Based On The Below Scenario, You Are Now Considering An Addi

Based On The Below Scenario You Are Now Considering Additional Factor

Based on the below scenario, you are now considering additional factors needed for your proposal based on RFP #, dated 07/14/2014, where another local competitor intends to submit a proposal. Scenario: I have small floor refinishing business that provides a specialty-coating product for ceramic tile and marble floors. I’m ready to expand my business by competing for Navy contracts at the local base. I have received a Request for Proposal (RFP) #, dated 07/14/2014. I also find out through a reliable source that a local competitor has also received an RFP for a similar type of product and service. I’m now ready to begin considering the factors needed for your proposal based on RFP #, dated 07/14/2014. Remember that another local competitor intends to submit a proposal as well. Additional factors to consider are: Ten percent (10%) for commercial flooring jobs, you are willing to consider a lesser profit margin in this case in order to win the contract.

Write a two (2) page paper in which you:

1. Determine two (2) potential profit objectives that you will consider for accepting a less than normal profit margin if you win the contract. Provide a rationale for your response.

2. Determine two to three (2-3) negotiation strategies or tactics that you feel would be effective for winning the contract. Provide a rationale for your response.

3. Use at least three (3) quality references.

Note: Wikipedia and other related websites do not qualify as academic resources. Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format.

Check with your professor for any additional instructions.

Includes a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

Paper For Above instruction

The scenario presents a small business specializing in ceramic tile and marble floor refinishing, aiming to expand into Navy contract opportunities. Given the competitive environment, particularly with another local competitor vying for the same contract, strategic consideration of profit margins and negotiation tactics become crucial. This paper explores two potential profit objectives considering a lower profit margin, particularly in the context of a 10% focus on commercial flooring jobs, and discusses effective negotiation strategies that could secure the contract while maintaining the business's interests.

Profit Objectives in Pursuit of Competitive Advantage

The first profit objective centers around market penetration—accepting a minimal profit margin or even operating at a loss on the initial contract to establish a foothold within navy contracting opportunities. This approach aims to build reputation, secure future contracts, and increase overall business volume. By sacrificing short-term profit in favor of long-term market share, the business aligns with the concept of strategic pricing, emphasizing the importance of positioning itself favorably against competitors who may have more established relationships or larger economies of scale (Porter, 1985). For instance, offering a reduced profit margin on the commercial flooring jobs—possibly less than the typical 10%—can make the bid more attractive, especially considering the Navy’s penchant for competitive and cost-effective proposals.

The second profit objective pertains to building strategic relationships with the Navy and its contracting officials. Accepting a lower profit margin on this contract may serve as a gesture of goodwill, fostering trust and demonstrating commitment to quality and cost-efficiency. Such relational tactics can pave the way for repeat business and referrals, which are vital for small businesses aiming to expand their footprint in government contracting (Certo & Peter, 2012). Even if the profit margin decreases for the commercial flooring project, the long-term gain in reputation, future work, and potential for cross-selling additional services could offset initial earnings.

Negotiation Strategies for Winning the Contract

One effective negotiation tactic involves value-based bargaining, where emphasis is placed on the quality, reliability, and added value of the service rather than solely on pricing. The business can highlight its specialization in high-quality coatings for ceramic and marble floors, emphasizing its superior craftsmanship and on-time delivery. Positioning the company as a strategic partner that offers stability and expertise can differentiate it from competitors focused solely on price (Fisher & Ury, 1981). This approach appeals to the Navy’s contract administration officers who value consistent quality and dependability.

Another tactical approach involves building strategic alliances with local subcontractors or suppliers to reduce costs without compromising quality. By leveraging local relationships and streamlining operations, the company can offer competitive bids while maintaining acceptable profit margins. Additionally, demonstrating flexibility in negotiations around contract terms, project timelines, or payment schedules can create mutually beneficial arrangements. This flexibility signals cooperation, which can influence the Navy’s decision-makers to prioritize the proposal (Shell, 2006).

A third tactic includes leveraging small business certification advantages—if applicable—by emphasizing certifications that may afford the business certain procurement preferences or set-aside advantages within the Navy’s contracting framework. Such strategic positioning can bolster the business’s credibility and make its proposal more appealing despite offering a lower profit margin (U.S. Small Business Administration, 2020).

Conclusion

Strategic considerations around profit margins and negotiation tactics are critical for small businesses competing in secured government markets. Accepting a lesser profit margin on specific contracts, particularly those involving commercial flooring, can position a firm favorably against competitors. Simultaneously, employing well-chosen negotiation strategies—focusing on value, forging alliances, and leveraging certifications—can enhance the likelihood of winning the contract. Ultimately, a balance of strategic pricing and effective negotiation can enable a small business to grow and establish a sustainable presence within Navy contracting opportunities.

References

• Certo, S., & Peter, J. P. (2012). Strategic Management: Concepts and Cases: Competitiveness and Globalization. Pearson.
• Fisher, R., & Ury, W. (1981). Getting to Yes: Negotiating Agreement Without Giving In. Penguin Books.
• Porter, M. E. (1985). Competitive Advantage. Free Press.
• Shell, G. R. (2006). Bargaining for Advantage: Negotiation Strategies for Reasonable People. Penguin.
• U.S. Small Business Administration. (2020). Small Business Procurement Strategies. https://www.sba.gov
• Other scholarly sources to support the points include articles on government contracting strategies, competitive pricing, and small business management (add further reputable references accordingly).