadline.The engineers
have been working over-time for BD700, telling them that this project is
postponed would decrease their morale. Pushing the introduction of such a
high-tech product in such short time might increase the reliability and quality
issues in the final product. It is not clear whether the market is ready for
such a high-end product.Investing all the engineering resources in the
development of BG800 implies that the other projects would have to stop.There
are customer orders for BD700, postponing its introduction means that Barco
would have to ask customers to wait. Would the customers wait?It is not clear
whether BPS can find a lens supplier.Recommendations
(20 points maximum)
I recommend
alternative 3.This is the
alternative that really solves the initial problem statement. This solution would
bring BPS back on its innovation track.My implementation plan is, first of all,
BPS should be honest with its engineers and describe the situation clearly, and
offer an options package, where if Barco can make the deadline and if there are
not any reliability and quality issues with the product, the management should
offer the engineers the option to purchase Barco stocks at a given price. (As
we don’t have any information in the case re. the stock prices, I will not be
able to describe how that option system would work). Secondly, Barco should continue working with
Sony Components in the short term, and use the 8 inch tube for their BG800
product. So Barco needs to work with either Fujinon or US Precision Lenses to
supply the required lenses for the 8inch tube. Barco should first ask Fujinon
if they can supply the lens. If not Barco should ask US Precision Lens. Barco
should describe the situation in detail and communicate the supplier that if
they cannot supply the lens Barco is likely not to survive. Thirdly, even if
the market is not ready for such a product, Barco needs thisproduct for its
reputation. BPS’s reputation enables BPS to ask higher prices for its other
products. So BG800 works as a testimony for Barco’s commitment to high-technology,
high quality. Barco should communicate to all of its dealers and distributors
that a new higher-end product is going to hit the market very soon (without
necessarily claiming to hit the Infocomm deadline). This would help Barco
maintain its reputation. Fourthly, Barco
should offer a deal to the customers who have been waiting for their BD700
orders. Depending on customer’s needs Barco can either offer a lower priced
BG400 or a lower priced BG800. This way, the customer still gets a new and high-end
product on time.
Worldwide Niche Marketing
Barco Projection System
Contents
- Brief
diagnosis of central issue ………………..……..………….3 - Issue
and situation analysis ….……………………..……………3 - Alternative
solutions proposed …..…….…………………………5 - Recommendation
and other considerations……………..………6
1. Brief diagnosis of central issue
Barco was originated from electronic
company who produced radio receiver and television receiver. Based on its
strong R&D capabilities, Barco had expanded its business domain and caught
up emerging technologies. As one of business expansion, Barco’s Projection
System Division (BPS) started from 1980 and it became major business which
represented 23% of total revenue of Barco in 1988.
Projection System Division grew rapidly
without major challenges from its competitors and preempted product and market
leadership last decade. BPS’ strategies were to focus on high-end products in
niche market and to rely on R&D which top management thought the way to
survive.
In 1989, BPS faced on major challenge
from Sony with the new product, 1270, and it could put BPS in rigorous market
competition in Graphic Projection product segment in which BPS was a market
leader. Sony’s new offers are very impactful because:
- Possibly lower price than BPS’ Graphic Projection, but
shows higher performance - Sony had mass production and distribution capabilities.
And Sony was already a market leader for Data Project segment based on
those capabilities. - Sony already developed new product and ready for
showcase in major trade show.
Therefore, BPS needed to revamp their marketing
strategy and also get agile product strategy and capabilities.
2. Issue and situation analysis
Because of Sony’s challenge, BPS
expected that it would be possible to lose market and also technological
leadership which were recognized as the main strength of BPS. This issue was caused
by their marketing strategy which was based on engineering, not market driven.
Technology driven R&D with
deficient or no strategy
Barco’s strategy was too much
technology driven. Even Barco was very good at organizational collaboration
across the functions for R&D initiatives, it was possible that their focus
was in wrong direction and not flexible enough to read market demand. And also they
didn’t have enough information of the customers and understanding competitors’
move. With Sony’s 1270, BPS’ reputation as a technology leader could be
damaged.
Uncertainty of market and competitors’
situation
Sony’s pricing strategy and actual
launching timing for new product was unknown, thus it was not possible to set
up proper strategy for BPS’ product development and response proactively.
And Sony’s market segmentation was
quite different than BPS because Sony tried to consolidate Data and Graphic
Projection products into one segment to get economic of scale and to utilize
current distribution channels. If BPS made assumption without enough
information, it was possible to put them into pitfall by themselves.
Limited capabilities on core materials (e.g.
Lens, Tube)
BPS was too much dependant on
outsourcing even for their core materials and its dependency influenced and
limited BPS’ new product development work also. BPS already had contract with
Sony for supplying required premium quality tube, however, Sony was not proactively
introducing their new 8” tube to BPS because it could differentiate Sony’s new
products which would compete with BPS. And it was possible same practice can be
recurred again and again by Sony. Thus, BPS needed to have strategic partners
for supplying parts and also co-development for next generation of products.
