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.
Ill Try
2.
Ill Plan
3.
Ill 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.
Ill Try
2.
Ill Plan
3.
Ill 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
Ill Try
Ill Plan
Ill 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
Ill Try
Ill Plan
Ill 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.
Purchase answer to see full
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