Negotiations presentation

8/18/2019 Negotiations presentation

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Leader :Mr. IMRAN

Team:OBAID KHANARIF QAMARSYED FAHD HUSSAINFAHEEM ABBASISHARIQ

)GHULAM MUSTAFA(


2/26

GOTIATIO


3/26

NEGOTIATION

Or g a ni z a t i ons na t ur a l l y s e e ks t o ob t a i n t he ma xi mumv a l ue f or i t s i nv e s t me nt i n g oods a nd

s e r v i c e s a nd s e e k t o g a i n t he hi gh e s t

po s s i bl e be ne t f r oma l l of t he i r bus i ne s s t r a ns a c t i on s s o bo t h pa r t i e s ge ne r a l l y c ome t og e t he r t o r e c on c i l e t he i r di e r i ng

.po s i t i ons Thi s pr oc e s s i s r e f e r r e d t o a snegotiations .

, ,Ne g ot i a t i on t he r e f or e r e qu i r e s muc h , ,a ddi t i on a l pl a nn i ng r e s e a r c h a nd mos t

,i mpo r t a n t l y pr e c i s e e xe c ut i on i n or de r t o a c hi e v e a s uc c e s s f ul ou t come a nd me e t y ou r


4/26

ASSESSING THE NEGOTIATING

ENVIRONMENT

I t i s i mpo r t a nt t ha t you r s t a s s e s s t he c ur r e nt .s i t ua t i on pr i or t o c on du c t i ng a c t ua l ne g ot i a t i on s

a r ke t c on di t i ons g e ne r a l l y r e f e r t o c i r c ums t a nc e s s uc h a s t he a v a i l a bi l i t y of s up pl y i n r e l a t i on t o a c t ua l de ma nd or t he nu mbe r of s up pl i e r s i n t he

ma r ke t pl a c e a v a i l a bl e t o c r e a t e a c ompe t i t i ve .s i t ua t i on e t c

,I n a dd i t i on i t i s i mpo r t a nt f or y ou t o a s s e s s t he . ,r e l a t i ons hi p you ha v e !i t h t he s uppl i e r Of t en t hi s

c a n de t e r mi ne t he a t mos ph e r e du r i ng t he ne g ot i a t i on a nd ha ve a n i mpor t an t i mpa c t on ho!yo u a nd yo ur t e a m

.de ve l op yo ur ne got i at i on s t r a t eg y


5/26

THE COMPETITIVE ENVIRONMENT

"he n t he c ompe t i t i v e e nv i r onme nt i s l i mi t e d by t he l a c k of qua l i e d s upp l i e r s or by

,i nt e l l e c t ua l pr op e r t y r i g ht s c ompe t i t i v e

.bi dd i ng i s un l i ke l y

#e e p i n mi nd t ha t t he r e c a n be no bi ddi n g i f on l y on e s up pl i e r c a n me e t y ou r

.r e qui r e me nt s


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NATURE OF COMPETITION

$ompe t i t i on i s a v a i l a bl e i n v i r t ua l l y a l l .ma r ke t s f or g oo ds a nd s e r v i c e s "ha t y ou ha v e

.t o a s s e s s i s t he na t ur e of t ha t c ompe t i t i on

%i ghe r c ompe t i t i on g e ne r a l l y r e s u l t s i n l o!e r pr i c e s a nd a g r e a t e r !i l l i ng ne s s by

.s up pl i e r s t o pr ov i de a dd i t i ona l s e r v i c e s


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ompetition c n be ev lu ted f om numbe of

e spectives

a) Numbe r of qua l i e d or e & c i e nt t o qua l i f y

.s uppl i e r s i n t he ma r ke tb) .I mpa c t of t he bu y e r

c) (a r r i e r s t o e n t r y f or t he pa r t i c u l a r p r odu c t .or s e r v i c e

d) .$a pa c i t ye) .)omi na nt br a nd

f ) .*ol e of ma r ke t f or c e s

) .+bi l i t y t o s ubs t i t u t e


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,r omt he po i nt of v i e !of pr oc ur e me nt,f unc t i on s upp l y a nd de ma nd a r e t !o of t he mos t

