Client: Gulfstream Aerospace

Description:

Founded in 1959 in Savannah, Georgia, by Alan Paulsen, Gulfstream Aerospace pioneered the age of corporate aviation by introducing the Gulfstream I – the world's first large-cabin, long-range, private, executive aircraft.

Under Paulsen's leadership, the company grew steadily for nearly three decades. In 1987, Mr. Paulsen sold the company to Chrysler Corporation – which at the time was under the direction of Lee Iacocca.

After the economic downturn of 1990, and the three tough subsequent years that followed, the company was at low ebb. In 1994, the New York equity firm Forstmann, Little & Company purchased the remaining $400 million worth of assets from Chrysler in a leveraged buy-out.

Situation:

From 1990 to 1993, Gulfstream - the American aircraft icon - had fallen into disrepair. Forstmann and his new management team were betting on a turn-around of epic proportions - a turn-around to be lead by a new, revolutionary aircraft - The Gulfstream V.

Competition in the ultra-long-range segment was coming in the form of the Global Express from aerospace giant Bombardier in Montreal. The race between the American icon and the Canadian juggernaut was on.

Strategy:

Although the miracle at Gulfstream had many moving parts, the following were the key initiatives that lead to the unbridled success of the Gulfstream V over its primary competitor, the Global Express.

“Position the Competition”

Forstmann immediately positioned the Global Express, in the press, as an “experimental” aircraft - a clean sheet design that had no track record.

Secondly, Forstmann immediately initiated a full blown “Buy American” campaign by advertising the Gulfstream V as an “American Revolution.”

“Target the Decision Makers”

“There is not a pilot on the planet who has ever bought a Gulfstream.”
– Teddy Forstmann

And so the culture of Gulfstream was forever changed from an engineering-driven organization – speaking mainly to pilots – to a sales and marketing organization – communicating directly to the top decision makers.

“Demonstrate Superiority & Claim Victory”

A rigorous flight test program was embarked upon in order to certify the aircraft early and beat the Global Express into service. Along the way, hundreds of world records were achieved for everything from speed, to climb rate, to distance.

And finally, the message was sent to Wall Street that Gulfstream had won the race. This communication strategy fueled the markets and fueled the frenzy for an initial public offering – the sixth largest of 1996.

Results:

• Tripled sales from $750 million to $2.4 billion
• Produced an aircraft sales backlog of $3 billion
• Increased company revenues nearly 400%
• Increased company profits approximately 300%
• Increased aircraft production 300%
• Increased aircraft deliveries more than 200%
• Primed Wall Street for the Gulfstream IPO (opened at $24)
• Increased value of company nearly 1000% in five years
• Built one of the most respected brands in the world