Japan was expected to be the third largest market for satellite imagery after the United States
and Europe. Imagery sales in Japan were estimated to be from $20 million to $30 million per
year. Although the principal user would be the Japanese government, for political reasons the
government had made it clear that they would be purchasing data through a local Japanese
company. One Japanese company, Higashi Trading Company (HTC), had provided most of
the imagery for civilian and military use to the Japanese government.
ISI had been negotiating with HTC for the past six months. It was no secret that HTC had
also been meeting with representatives from Lockart and Global Sciences. HTC had sent
several engineers to ISI to evaluate the satellite and its construction progress. Jim Willis believed that ISI was currently the front-runner in the quest to sign HTC to a $10 million annual
contract. Over five years, that one contract would represent one sixth of the contracts necessary to ensure sufficient venture capital to complete the satellite.
Jim was concerned that if a new launch date was announced, HTC would delay signing a
contract. Jim was equally concerned that if HTC learned that Jim and his team knew of the
camera design problems and knowingly withheld announcement of a new launch date until after completing negotiations, not only his personal reputation but that of ISI would be damaged.
Furthermore, as with any franchise arrangement, mutual trust was critical to the success of
each party. Jim was worried that even if only a 12-month delay in launch occurred, trust would
be broken between ISI and the Japanese.
Jim’s boss, Fred Ballard, had specifically told Jim that launch date information was company proprietary and that Jim was to use the existing published date when talking with clients.
Fred feared that if HTC became aware of the delay, they would begin negotiating with one of
ISI’s competitors, who in Fred’s opinion were not likely to meet their launch dates either. This
change in negotiation focus by the Japanese would then have ramifications with the venture
capitalists whom Fred had assured that a contract with the Japanese would soon be signed.
Jim knew that with the presentation date rapidly approaching, it was time to make a decision.