Advantage: Boeing (For the moment, anyway…)
A delay strategy worked for Boeing. Source: Getty via Northrup via BusinessWeek.com
The U.S. Defense Department just announced that it has put the evaluation for their new tanker on hold.
From the recent BusinessWeek article: “Because of the politics and emotions behind the contract to buy new refueling tanker aircraft, neither Northrop nor Boeing gets the prize for now.” BW sure has that right, especially the word “politics.”
Months ago, the Northrup sales team played the political structure at the Air Force quite well, employing a flanking strategy and getting the buying criteria changed, leaving Boeing at a significant disadvantage.
From the article: “It was Boeing, however, that threw the latest wrench in the works, by asking for more time to submit a bid involving a larger aircraft, which the Air Force had favored. Boeing had threatened to pull out of the competition if it didn’t receive a six-month extension to develop such an aircraft, a move that would not have gone over well in Congress and the Pentagon, where leaders are determined to have a competition.”
Bruce Ellis, CEO of The Bee Group, and a TAS Group affiliate, is a savvy competitive sales strategist. Bruce has been commenting all along as I continued coverage on the progress of this $35 billion opportunity. Check out Bruce’s comment to my previous post Who Will Win This $35 Billion Deal? where he explains Boeing’s delay strategy. Commenter Santo Cuollo has a good grasp of this deal as well.
So now, at least from the outside, the deal is in a holding pattern until after the new administration is in place. In the meantime, you can bet the Boeing and Northrup teams are working their Air Force contacts behind the scenes, positioning for advantage for when the clock starts again.
What does all this have to do with you? If you’re selling into any type of complex environment and your team isn’t skilled on 1) leveraging politics in the customer’s organization (or government agency) and 2) devising and executing competitive strategies and tactics, you’re at a disadvantage.
Filed under: Big Wins, Buyers, Competition, Opportunity Management, Sales Strategy
Let’s hope the Europeans grow a pair of collective balls and give Boeing the same treatment when it comes to their military procurement.
How is it that Boeing didn’t even have a prototype ready for the tanker? Is it because they were sure to get the contract no matter how bad their offer was (no airlines has been buying a 767-200 for TEN years…)
Why would Boeing need 6 more months? Is it to finally offer a new aircraft, or is it just because they want a friendlier administration?
What happens to the US content of the Boeing aircraft when the company’s own workers are on strike because of the outsourcing of their work?
It appears Boeing’s Delay Strategy is working:
The announcement by French aero-defense group EADS that it was pulling out of the bidding process for a $35 billion contract to supply mid-air refueling planes to the Pentagon sent shock waves across Europe this week. EADS, which was partnering in the bid with the U.S. company Northrop Grumman, based its decision on its claim that the competition had been rigged in favor of archrival Boeing — an accusation that spurred charges of unabashed American protectionism in Europe. Now, with both sides digging in their heels, what began as a trans-Atlantic flap over the refueling aircraft business is starting to sound like a full-blown trade war.
Read more: http://www.time.com/time/business/article/0,8599,1971382,00.html?xid=rss-topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+time%2Ftopstories+%28TIME%3A+Top+Stories%29&utm_content=My+Yahoo#ixzz0i01de204
Amazing!