Business Negotiation: Negotiation Strategy based on a Scenario.
Negotiation form part of our daily life, but in business, it is essential for one to achieve success. Nowadays, this term has found its use in many areas such as in television, newspapers, or on radio (Dietmeyer & Kaplan 2014, p. 5). Good skills of negotiation are important to ensure that one’s business is running smoothly. At the same time, the buyer should be good in negotiation to ensure. A learning the business does negotiate with various people in various situation of the business. Comprehending the negotiation attributes will help an individual to will help one in negotiating. However, it is important to understand that being a good negotiation is not an automatic guarantee that one will win in negotiation (Ehlich 2015, p. 5). It only means that one has reached a satisfactory conclusion for business if it is the case of the seller and self in case of a buyer (Kapoor 2015, p. 29). In our scenario, the main interest parties are the buyer (Mrs. Amelia Austin). I am Sean, her personal secretary and would be representing her in the negotiation in the process of purchasing Bentley car, a beautiful antique which is custom-made. Mr. Soles owes the car although the he hired sales agents to represent him in the sales negotiation process having set up some limits. The agent is given the full authority by Mr. Sole, to sell the vehicle. Mrs. Austin recently lost her domineering husband and she is not ready to be taken advantage when it comes to the price of the car. However, it is not possible to determine the unique car’s price.
Parties and their roles
Buying on behalf of Mrs. Austin
Sells on behalf of Mr. Soles
The relationship between the buyer and the seller is a short term since it involves the business and buying as well as selling. Besides, Mrs. Austin is in holiday and once the purchase is done, she will be back to her home.
To ensure the closure of the deal
The buyer’s need is the car while the seller needs to sell the vehicle. The beginning price of the buyer is 300,000 pounds, a price too high for the buyer whose starting price is 60,000 pounds. The main problem in the negotiation is on how to reach a consensus. During the process of negotiation, it is important to consider emotional tension and time. Negotiation is basically an exchange process that offers the highest probability of the satisfaction of the needs of the two parties. The skills of negotiation appear as the process of getting what one want or to ensure that one is winning over the other in the negotiation process. The heart to a firm negotiation entails adequate preparation, a perception, and comprehension of techniques including making durable and solid agreements. Given the negotiation value, planning for it is an essential part for the buyer. While it is important to plan in the performance of the negotiation process, it is essential to utilize negotiation tools. Among these tools include the following:
Goals and best alternatives: This part entails the establishment of the goals as well as why the goals need to be established and comprehending BATNA (best alternatives to a negotiated agreement). Such a move is essential in ensuring the development of the solution that is essential for the two parties. My need as to buy the vehicle at a price that was as low as possible. BATNA is an essential negotiation tool as it ensures leverage in the process of negotiation. With a strong BATNA, negotiation goals can be attained at a faster rate since failure by the seller to agree will allow the buyer to go for alternative. However, no alternative is available since only one vehicle is available. This is a deal of one time since Mrs. Austin is on vacation and will return home.
Pricing related tools include the following:
Reservation price: this entails the highest price to be paid by the buyer or the lowest price to be accepted by the buyer.
Stretch goal: the lowest price to be reasonable justified by the buyer as well as the highest price that the seller can justify. In our case, consensus was reached at 22,500 pounds.
The main need for this negotiation is to ensure that the deal has been reached to benefit the buyer and the seller. The first price suggested by the seller (300,000 pounds) was too high and I did not agree to it. No recourse was available for me since this only one vehicle was available. The main constrain encountered is ensuring that a fair deal has been struck between the seller and the buyer. Another constrain is the fact that both Mrs. Austin and myself have not been able to the car’s actual market value. The market of the antique car is seemingly an esoteric as well as complex field (Sperber 2009, p. 35). The price is dependent the vehicle’s running condition, the condition of its body, and the originality of its parts. The recent advertisement of this model of the vehicle indicated that the vehicle could fetch up to around $150,000 and as low as $8,000 and this again is dependent on the maintenance level. However, it is important to note that the actual price of this vehicle depends on how well the seller as well as the buyer is able strike the deal. When the seller as well as the buyer do negotiate, it is not common for the offer to be acceptable fully owing to the prevailing constrains. An offer sometimes usually fulfills the constrains of the buyer more or less.
