LAW531 All American Career College Negotiation Plan Problem Project About 4 pages. You need to choose one of the scenarios and prepare a negotiation plan.

LAW531 All American Career College Negotiation Plan Problem Project About 4 pages. You need to choose one of the scenarios and prepare a negotiation
plan. Use the attached template to do so (has an example) 8:02 PM (MDT)
Final Class Project ­ Prepare the Pre­Negotiation Plan
Assignment Overview
Go To:
Type: Individual Project
Unit: Default
Due Date: Thu,9/12/19
Grading Type: Numeric
Points Possible: 230
Points Earned:
Deliverable Length: See Syllabus
Assignment Details
Learning Materials
Reading Assignment
My Work:
Online Deliverables: Submissions
In­Class Deliverables: None
Assignment Details
Assignment Description
For your final project each student will prepare a negotiation plan based on one of the in­class negotiation role play activities. Each student will select one negotiation role
play and assume a role in the chosen role­play from the list posted in the student portal and prepare the negotiation plan.
Negotiation preparation builds on a solid fact base and ensures effective negotiation execution. Your task is to choose a situation that is of interest to you and lends itself to
preparing, performing, and analyzing the negotiation. This project will be done individually. You will prepare a negotiation plan that is due on September 12, 2019.
We have reviewed and discussed the traits of a highly effective negotiation planner ensuring his/her success. In contrast, the poor negotiation planner does not value planning and
does not take the time to plan. The primary purpose of a pre?negotiation plan is to ensure that we develop negotiation objectives that will lead to the purchasing of goods and services
at a fair and reasonable price. Each student will apply and document in the pre?negotiation plan, the analytical techniques that you plan to determine whether a proposed price is fair
and reasonable. We have learned that negotiators with high aspirations consistently outperform those with low aspirations. By adopting a high aspiration base, negotiators create
sufficient room to make and request the necessary concessions. Remember, prior to entering any type of negotiations, you must prepare! Prepare!! PREPARE!!!
Assignment Objectives
1.
2.
3.
4.
5.
Understand the Contract Negotiation Process map.
Distinguish between commercial and federal contract pricing proposals.
Explain the business ethic factors associated with contact negotiations.
Demonstrate contract negotiation tasks, techniques, and strategies.
Prepare a contract negotiation plan.
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Bolton Turbines Inc.
1.
I’ll Try
2.
I’ll Plan
3.
I’ll Raise the Bar
The Golden Rule
Negotiation Planning Template
1. CLARIFY Interests, Issues & Positions
Our Interests (Interests: The need, aspiration or fear that
motivates you.)
•
•
•
•
Sell compressor system/service contract
Desire to increase contracts/sales
Building a relationship (critical)
Promote state of the art equipment
Their Interests – If their motivation is identified early on, their issues will
be seen more clearly, and it will be easier to generate options to address
those issues.
•
•
•
Spend as little as possible while gaining maximum value
Highly competitive
BATNA tied to delivery/pricing/flexible
•
Collaborative approach to negotiations
2. PLAN the process
Who should go to the meeting? Who has decision making authority? Who will speak for each
side?
What will be discussed in order of priority? What is the agenda? What information will be shared?
What information will not be shared? When will we meet? When do we plan to finish (deadlines)?
Where will we meet?
How – Tone of meeting (Formal or Informal)
•
•
•
•
•
Our Issues (Issues: Something that should be included in the
final agreement.) What issues need to be resolved? (e.g. Price,
Delivery, etc.). Generate Options in advance.
•
•
•
•
Target price $2-3 million
3 year contract – $7.8 million
Target date December 2019
Might not want service contract – Explicitly state what
warranty does not cover
Their Issues: Anticipate needs as these may lead to issues.
•
•
•
•
•
•
Maximize pricing
Might need acc. Delivery
Might not need service contract. – Our fallback is reduced service
contract term.
Invoke warranty solely
Explicitly state what warranty does not cover
Negotiate F.O.B. – Preferred – Destination
•
•
•
Compressor bracket: [$3 million – $2 million]
Service contract bracket [3 year – $7.8 million]
Incentivize: 2 yr. – $6mm, 1 yr. – $3.5mm
•
Delivery date: Acc. 120 days – Full price on service min.
3 years, premium cost for compressor +20% above neg.
price.
•
Delivery Acc. 90 days – Full price on service min. 3 years,
premium cost for compressor +25% above neg. price.
Sales Rep., Procurement, Finance, Engineering.
