A Wall Street Journal article (28 July 2011) describes Boeing’s CEO McNerney defending Boeing’s plan to offer an upgraded design for the 737 versus an anticipated new design.   Many in the industry had anticipated a newly designed 737, and this announcement of a retrofit seemed a radical change in plans. Analysts worried that the design choice was a reaction to Airbus’s announcement of upgraded engines for the competing A 320.    How much of the design choice of firms should include a response to competitor choices ? Is it optimal for Boeing to follow Airbus or would sticking to its original design offer a more competitive alternative ? Was there a benefit to Airbus to announce its design and thus preempt a cost prohibitive design race ?