1. How does Barco provide value to its customers? How does this differ from Sony's creation of value for its customers? Suppose Sony announces the launch of the 1270 in October 1989 at a price of $16,500. Barco provides value to its customers by providing technically superior projectors within a niche market; Sony creates value for its customers by offering projectors at a lower price. Sony was the major player in the video segment and was known for its large dealer network and lowest retail price. Barco maintained market share in the graphics and data segments and was known for creating higher quality projectors with more advanced technology. The easiest way to look at the value proposition of both companies is the complete value chain analysis of both companies. R&D/Innovation: Barco has stronger R&D/Innovation than Sony and Barco believes it has more engineers on staff than Sony. Barco is known for innovation and use of top technology and could even achieve better projection using Sony tubes than Sony could. However, Sony has surprised Barco with new product launches in the past. In 1985, Sony introduced the 1020 projector which was slower than the Barco projector, but had a higher quality tube. In 1987, Sony introduced a new tube into its projector that Barco had never seen before. Manufacturing: Barco buys most of its tubes from Sony; while Barco believes this is a strong relationship; Sony has introduced newer tube projectors than those previously offered to Barco. Barco is looking for other tube suppliers, but so far Sony has got the highest quality and lowest price. Barco is planning ahead and maintaining three months of inventory...... middle of paper......0. Although this value is higher than that of the comparable Sony 1270 projector, the new Barco model will be technologically superior in all factors. The $19,000 price tag shows that it is newer and more advanced and maintains Barco's brand image as a premium projection company. Barco should cost the new BG800/BG900 model around $28,000. The current BG400 model is priced at $24,000, so assuming the new BG800 or BG900 models will have an even faster scan speed, the price should increase. It is hoped that by bringing in its own research and development, and possibly manufacturing, for projection tubes, Barco will be able to lower the price of the BG models in the future and release the BG800 or BG900 model at $25,000, only slightly higher than the Current model BG400. Production price?BD700 $16,000 NoBD900 $19,000 YesBG700 $25,000 NoBG800/BG900 $25,000 - $28,000 Yes