The 1270 developed by Sony is going to make BPS lose75% of its forecast 1990 profits. BPS needs to find an alternative solution to compete with Sony’s projector before the Infocomm show.
Alternative 1: Price drop
By dropping the price of its competing projector BG400 and BG600, it could try and compete with Sony’s 1270 until new projector is developed. However, there are few concerns with this option. First of all, BPS positioned itself in the upper-class category. If the prices are dropped then not only it would upset its customers but also it can damage its reputation and never recover to its original price positioning again. Secondly, even if BPS lowers its price, Sony can lower the price even more and BPS won’t be able to follow. Last and most important concern is that the pricing for 1270 is still unclear. So before any confirmation is made, any rash decisions might damage the company.
Alternative 2: Development of BG700
By developing and introducing BG700 at the Infocomm show, BPS can at least have a similar product that can match with Sony’s 1270. However there are downfalls to this option. First, the BD700 project has to be postponed and miss its initial introduction date. This would cause a problem with its advanced-ordered customers and its engineer’s morale. Secondly, the BG700 can match 1270’s scanning frequency but not its digital graphic projector. So it is still inferior to 1270. This would be a major downfall for BPS because BPS is known for its innovative edge and it is the leader of this field. Therefore, if BPS allows Sony to top its product then it would give away its leader position and let down is buyers.
Alternative 3: Development of BG800
The company can immediately start its project on BG800 and this would be a product that will top Sony’s 1270. The advantage of this option is that it can shock the whole world and redeem its place during the Infocomm. In addition, Sony can supply the 8” tubes immediately so there would be no delay. However there are many concerns to this option. First of all, to complete this project on time, BPS would have to stop all other BPS development projects from October 1 which includes the BD700. This would bring back the concerns for stopping BD700 I described above. Secondly, the engineers have been working overtime on BD700 for a long time and to put a sudden stop to this project would definitely upset them. Also they would have to give up vacation days until Infocomm, this could damage its employee relationship even more. Thirdly, the quality of the final product might be damaged due to the limited amount of time. If the product is ready but there are too many bugs or defaults then it would damage the company’s reputation even more than loose to Sony. Fourthly, the company have no suppliers for special lenses required for the 8” tube. Finally, the uncertain of Sony’s pricing and only 40% chance of making the deadline are also critical issues to…