,i mpo r t a nt ma r ke t f or c e f a c t or s a nd y ou ne e d

,t o pa y a t t en t i on t o t he mv e r y c l o s e l y t he r a t i o of s up pl y a nd de ma nd c on t i nua l l y mov e s ,hi gh e r a nd l o!e r !i t h - uc t ua t i ng pr i c e s

.r e - e c t i ng a ny i mba l a nc e

.upp l y s ho r t a g e s c a n a l s o r e s u l t f r oma n un e xp e c t e d i nc r e a s e i n de ma nd or s ome

phy s i c a l s i t ua t i on s uc h a s a pl a nt s hu t do!n .t ha t s e v e r e l y l i mi t s pr odu c t i on


9/26

EARLY INVOLVEMENT

'The g r e a t e r t he s up pl i e r s c e r t a i nt y t ha t i t ,!i l l r e c e i ve t he or de r t he l e s s l i ke l y i t .!i l l be t o e ng a g e i n s e r i ou s ne g ot i a t i ons

/a r l y i nv ol v e me nt i s e s s e nt i a l t o a v oi d i ng be i ng l oc ke d i nt o a s i ng l e s ou r c e

pr e ma t ur e l y !i t ho ut s u& c i e nt

ne g ot i a t i ng l e v e r a g e t o i n- ue nc e c r i t i c a l t e r ms of t he c ont r a c t


10/26

GATHERING INFORMATION AND

ANALYSIS

, , .I nf or ma t i on a s t he y s a y i s po !e r %a v i ng t he r i gh t i nf or ma t i on a v a i l a bl e !he n ne e de d i s a l !a y s

c r i t i c a l t o a s uc c e s s f ul a ppr oa c h t o s t r a t e g y.f or mul a t i on I t i s i mpo r t an t t o kn o!a t l e a s t a s

muc h a bo ut t he c on di t i on s t ha t ma y i n- ue nc e t he . ,ne g ot i a t i on of t he s upp l i e r (y be i ng i nf or me d

y ou r t e a m!i l l be a bl e t o de v e l op r e a l i s t i c a nd !or ka bl e s t r a t e g i e s a nd a v oi d t he e mba r r a s s me nt

.of e s t abl i s hi ng un r e a c ha bl e g oa l s

/a c h t e a mme mbe r s ho ul d be r e s po ns i bl e f o r g a t he r i ng a por t i on of t he i nf or ma t i on t ha t i s

n e e d e d


11/26

ANALYZING THE SUPPLIER'S

SITUATION

,I n g a t he r i ng i nf or ma t i on y ou mi ght r s t !a nt t o c ons i de r l ooki ng a t t he s i t ua t i on ' :f r omt he s upp l i e r s po i nt of v i e !

a) "ha t mot i va t e s t he i r pos i t i on

b) ?!ha t a r e t he y l i ke l y t o v a l u e t he mos t

c) ,$onv e r s e l y !ha t c on c e s s i ons mi gh t t he y be

?!i l l i n g t o ma ke t o a c hi e v e t he i r g oa l s


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EXISTING RELATIONS

,0r i or t o ne g ot i a t i on s y ou r t e a ms ho ul d c ompl e t e l y a na l yz e t he mot i va t i on a l

f a c t or s t ha t !i l l l i ke l y dr i ve c onc e s s i on s

.t o y ou .ome of t he que s t i ons you mi ght !a nt :t o a s k i n t hi s r e g a r d i nc l ude

a) %o!muc h do e s a s upp l i e r v a l ue t he s t a t us of i t s e x i s t i ng r e l a t i ons hi p !i t h y our

? ?or g a ni z a t i on +r e y ou a r e f e r e nc e a c c ou ntb) %o!do e s your bus i ne s s i mpa c t t he

' ?s upp l i e r s bo t t oml i ne

c) %o!do e s your v ol ume a e c t i t s po s i t i on i n

?t he ma r ke t pl a c e


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a) )oe s y our o r g a ni z a t i on r e qu i r e mor e or l e s s ?c us t ome r s e r v i c e t ha n ot he r s

b) +r e y ou r bus i ne s s ne e ds r e l a t i ve l y e a s y t o

?f or e c a s tc) ?+r e y our v ol ume s c ons i s t e n t ov e r t i me

d) )o y ou pa y y ou r i nv oi c e s i n a n a c c e pt a bl e ?t i me f r a me

e) +r e y ou r or g a ni z a t i on s e ng a g e d i n j oi nt ?pr odu c t de v e l opme nt