Sales Rep. will take the lead, decision maker
Team
Order of discussion/agenda:
o
Compressor
o
Price
o
Service contract
o
Delivery
Information shared:
o
Specification/capability of the compressor
o
Value of service contract
o
$2.8mm/compressor sale price
o
2-3 compressor – $2.6mm – (+/- 5%)
o
4-6 compressor – $2.5mm – (+/-10%)
o
One year service contract: $4mm
o
Two years $6mm
o
Three years $7.8mm
o
Delivery – standard lead-time 8 weeks
?
6 weeks +20% above negotiated price
?
4 weeks +25% above negotiated price.
We will not share our cost to manufacture compressor.
We will not share intellectual property
We will not share our supply chain sources
We plan to finish our negotiations by Week 2 after negotiations start.
Tone of meeting: – Informal, Integrative, Maintain the relationship.
Our Position (Position: A Statement of what you want from the
other party.) Identify deal breakers. Identify option we can live
with though not necessarily our first choice.
Their Position: See beyond their position to identify underlying issues
which, if adequately addressed, may change their position.
Best Alternative to a Negotiated Agreement (BATNA) – It is important to calculate both parties
BATNA prior to beginning the negotiation and as circumstances change.
•
Increase compressor sales beyond just one system
•
Separate service contract 2-3 comp. – (-20%) 4-6
comp. (-25%) discount.
Compressor pricing; 2-3 5% discount, 4-6
compressor 10% discount.
•
•
Delivery options
Preferential pricing for first compressor and state of the art
equipment.
•
•
May not see a need for service contract
Reach their objectives on every issue.
Our Agreement: What is our next best
alternative?
•
Price – $2mm
•
Willing to accept 1 year service contract
•
Delivery – 4 weeks
•
•
Pricing < $2mm per compressor (deal breaker) • Service contract refusal of any kind (deal breaker) Their Agreement • • • Price - $3mm Require standard warranty as a minimum Meet their delivery drop dead date Worst Alternative to a Negotiated Agreement (WATNA) - This is a measure of the risk that you and the other negotiator bring to the process. What is the worst thing that can happen if we can't reach an agreement? • • • • Failure to sell compressor Limited Loss of R&D investment Loss of business relationship Damaged in-transit • • • • Failure to buy compressor Loss of potential increased productivity Loss of business relationship Potential loss of sole source Centre for Creative Negotiating: www.creativenegotiating.com Bolton Turbines Inc. 1. I’ll Try 2. I’ll Plan 3. I’ll Raise the Bar The Golden Rule Negotiation Plan Template 3. CREATE Options Be creative – Generate new options. Brainstorm creative options to satisfy interests and issues. 4. CHOOSE Issues/Options Viability Options/Issues we agree on: 5. IMPLEMENT the Agreement What is the agreement? Develop an Implementation Plan to address: - Who will do what - By When - How will it be done? Measures of Success: How will you know the negotiation was successful? (Identify key indicators to measure the performance/success of the negotiation.) Options/Issues we cannot agree on. Identify deal breakers, our concessions and issues we'll still keep negotiating for. Our Interests Their Resources Our Resources Their Interests Boltor Turbines Inc. 1. 2. 3. The Golden I’ll Try I’ll Plan I’ll Raise the Bar Rule Negotiation Planning Template 1. CLARIFY Interests, Issues & Positions Our Interests (Interests: The need, aspiration or fear that motivates you.) • • • • Sell compressor system/service contract Desire to increase contracts/sales Building a relationship (critical) Promote state of the art equipment Their Interests - If their motivation is identified early on, their issues w ill be seen more clearly, and it will be easier to generate options to address those issues. • Spend as little as possible while gaining maximum value • Highly competitive • • BATNA tied to delivery/pricing/flexible Collaborative approach to negotiations 2. PLAN the process Who should go to the meeting? Who has decision making authority? Who will speak for each side? What will be discussed in order of priority? What is the agenda? What information will be shared? What information will not be shared? When will we meet? When do we plan to finish (deadlines)? Where will we meet? How – Tone of meeting (Formal or Informal) • Sales Rep., Procurement, Finance, Engineering. • • Sales Rep. will take the lead, decision maker Team • Order of discussion/agenda: o Compressor o Price o Service contract o Delivery Information shared: o Specification/capability of the compressor o Value of service contract o $2.8mm/compressor sale price o 2-3 compressor – $2.6mm – (+/- 5%) o 4-6 compressor - $2.5mm – (+/-10%) o One year service contract: $4mm o Two years $6mm o Three years $7.8mm o Delivery – standard lead-time 8 weeks ? 