Describe the Distributive Bargaining Situation and positions taken during a negotiation.
Refer to Chp.1 and 2, read the case and answer the following questions:
1. a) Describe the Distributive Bargaining Situation and positions taken during a negotiation.
b) Show these positions (opening offer, target point, resistance point (walk away point), alternatives, positive and negative bargaining range) taken during the negotiation of both parties in the case on the graph (Chp.2, pp.35-40; 51-58). (40%)
Describe the Distributive Bargaining Situation and positions taken during a negotiation
Refer to Chp.1 and 2, read the case and answer the following questions:
1. a) Describe the Distributive Bargaining Situation and positions taken during a negotiation.
b) Show these positions (opening offer, target point, resistance point (walk away point), alternatives, positive and negative bargaining range) taken during the negotiation of both parties in the case on the graph (Chp.2, pp.35-40; 51-58). (40%)
2. Demonstrate Negotiation Tactics that were used by parties to close the deal (Chp.2, pp. 64-65;
67-74). (30%)
3. Show the Levels of Conflict by explaining with the facts of the case for each level or type (Chp.1,
pp. 19-20). (30%)
Case Study
1. Company X trades dates in Kuwait and is one of the largest in the country. The research team sought an opportunity to sell dates in Germany to Latex ltd. The German company in the meantime was approaching two other companies in the Gulf and has collected some good offers for 110KD per ton. Company X send a team of three (Chief of Marketing, CFO and the son of the main Shareholder, Ahmed who acted as the representative of the company with authorization) to negotiate with Latex Ltd.
2. The latter (i.e. Latex Ltd.) was represented by CEO, CFO and a Legal Expert. Both parties had a lunch together and before the negotiation started, they spoke about football. Ahmed was supporting Borussia Dortmund where the CEO of Latex Ltd was a supporter of the main opponent of Borussia, Bayern Munich.
While having finished the first course the debate over the football got heated and Ahmed was pissed off (angered) with stunning position of the Latex Ltd but thought he will take his revenge during the price negotiation.
3. The Company X would consider a great deal if they would manage to sell dates for 110KD per ton, however, will not accept to sell it for less than 100KD. Company X was perplexed (confused) whether to make the offer first or wait. Ahmed suggested they better wait but Chief of Marketing disagreed and suggested they should start first. Ahmed was not happy with the idea of the Chief of Marketing and resisted, something that made the negotiation postpone d with 1 hour.
4. Being very nervous, Chief of Marketing had to decline the dinner with his wife that night after a 30 minutes debate with her in the phone.
5. As the team of Company X were discussing about negotiation strategies, an emergent information comes from the Headquarter that their offices were assaulted (attacked) by locals who had seized their plants in South Kuwait. These plants constituted 50% of the product of the company. The team had to consider this issue during the negotiation.
6. On the other hand, Latex ltd would have been happy to close a deal at 105KD per ton but more than 115
KD would be near impossible to continue the deal. So, they sought the opportunity to start first with an offer made by Chief of Marketing of 90KD per ton.
7. The team of Company X reacted swiftly and disagreed with such a poor offer attacking the Latex approach and considering almost unfair making such an irresponsible offer. Company X claimed the market price of its dates is around 150KD per ton and they were determined to sell them at around that price. If Latex Ltd. is a serious company, they should act responsibly and make reasonable offers. Company X says that it has sold the same quality dates in Italy for 130KD per ton and is not going to shift too far from this position. The company will ideally stay at this figure not for long as they have another negotiation for the same quantity in Europe after 3 days.
8. If this is the attitude of Latex ltd, the CFO of Company X warned that they better close the negotiation and leave immediately. The CEO of Latex enters and says that probably their Chief of Marketing went too far with the offer and according to him sometime people need to be more responsible.
9. The CEO continued that he will give another offer of 95KD. The CFO of Company X prompts a quick offer of 145KD and reminds Latex that still they are far from a reasonable deal. In return the team of Latex replies that they will still consider another offer if Company X bring dates in wooden boxes. If Company X will agree Latex will increase the offer to buy the dates for 100KD.
10. Company X says that they will give another offer of 120KD if Latex ltd which deals also with cars will sell to Company X new brand vans 20% less of the initial price. Latex Ltd insisted on 100KD while Company X remained at 120KD. Accepting the deal of the cars, Latex Ltd suggested a middle ground to close the deal at 110KD per ton and Company X finally agreed.
Describe the Distributive Bargaining Situation and positions taken during a negotiation
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