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The competitive situation on the projector market considering Electrohome production in 1989 and the strategy applied by Sony will be discussed in the present essay.
Electrohome was a Canadian company, a relatively small batch manufacturer, by 1989 mostly specializing in projector production. The company proclaimed key advantages of its products like user-friendliness, relatively small size that broadened the possibilities of mobility, reliability. The concepts of user friendliness were presented by three-lens system easily setting due to microprocessor memory, automatic digital convergence, remote control, and adjustable image size. Thus, the product costs were not low, and the company did not stand for the best picture quality in the industry, the picture was but more than acceptable for the majority of its target customers. Electrohome strategy was focused on improving the quality and ease of use of the existing product line. Electrohome projector production targeted training and conference rooms, and engineering and status display/mapping system segments. But the majority of last required higher resolution than 4000 provided the best of the Electrohome projector line. The major Electrohomes competitors in the segment of industrial projects were Sony, Barco, and NEC. With NEC competing in digital technology, providing easier adjustment procedure for the focus of the projector, Barco in graphics providing very high picture quality; and Sony competing in the video and data segments, providing the best quality projector in terms of scan rate, brightness, image quality, and resolution.
The projectors Sony produced did not present the best scan rate, brightness, image quality and resolution by 1989. But the prices were 15% below the prices of the industry leaders in every projector category. Among dealers, Sony also had a reputation of having reliable projectors at a low price, but Sony did not promote the reliability of the projectors to the end users.
Sonys bet on 1270 model was that the new eight-inch tube was introduced. The other projects on the market were operating on the basis of a seven-inch tube that mostly were manufactured and provided by Sony company. Sony-produced tubes were considered to be the best in the market. Electrohome projectors were based on Sony tubes, and that was 15% of a projector cost structure. The eight-inch tube provided a better image but had a disadvantage. It was new and not properly tested. Besides, in 1270 scan rate and bandwidth capabilities were not synchronized. Though 1270 displayed superior picture quality at Siggraph with the new eight-inch tube if the high scan rate was used for particular graphics application, the bandwidth would be not sufficient to maintain the superior picture quality. There was a high possibility that the customers would not recognize this potential flaw. The 1270 model was also presented at the correct time just before the Infocomm show, so the competitors did not have time to come up with the better offer. Besides the new eight-inch tube was of a square shape that required a serious amount of engineering work to implement it to the existing projectors as the previous tubes were rectangular. If the competitors came with the better idea of synchronizing the tube and the bandwidth capabilities, they would have to put a lot of time and costs into implementing new square-shaped tube into the existing systems. Moreover, the lower price for Sony projects played one of the key roles even not considering that 1270 was 30 pounds heavier than any of the projectors Electohome could offer.
The Sonys strategy by introducing 1270 was to win the market by introducing the new technology, that could not shortly be implemented by the competitors, for the low cost that also could not be set by the competitors immediately.
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