Iberia Airline Builds A BATNA
Iberia Airline builds a BATNA
Jacki DiSanto
Cleveland State University
Iberia wants to buy new jetliners. Enrique Dupuy is the chief financial officer and the man who led its search for wide body jets, meant form the start to run a real horse race. Dupuy is very competitive, his rule is “Whoever hits its target, win the order”. Boeing and Airbus are the two manufactures competing for Iberia to buy their jets. Toby Bright is Boeing’s top salesman for jets. John Leahy is a New York City native and the Airbus’s highest-ranking American, he pursues one goal: global domination over Boeing. The skill and professionalism of Dupuy allowed him to play the game to perfection. His main task is to strengthen BATNA (best alternative to a negotiated agreement). It had been a long time since Iberia had brought Boeing. He went to great lengths to bring Boeing into the bidding war including offering to fly 14 hours to Seattle. By bringing in the used Singapore Airlines 747s also helped Dupuy strategy. Bright’s odds were not in his favor from the beginning. With the crisis in the air-travel industry, Boeing had to take the chance to stem the tide. But Airbus was defending their turf. Bright did well on the creativity dimension by cutting its price by more than 10 percent after haggling over engine price with GE and financing with leasing firms. Leahy most likely cut prices too much. Iberia’s news release crowed about Airbus’s price guarantees on the planes, a detail Leahy considered confidential. Leahy should have included a confidentiality agreement regarding the price.
Airbus and Boeing are competing for market share through price cuts. In an unstable industrial market this guarantees major advantages in the bidding process. It would beneficial to both firms if they used a less aggressive price discounting. Each firm had different advantages. Airbus has a better investment return, could be easily integrated with their current planes, which saves money in the long run, and
Jacki DiSanto
Cleveland State University
Iberia wants to buy new jetliners. Enrique Dupuy is the chief financial officer and the man who led its search for wide body jets, meant form the start to run a real horse race. Dupuy is very competitive, his rule is “Whoever hits its target, win the order”. Boeing and Airbus are the two manufactures competing for Iberia to buy their jets. Toby Bright is Boeing’s top salesman for jets. John Leahy is a New York City native and the Airbus’s highest-ranking American, he pursues one goal: global domination over Boeing. The skill and professionalism of Dupuy allowed him to play the game to perfection. His main task is to strengthen BATNA (best alternative to a negotiated agreement). It had been a long time since Iberia had brought Boeing. He went to great lengths to bring Boeing into the bidding war including offering to fly 14 hours to Seattle. By bringing in the used Singapore Airlines 747s also helped Dupuy strategy. Bright’s odds were not in his favor from the beginning. With the crisis in the air-travel industry, Boeing had to take the chance to stem the tide. But Airbus was defending their turf. Bright did well on the creativity dimension by cutting its price by more than 10 percent after haggling over engine price with GE and financing with leasing firms. Leahy most likely cut prices too much. Iberia’s news release crowed about Airbus’s price guarantees on the planes, a detail Leahy considered confidential. Leahy should have included a confidentiality agreement regarding the price.
Airbus and Boeing are competing for market share through price cuts. In an unstable industrial market this guarantees major advantages in the bidding process. It would beneficial to both firms if they used a less aggressive price discounting. Each firm had different advantages. Airbus has a better investment return, could be easily integrated with their current planes, which saves money in the long run, and