Limited time line to prepare and low
probability to success
BPS noticed Sony would present their
new product during Infocomm, the major trade show which would determine the
sales of the year. But, BPS didn’t have enough time to prepare new product
(BG800) to confront Sony’s challenge. And it was necessary to stop current
development project and reallocate resources to new projection
development.
3. Alternative solutions proposed
BPS thought there were 3 options they
can choose and it had pros and cons.
|
|
Pros |
Cons |
|
Option 1 : Keep development of BD 700 |
· · · |
· · |
|
Option 2 : Accelerating BD700 development and leveraging it for BG700 development |
· · |
· · · · |
|
Option 3 : Immediately move to BG800 |
· · · |
· · · |
4. Recommendation and other
considerations
Too much concerning on Sony’s new product
can distort the reality of the market demand and influence BPS’ market
reputation. Therefore, we recommend that continue the BD700 development and
revise the marketing and product strategy in company wide.
Reasons for choosing option #1
- Too risky to change over to BG800 development because
its probability to success is 40% with limited time line. And also immediate
BG800 development doesn’t look like feasible option in terms of resource
allocation including budget and engineers.
- Market and customer needs analysis is not performed
yet, thus Barco still assume Sony will challenge the Graphic Projection
market. Barco doesn’t have enough information on Sony’s pricing strategy
and launching time for new product. - Sony is new comer for Graphic projector market. But
Barco already has excellent reputation in relevant market. Thus, Barco can
take time to catch up even Sony launch higher performance product in
advance. - Graphic Projector market is highly growing market;
however 77% of BPS’ sales volume is coming from Video and Data projectors.
And Video and Data projectors’ cost structure is better shape than Graphic
projectors (e.g. Data projector’s margin is 51% and Graphic Projectors’
margin is 29%). Therefore maintaining existing customers who already
issued pre-order for BD700 is more critical than confronting Sony’s
challenge. - Stable revenue generation from Data Projector segment
can compensate possible market share declining in short period of time. - Sudden changes in development project from BD700 to
BG800 can cause turmoil among engineers and also customers.
We choose option #1 to continue to develop
BD700; however BPS needs to develop BG 800 anyway because Graphic Projector
market growth will be around 40% in next 5 years.
Before BPS decides to develop BG800,
they need to consider followings for sustainable success in the market.
To perform customer analysis
One of the weaknesses that Barco have
is poor market and customer needs analysis because they have focused on
engineering driven product development.
- Barco needs to have deep analysis on cost and benefits
in customers’ point of view. - Based on analysis, BPS can define what are the value
drivers for customers to choose products and gets ideas on pricing.
Market analysis based marketing and
R&D strategy
BPS might need to revise marketing
strategy and R&D strategy for each segment of the product.
- Deeper analysis on market and current capability: As a first step, we can analyze
current product segments with couple of measures such as competitive
position in the market and market attractiveness. Based on analysis, BPS
can get clear visibility on which market BPS will pursue and develop more
customer-focused marketing and R&D strategy.
|
Competitive |
Market |
|
Market share, Product and Brand |
Market Size, Market Growth Rate, |
- Product Portfolio: Current Sony’s approach is consolidating Data and
Graphic projectors segment to get efficiency and effectiveness in
production and distribution. BPS has two clear product segments, high end
and low end. And it is one of the strength of BPS, thus keep maintaining
current product segment and try to differentiate products. - Less complex system with user friendly interface
- Maintain highest performance system in portfolio and
its quality - Maintain technological advancement
- Strategic partnership for core capability development: There three major components for
projector production (Tubes, Lenses and Electronics) and all three
components are correlated each other. For example, we need to upgrade tube
and lens together to improve performance of projectors. But it will take a
lot of cost and effort to develop new generation of all components in
house. Therefore, BPS needs more efficient R&D strategy. - Make strategic partnership with raw material suppliers
- And co-develop higher performance parts
- Possibly can create Joint Venture for those purposes
- Distribution Expansion: Currently BPS has smaller
distribution channel than Sony and very low distribution in Asia, thus they need to consider distribution
channel expansion.
Pricing strategy
- Immediate price cut is not feasible solution at this
moment because of influence on current customer. And also Sony’s pricing
strategy is not released yet. - BPS can not afford competitive price reduction against
Sony, thus BPS needs to play game with product performance and quality
rather than price itself. - However it is necessary to consider cutting BG400’s
price after launching BG800 in the future.
Reduce business risk on material
sourcing
Current raw materials sourcing of BPS
is too much dependant on several vendors; therefore Barco always faces on
inevitable business risk. Thus, BPS needs to diversify raw material vendors.
To promote next generation product plan
during next trade show
BPS might lose chance to show better
product than Sony during Infocomm, however they can leverage their installed
base of current Graphic Projectors and reputation on their premium quality of
technology. BPS needs to promote their development plan for BG800 which will
have better quality than Sony and will be launched in short time. This will
help to lead customer who are already satisfied with BPS’ products to purchase
next version.
– EOD
–
