Engineering Price Wars - The Cost of a Competitive Behaviour

One industry where Price Wars are prolific is of course the aviation and airline industry. There are historic conflicts which come and go for no one particular reason apart from for business sake. Virgin was driven almost to the brink and beyond during the 90's when British Airways went to war with Richard Branson's new airline start-up, Virgin Atlantic. Since then there have been many more spats, and a noteworthy one was again between BA and Virgin in 2009, which benefited no one, apart from their passengers.

Price wars are defined by a vicious reduction in prices in order to secure more business than their competitors.

So, an unsustainable price war is waged for a short period of time, for the purposes of enticing new customers, or ruining your competitors business altogether.

I think we all understand this. Or do we?


During my life as an engineer, I have beared witness to many conversations between directors, and partners of engineering firms, when they have complained that 'one-man-band' prices have meant that they are forced to reduce there fees accordingly, in order to compete. "It's a cut throat business", really?

Reducing our services to a fee alone is the road to rack and ruin. It will also have a rather nasty affect on our image and respect as engineers too.

It is not the fault of one-man-band engineers who have only themselves to think about when they calculate their hourly rate. They too have to market themselves. A kitchen table engineer will not have tens of thousands of pounds to advertise and raise awareness of their brand. They are intelligently leveraging their networks and relying upon past connections to land a weekly project or two.

This is a matter of optimisation. The solitary figure of an engineer will be able to optimise the way in which they spend their time on smaller projects, which then shows up in their fee quote. You cannot fault this fact, it is a simple calculation.

Being bitter about the reality of the situation is not becoming. Engineers must imagine new ways to compete by providing additional value for their clients, understanding their businesses, thinking about their future relationships, mentoring staff to speak English and not Engineerish. These are all positive and proactive measures which can help us secure a loyal client base.

We do not have the god given right to land every single piece of work that comes our way. Our methods, quality and speed of deliveries will vary. Be thankful for what we do have; and if you need more work... then work harder on the message we send to the public and our clients.

Finally, should you find yourselves competing against an engineering company who can deliver a similar product, but with less fuss, in less time and for a smaller fee. Don't complain and blame short cuts in their service. Take a longer look at what they do, and how they do it.

It might be that these 'cheaper' service providers are just really passionate about what they do and have found ways to optimise their process - which you haven't cottoned onto yet....

Price Wars in engineering? I think not. Sheer entrepreneurial laziness if you ask me.


Engine[er]