Boise Automation was a Canadian company specialized in automation solutions for industries like paper making. It had competitive advantages in technology but lost an order from Northern Paper Inc, a long-time customer. There were 4 factors for this loss: 1) Boise did not understand Northern Paper's requirement for existing rather than new technology due to budget and familiarity. 2) Boise overemphasized its new technology without understanding Northern Paper valued price more. 3) Boise did not thoroughly study competitors. 4) Boise's informal communication with multiple contacts at Northern Paper hurt its credibility.
Boise Automation was a Canadian company specialized in automation solutions for industries like paper making. It had competitive advantages in technology but lost an order from Northern Paper Inc, a long-time customer. There were 4 factors for this loss: 1) Boise did not understand Northern Paper's requirement for existing rather than new technology due to budget and familiarity. 2) Boise overemphasized its new technology without understanding Northern Paper valued price more. 3) Boise did not thoroughly study competitors. 4) Boise's informal communication with multiple contacts at Northern Paper hurt its credibility.
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Boise Automation was a Canadian company specialized in automation solutions for industries like paper making. It had competitive advantages in technology but lost an order from Northern Paper Inc, a long-time customer. There were 4 factors for this loss: 1) Boise did not understand Northern Paper's requirement for existing rather than new technology due to budget and familiarity. 2) Boise overemphasized its new technology without understanding Northern Paper valued price more. 3) Boise did not thoroughly study competitors. 4) Boise's informal communication with multiple contacts at Northern Paper hurt its credibility.
Boise Automation was a Canadian company specialized in automation solutions for industries like paper making. It had competitive advantages in technology but lost an order from Northern Paper Inc, a long-time customer. There were 4 factors for this loss: 1) Boise did not understand Northern Paper's requirement for existing rather than new technology due to budget and familiarity. 2) Boise overemphasized its new technology without understanding Northern Paper valued price more. 3) Boise did not thoroughly study competitors. 4) Boise's informal communication with multiple contacts at Northern Paper hurt its credibility.
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Boise
Automation -GROUP 9
Canada
Ltd
Boise Automation a Canadian arm of Boise Corporation Inc., specialized in turnkey
automation solutions that included custom design of automation systems, supply of equipment and components in the system, and complete turnkey installation and start-up services to make the system fully functional for the customer. As this work required considerable process knowledge of the client systems, Boise targeted specific industries of which Paper making industry was one. Boise had competitive advantage in the market due to its high-end technology such as high resolution displays, on-screen help functions, latest sensors etc. which improved its accuracy, display capability, reliability in harsh conditions and speed of processing. It also had an excellent reputation in the market for high customer satisfaction largely attributed to the efforts its engineers put into understanding the customers needs. However, it lost an order from Northern Paper Inc which was its customer for the over three years. Why Boise had lost the order? We identified 4 factors which might contribute to the loss of the order. 1. Problem Recognition: The customer requirement was not clearly understood by Boise. The company was trying to help the customer by suggesting advanced technologies and equipment but the customer wanted to go with the existing technology due to various factors such as budget constraints, ease & familiarity of use by the operators. 2. Customer Value Assessment: Boise was known for high customer satisfaction due to the efforts it put in understanding the customer requirements. But this time, in an attempt to provide additional value to the customer, it tried to push its opinion of the latest technology on to the customer. However, for the customer price was of more importance. The company did not understand this point even after the customer repeated it multiple times. 3. Competition Study: Boise was not thorough with its competitors, their growth, status etc. in the market. This led to loss of order when the time called for it. 4. Informal Communication: The company approached the client through multiple sources in an attempt to convince the customer for the latest technology at their disposal. Though this might be a form of aggressive marketing, it showed indiscipline as the company approached someone other than the official contact person. This might lead to loss of customer trust and loss of credibility.
What should he have done differently?
1. First of all, Mr. Rob Allison should have had a clear understanding of the customer requirement rather than trying to push their new superior advanced technology. 2. Again he should have studied thoroughly about Boises competitors and their technology features. If at all its competitors was having an old technology then a good presentation should have been made stating the cons of using the old one and pros of the new one. A comprehensive comparative study between the two was absolutely necessary. 3. Also, Allison could have made a projected financial savings comparison between the two technologies and showcase how the new advanced technology could have saved a lot in the future for Northern Paper. If he could have convinced that the savings on account of advanced technology clearly outdid the premium price they are charging for it, then Boise had a good chance of booking the order. 4. Rather than making informal calls with the corporate office, Mr.Allison could have built a rapport with Mr. Jason Li and mill manager Mr.Muma and make them convince about the new technology. It is only they who can convince the entire Northern paper team. 5. Again, submitting a 100 page document was a blunder made by Mr.Allison in our opinion. People at Northern paper had very less time and it was evident that none of them would have gone through the entire document. Boise could have submitted a small document stating the benefits of their technology. 6. Regarding the ease of use issue among the operators, Boise could have requested Northern Paper to hold a training session free of cost for their workers at production line so that they can get hold of the new technology. This could have been a part of promotion for the new technology.