6 weeks +20% above negotiated price ? 4 weeks +25% above negotiated price. We will not share our cost to manufacture compressor. We will not share intellectual property We will not share our supply chain sources • Our Issues (Issues: Something that should be included in the final agreement.) What issues need to be resolved? (e.g. Price, Delivery, etc.). Generate Options in advance. • Target price $2-3 million • • • 3 year contract - $7.8 million Target date December 2019 Might not want service contract – Explicitly state what warranty does not cover Their Issues: Anticipate needs as these may lead to issues. • • • • • • Maximize pricing Might need acc. Delivery Might not need service contract. – Our fallback is reduced service contract term. Invoke warranty solely Explicitly state what warranty does not cover Negotiate F.O.B. – Preferred - Destination • • • Compressor bracket: [$3 million - $2 million] Service contract bracket [3 year – $7.8 million] Incentivize: 2 yr. - $6mm, 1 yr. – $3.5mm • Delivery date: Acc. 120 days – Full price on service min. 3 years, premium cost for compressor +20% above neg. price. • Delivery Acc. 90 days – Full price on service min. 3 years, premium cost for compressor +25% above neg. price. We plan to finish our negotiations by Week 2 after negotiations start. Tone of meeting: - Informal, Integrative, Maintain the relationship. Our Position (Position: A Statement of what you want from the other party.) Identify deal breakers. Identify option we can live with though not necessarily our first choice. Their Position: See beyond their position to identify underlying issues which, if adequately addressed, may change their position. • • Increase compressor sales beyond just one system Separate service contract 2-3 comp. – (-20%) 4-6 comp. (-25%) discount. • • Delivery options Preferential pricing for first compressor and state of the art equipment. • Compressor pricing; 2-3 5% discount, 4-6 compressor 10% discount. Pricing < $2mm per compressor (deal breaker) Service contract refusal of any kind (deal breaker) • • May not see a need for service contract Reach their objectives on every issue. • • Best Alternative to a Negotiated Agreement (BATNA) - It is important to calculate both parties BATNA prior to beginning the negotiation and as circumstances change. Our Agreement: What is our next best alternative? • • • Their Agreement • Price - $2mm • Willing to accept 1 year service contract • Delivery – 4 weeks Price - $3mm Require standard warranty as a minimum Meet their delivery drop dead date Worst Alternative to a Negotiated Agreement (WATNA) - This is a measure of the risk that you and the other negotiator bring to the process. What is the worst thing that can happen if we can't reach an agreement? • • • • • • • • Failure to sell compressor Limited Loss of R&D investment Loss of business relationship Damaged in-transit Ce ntr e for Failure to buy compressor Loss of potential increased productivity Loss of business relationship Potential loss of sole source Cre a ti v e Ne got i a t i n g : ww w. c r e a t i v e n e g o t ia t i n g. c o m Boltor Turbines Inc. 1. 2. 3. The Golden I’ll Try I’ll Plan I’ll Raise the Bar Rule Negotiation Plan Template 3. CREATE Options 4. CHOOSE Issues/Options Be creative – Generate new options. Viability Brainstorm creative options to satisfy their interests and issues. • • • • Propose 1-10 Net 60 Propose 1-10 Net 45 Propose 1-10 Net 30 Net • Short Term Exclusivity H M L L Options/Issues we agree on: • • • • • Maverick needs our compressor Buy at least one compressor Agree on $2.5mm for one compressor Warranty null and void for self-repair Accelerated dely. – 120 days 5. IMPLEMENT the Agreement What is the agreement? Develop an Implementation Plan to address: - Who will do what - By When - How will it be done? 1. 2. 3. Price is critical. Delivery date(s) critical. Technical assistance to complete sale of service agreement. 4. Number of compressors sold over time critical to business relationship. Seeking common ground on a number of issues. 5. H 6. 7. Elevate sense of urgency to complete negotiations in two weeks or less. Implement agreement within 7 days of completion. a. b. c. d. Non-disclosure agreements Financial validation Ensure viability of delivery schedule Financial/project/delivery due diligence Measures of Success: How will you know the negotiation was successful? (Identify key indicators to measure the performance/success of the negotiation.) Options/Issues we cannot agree on. Identify 1. deal breakers, our concessions and issues we'll 2. still keep negotiating for. 3. • $3 compressor req. service contract. 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