The kind of the negotiation between the buyer and the seller in our case scenario can be termed as distributive negotiation. In our case, we are dealing with the purchase of a vehicle that has been in existence for a long time. Distributive negotiation occurs when two or more parties are making a claim of optimum sum for themselves (Goldman & Rojot 2012, p. 23). In our scenario, the seller (the agent) want to ensure that he is making the maximum profit, while on the other hand, I (the buyer) want to ensure that the purchase attracts the least amount. Distributive negotiation, also called “win-lose” or “claiming value” is a negotiation strategy, competitive in nature which is utilized to aid in decision making regarding the distribution of fixed resource, for instance cash (Wall 2015, p. 13). This form of negotiation is essential in that it some no other way is available to solve some business disputes. Distributive negotiation has a tendency of competitive interactions for various reasons. The main focus in this scenario is the gain by the individual. The use of this strategy is triggered by the fact that the interest of the two parties are on the opposite sides. In this case scenario, the interest of the buyer (me) and those of the seller (the agent) interests are not the same (Korobkin 2012, p. 47).
Poker face is a theory that can be utilized in negotiation regarding a buyer and a seller. The theory has several rules including the following.
By no means say “um”
Before one enters into business negotiation, it is important to comprehend several factors including the following:
The terms that one will not negotiate on
The nice terms that one intends to push on
The anticipate cost of the product
This translates to mean that one has to really think prior to the negotiation, it is important to think through what one intend to say before the negotiation begin. This entails the preparation and at the same time gaining confidence during the process of discussion.
Do not bring emotions into the negotiation table
When you enter into the negotiation, one is likely to be emotional for instance becoming nervous and not having confidence in one’s capacity to carry out the job. If you experience these feelings, it is important for you to relax and let these feelings to go. People usually experience strong feelings when it comes to negotiation. Getting emotional should not get into the negotiation even when things get hotter (Thoen 2016, p. 1).
The outcome of the negotiation satisfied me since I was able to utilize the tactics of negotiation to agree with the seller (agent) regarding the appropriate price that satisfied both of us. At the course of our negotiation, we were able to come to a common and our relationship kept on improving until we concluded the deal (Lewicki & Litterer 2015). My concerns as well as modifications were addressed during the process of negotiation. When I introduced the topic on the cost of freight as well shipping the vehicle, the seller was able to lower his stance on the cost. I was able to ensure that I am enhancing my purchase through the features of the product, adjustments of the price, as well as other benefits of the customer. Although a deal has been struck following the negotiation, it is important to ensure the finalization of the agreement soonest (Moal-Ulvoas, Harrington & Cox 2014, p. 20). Evaluation of the negotiation experience can be done through follow-up as well as through agreement evaluation. The performance of a negotiation is an outcome which is evaluated and the basis for this is the continuum of failure and success. Generally, in a negotiation that has attained success; the negotiator is able to obtain a great valued substance. Mutual settlements can me one of the measures to look at when looking at the evaluation. Other ways of evaluating the negotiation outcomes include the relationship status, overall satisfaction, as well as the commitment level (Harvard Business School 2011, p. 45).
Dietmeyer, B. J., & Kaplan, R. 2014. Strategic negotiation: a breakthrough process for effective business negotiation. Chicago, IL, Dearborn Trade. http://www.books24x7.com/marc.asp?bookid=9886.
Ehlich, K., & wagner, J. 2015. The discourse of business negotiation. Berlin, Mouton de Gruyter. http://site.ebrary.com/id/10598097.
Goldman, A. L., & Rojot, J. 2012. Negotiation: theory and practice. Hague, Kluwer Law International.
Harvard Business School. 2011. The Art of business negotiation. Boston, Harvard Business School Pub. Division
Kapoor, A. 2015. Planning for international business negotiation. Cambridge, Mass, Ballinger Pub. Co.
Korobkin, R. 2012. Negotiation theory and strategy. New York, Aspen Law & Business.
Lewicki, R. J., & Litterer, J. A. 2015. Negotiation. Homewood, Ill, R.D. Irwin.
Moal-Ulvoas, G., Harrington, D. G., & Cox, D. 2014. Business negotiation. Louvain-La-Neuve, De Boeck.
Sperber, P. 2009. The science of business negotiation. New York, Pilot Books.
Wall, J. A. 2015. Negotiation, theory and practice. Glenview, Ill, Scott, Foresman.
Thoen, L. (2016). Secrets of Client Negotiation: The poker Fce. Retrieved from https://blog.freelancersunion.org/2014/02/25/secrets-client-negotiation-poker-face/