El Teck Magnetic Advacnes Planning Document

March 25, 2018 | Author: Stephanie Ng | Category: Negotiation, Competition, Profit (Economics), Option (Finance), Business Economics



Negotiation Planning Form1 (Reminder: you can expand the box size when you need to write more) I. The Problem Problem Statement: I must negotiate with (person) to (solve what problem). As Sal Granger, President of Magnetic Advances, I am negotiating with Audio Components to obtain rights to Z-25. I believe that Magnetic Advances can take advantage of the commercial opportunities associated with Z-25. 0. II. Goals and Decision Makers My specific, High Expectation: My high expectation would be Choice 2) on the list: Magnetics produces Z-25 and no limitations are put on its distribution ($140M-TP). My second choice would be Choice 3) Magnets produces Z-25 and is prohibited from selling to Audio’s direct competitor for 6 months ($130M-TP). Target decision-maker: I aim to persuade Audio Components to give me the rights to Z-25 and agree upon terms that will allow Magnetic Advances to gain external and internal profits. BATNA: Any cash payment that I have to make to Audio Components would set my BATNA. Also, for every $100 dollars of Z-25 I supply for free, I will have to subtract $100 from my profits. My BATNA will be choice 5) from the table: Magnetics produces Z-25 and is prohibited from selling to Audio’s direct competitors fro 12 months ($120M-TP). I am not willing to give up anymore time and profits and prevent from selling to Audio’s competitors. I will also have to be giving a transfer payment to Audio Components in order for them to release the product to me. Influencers (Should I negotiate with these people first?) I can potentially negotiate with my analysts once again. 1 From Shell, Bargaining for Advantage 0. what will they lose? They will lose the possibility of Magnetic Advances making good use of Z-25. Magnetics will not have to provide transfer payments to Audio and also risk losing partial profits to Audio due to the period of not selling to Audio’s competitors. Also. if there is no deal. Audio Components would probably want to recoup its development costs of about $12 million and get a reasonable profit by making Z-25 for sale to other divisions in El-Tek. I also do not want the decision concerning the future marketing of Z-25 to be made by top management. V. the transfer prices. Can I influence their alternatives or make their status quo worse? I can influence their alternatives by negotiating the period of time that I can’t sell to competitors. only Magnetics can exploit the commercial opportunities associated with Z-25. If Magnetic advances is selling Z-25 on the open market. However. I will lose the potential profits. By not agreeing to a deal. Possible Proposals . 0. I believe that the Z-25 will help Magnetic’s profits. III. Leverage What do I lose if there is no deal? I lose the rights to Z-25 and the possible profits. and additional costs. Audio components’ direct competitors could buy it and the division will lose its competitive advantage. Underlying Needs and Interests (Shared/Ancillary/Conflicting) Mine I believe that since Magnetic has the exclusive charter to sell magnets external. Theirs Audio Components does not want transfer the Z-25 technology to us. business. If no deal. IV. Please provide your reasoning here: Since Z-25 has a lot of commercial opportunities. and corporate image tremendously. What steps or alternatives will reduce these losses? I can accommodate to the needs to Audio Components and not sell to Audio’s direct competitors during a specific timeframe. Leverage Favors: □ Me □ Other Party □ About Even (Who has the most to lose overall from “no deal”?) I have the most overall to lose from “no deal”. I am willing to accommodate to Audio Component’s needs to a certain extent in terms of preventing sales to Audio’s competitors. compromising. VIII. Magnetic Advances will be able to return a financial favor. 0. VII. 0. and competitive in this situation. Situation as they see it: expected strategy: __x_ Transaction Competitive ___ Relationship solving ___ Balanced Concerns Compromise ___ Tacit Coordination Accommodating Their __x_ ___ Problem ___ ___ Avoiding ___ . Audio has the rights to Z25 so they can make the ultimate decision. Authoritative Standards and Norms Mine Theirs My Counter Arguments I am trying to negotiate for the rights of Z-25 in return of accommodating to Audio’s needs. Situation and Strategy Analysis Situation as I see it: __x_ Transaction My basic style is Avoidance _x__ Relationship ___ Balanced Concerns so I need to be more accommodating.Third Party Moves Can I use a third party as leverage? As an excuse? As an audience? Coalition partner? 0.Options: Build on Shared Interests/Bridge Conflicting Interests/Be Creative Since I am very interested in the Z-25. VI. I would also view this as a potential professional relationship. If Audio were to grant me the rights today. X. 0. Best Modes of Communication ___ Agent ___ Teleconference __x_ Face to face Messaging ___ E-mail ___ Telephone ___ Instant Please provide your reasoning here: Face to Face communication would be best in order to really sell my reasonings and intentions to Audio for granting the rights of H-25 to Magnetics. Although I am trying to negotiate a difficult deal with Audio Components that if receiving the rights to Z-25 will boost my profits. I need to negotiate politely and fairly in order to persuade Audio Components. 0. Overall Positioning Theme A short statement that sums up your underlying purpose in this negotiation: Magnetic Advances will be able to market Z-25 commercially effectively and can possibly benefit Audio Components in the future. IX. I can directly discuss the financials as well as the costs/benefits that each party will have to consider. 0. I will be able to provide Audio with aid in a future transaction. . Since we are divisions within the same firm/industry. Through face to face interaction. both parties will be able to discuss the terms and concerns directly and clearly.Please provide your reasoning here: I see this as a transaction and relationship.
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