Boise Automation

Background
Rob Allison had just lost $1.2 million
opportunity with Northern Paper Inc.,
a paper mill in Rocky Falls, Ontario.
This project was to intend, supply and
install an mechanical control system
for the Northerns wood chip
managing system.
Because of that, Rob began to analyze
the reason.

Automation Systems and the

Competitors
Automation system was an integrated system that
usually included a series of sensors, actuators and
controllers with programmed logic to automatically
control the equipment in the manufacturing process.
This industry has three competitors :
- Manufacturing solution providers who are automation
hardware producers who also does automation service
- Independent system integrators who are independent
on any manufacturer can provide this service with
their own resources
- Hardware suppliers from whom the hardware are to be
bought everytime

Boise Automation Canada

Boise was the Canadian arm of Boise Corporation
Inc., a multinational manufacturer of electrical
and electronic equipment, including automation
equipment, which conducted business in a wide
variety of industries around the world
The design team could conduct a preliminary
design that would be presented as part of the
companys proposal once the customers needs
and preferences were understood.
The sales team do face to face presentation,
which allowed the customer to ask question.

Northern Paper Inc. and The

Opportunity Lost
For more than four decades, Norther Paper Inc. is
a paper making company in Rocky Falls, Ontario.
In February, Rob was offered by Northern Inc.
whether Boise would be interested in bidding on
a new automation system for Northerns woodchip handling system
Seven months later, Boise had lost the order
after Boise had submitted a proposal that
included superior products at an extremely
competitive price.
What should he have done differently?

Informal Communication

Problem Recognition
The customer requirement was not
clearly understood by Boise. They
were 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.

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.

Factors
that might
contribute
to the loss
or the
order

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.

Customer Value
Assesment
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.

Problem Recognition
The customer requirement was not clearly
understood by Boise. They were 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.

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.

FACTORS THAT MIGHT CONTRIBUTE TO THE LOSS OF THE

ORDER
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.

Customer Value Assesment

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.

 Masukin alur sales process di exhibit

1

Our Group Recommendation

According to exhibit 2, Jason Li from Northern Inc., the
initial price offered by Boise ($1.35 million) was
approximately 30% more than the price offered by the
lowest priced. Assumming this, the lowest price offered
by competitor was $0.945 million. Since the initial price
offered by Boise was at a 2% premium, the cost price of
the automation system can be calculated as $1.08
million. So the Boise can lower its price to match the
lowest price offered by the competition with a loss only.
Rob should communicate with finance department and
convince them with the proposal.
To accelerate in decision making process, Rob should
identify who had more power in decision making