Too often in the composites industry, proposals end in a competitive “bake-off,” in which any number of manufacturers line up to work with a large customer, proposals in hand, ready to battle it out in a spec war, a features war or, in the worst case scenario, a price war.
In essence, most of the players – and maybe you, too – look almost identical, which is why these scenarios often end up hinging on price. You will likely feel pressure to lower your bid, and you may lose the business to competitors who are offering less value than you. These bake-offs create a tough position for both your company and your bottom line.
While many companies accept this as reality, it doesn’t have to be your reality, even if you work with large manufacturers who operate in a highly bid-driven RFP/RFQ environment.
Instead, it’s important to realize that, if you are competing in a bake-off, it’s usually because you’re coming in to your customer’s buying cycle too late. A buying cycle is the decision process your customers go through when hiring a vendor to solve a problem. It often looks something like this:
For example, your customer’s problem might be as simple as needing a central inlet cone for a jet engine (Step 2). They have decided they need to contract with a composites manufacturer to create it and that it should cost $1,180 per unit (Step 3).
If you were the manufacturer of this part, you would probably come in at Step 4, most likely by answering an RFQ/RFP, and you would be tasked with creating that part for $1,180 or less.