Negotiation Preparation Worksheet And Rubric Overview ✓ Solved
Negotiation Preparation Worksheet and Rubric Overview "People who know
Describe what you are trying to achieve through this negotiation, including the reason for wanting to change the current situation (the status quo).
Identify your goals for the negotiation, including what would constitute a successful outcome in your perspective.
Prioritize your key issues or interests by assigning their importance. Determine which issues are essential and must be secured for you to accept an agreement, which are important but negotiable, and which are secondary or can be traded or discarded.
Assess what the other side considers a good outcome and understand their interests and priorities. Rank the key issues for the other side from essential to trivial or secondary.
Explore areas of common ground where interests overlap, areas suitable for compromise, areas where favorable trades can be attempted, and issues that can be conceded or traded away.
Develop persuasive arguments to support your key issues using external standards, data, and industry benchmarks. Research industry standards for the product or service and pricing benchmarks, including recent deals by similar companies.
Determine your Best Alternative to a Negotiated Agreement (BATNA), which includes exploring your options if the negotiation fails and the other side's BATNA.
Identify your reservation value—the highest amount you are willing to pay, considering multiple issues, and the lowest price the seller is willing to accept.
Establish who has the authority to make the final decisions on your side and whether they will be present at the negotiation. Clarify the process for obtaining approval if necessary.
Identify the decision-maker on the other side, their authority, whether they will be present, and the process for approval if not.
Gather information about the other side, including their team, culture, goals, negotiation style, and relevant past negotiations or relationships.
If negotiations with this company are unsuccessful, identify other providers of similar products or services.
Sample Paper For Above instruction
Negotiation Preparation for Computer Purchase
In the context of upgrading office computers, my primary objective is to obtain the best possible deal on purchasing 30 computers within the allocated budget of $75,000. The overarching goal is to ensure technological advancement aligned with future system upgrades while maintaining cost-effectiveness. This negotiation aims to balance obtaining high-quality hardware with favorable financial terms, creating long-term value for the company.
My key issues include price, warranty terms, delivery timelines, and after-sales support. The price is essential; I need to ensure the cost per unit does not exceed the target of $2,500. Warranty and support terms are also crucial because they affect ongoing operational efficiency. Delivery timelines are important as the equipment needs to be in place before the upcoming system upgrades. Secondary issues include payment terms and financing options, which can be negotiated or traded for better pricing or support.
From the company's perspective, a good outcome for the seller would be securing a substantial order at or above their standard profit margin, with favorable terms regarding warranties and delivery schedules. Their key interests likely revolve around maximizing sales volume, ensuring customer satisfaction, and building repeat business.
Potential areas of common ground include shared interest in efficient, reliable hardware and timely installation. Areas for compromise could involve extending warranty periods in exchange for a slightly higher price. Favorable trade might involve accepting a higher upfront cost for extended support plans or quicker delivery.
Supporting arguments for my position include referencing industry standards indicating average pricing for comparable hardware. Market research shows similar companies paid approximately $2,400 per unit for comparable systems recently. Industry benchmarks from sources like Gartner or IDC suggest that vendors often offer discounts for bulk purchases, which supports my negotiation strategy.
My BATNA involves procuring computers from other local providers who have quoted prices close to my target, or using refurbished units if necessary. The other side’s BATNA might be sourcing customers elsewhere or adjusting their sales strategies if the deal falls through. I evaluate my options and determine that walking away is undesirable unless terms significantly deviate from my reservation value of $2,400 per unit.
My reservation price is set at $2,400 per computer, considering the total budget. For the seller, their reservation value might be slightly above their cost, roughly estimating around $2,200, allowing them some margin while ensuring this deal remains profitable.
The decision-making authority within my organization rests with the procurement manager, who will be present at the negotiation table or will require approval from senior management. The process involves initial approval for the negotiation scope, with final approval contingent on meeting predetermined terms and conditions.
Regarding the other side, the ABC Office Technologies sales representative will be the primary negotiator, supported by their sales manager if needed. Their organization is known for professional dealings with a focus on customer service. They aim for repeat business by providing quality products and support, which can be leveraged during negotiations.
If a deal cannot be reached with ABC, alternative suppliers such as Dell, HP, or local resellers offering comparable products and pricing will be considered. Developing relationships with multiple vendors ensures flexibility and leverage in negotiations.
References
- Gartner. (2023). Market trends for office technology procurement. Gartner Research.
- IDC. (2022). Enterprise hardware purchase benchmarks. IDC Reports.
- Watkins, M. (2003). Negotiation (Harvard Business Essentials Series). Harvard Business School Press.
- Better Business Bureau. (2023). Company profiles and ratings. BBB.org.
- Forrester. (2023). Business IT upgrade strategies. Forrester Research.
- TechRepublic. (2023). Negotiation strategies for procurement professionals. TechRepublic.com.
- Manufacturers' market data. (2023). Industry reports on PC hardware pricing.
- Robert Cialdini. (2009). Influence: Science and Practice. Allyn & Bacon.
- Harvard Business Review. (2022). Negotiation tactics for buyers and sellers. HBR.org.
- U.S. Bureau of Labor Statistics. (2023). Trends in business expenditure on technology. BLS.gov.