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ANALYZING YOUR

ORGANIZATION'S POSITION

1ou !i l l l i ke l y kn o!a g r e a t de a l mor e a bo ut yo ur or ga ni z a t i on a nd i t s s pe c i c ne e ds t ha n

,y ou !i l l a bout you r s up pl i e r 2 s s o t he e xe r c i s e of g a t he r i ng a nd a na l yz i ng y ou r o!n pos i t i on

!i l l e nc our a g e you r t e a mt o mor e c l e a r l y i de n t i f y a r e a s !he r e c onc e s s i ons ma y be

r e qu i r e d

Thi s e xe r c i s e s hou l d - a g t hos e c on c e r ns f or 'f ur t he r r e s e a r c h i nt o t he s up pl i e r s s i t ua t i on

s o t ha t you e nt e r t he ne g ot i a t i on !i t h a t l e a s t s ome unde r s t a ndi ng of i t s l i ke l y po s i t i on


15/26

URGENCY

"he n doe s you r or g a ni z a t i on ne e d t he pr oduc t ?or s e r v i ce you !i l l be ne g ot i a t i ng ,I f i t i s ne e de d ur g e nt l y you ma y !a nt t o

pr e pa r e t o ne go t i a t e a c c e l e r a t ed de l i ve r y by t r a di ng c onc e s s i ons i n ot he r a r e a s s uc h a s .pr i c e or t r a ns por t a t i on me t ho ds

,On t he o t he r ha nd i f t he r e qu i r e me nt c a n be me t ,ov e r a pe r i od of t i me a l l o!i ng t he s uppl i e r t o

f ul l l i t !he n t i me a nd r e s ou r c e s a r e no t ,be i ng ot he r !i s e us e d t hi s mi g ht pr ov e a us e f u l

.c onc e s s i on t o a c hi e ve be t t e r pr i c e s


16/26

SELECTION CRITERIA

,,i r s t t he r e a r e t ec hn i c a l i s s ue s t ha t !i l l a r i s e du r i ng t he c ou r s e of di s c us s i on s t ha t on l y

.s t a ke ho l de r s !i l l be qua l i e d t o a ns !e r

, ,.e c on d a s t he us e r s t he y a r e i n t he be s t po s i t i on t o un de r s t a nd t he i mpo r t a nc e of t he v a r i ou s e l e me nt s of t he o e r a nd s o c a n de t e r mi ne !he n

s pe c i c a t i ons ca n be r e l a xe d a s !e l l a s t he - .va l ue of c e r t a i n t r a de o s

,+nd l a s t l y t he us e r s a r e t he s uc c e s s or s of t he ne got i a t e d ba r g a i n3t he g r ou p t ha t mus t l i v e !i t h

t he r e s u l t i n g c ondi t i ons 3a nd t he y !i l l i nhe r i t , .no t on l y t he !i ns but t he l os s e s a s !e l l


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OBJECTIVES

"he n y our s upp l i e r s e l e c t i on t e a m e s t a bl i s he d i t s i ni t i a l r e qu i r e me nt s a nd

be g a n t he pr oc e s s o f de t e r mi n i ng t he mos t ,qua l i e d s uppl i e r i t a l s o de ve l ope d a s e t

.of e xpe c t a t i ons The s e e xpe c t a t i ons !e r e ' .ba s e d on you r or ga ni z a t i on s nee ds

"ha t ev e r ne e ds a r e no t f ul l y s a t i s e d i n t he

' ,s up pl i e r s r e s po ns e e v e n !he n t ha t r e s po ns e ,i s t he be s t on e r e c e i v e d !i l l ne e d t o be

.f ur t he r ne g ot i a t e d 1ou !i l l l i ke l y ha v e pe r f or me d a g a p a na l y s i s pr i or t o

,c on s t r uc t i ng y ou r ne g ot i a t i ng pl a n s o y ou


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PRICE

The f oc a l po i nt of a ny ne g ot i a t i on i s us ua l l y.pr i c e The s e l l e r !i s he s t o r e a s on a bl y

ma xi mi z e pr o t a nd t he bu y e r !i s he s t o .obt a i n t he be s t pos s i bl e pr i c e I n mos t

,c a s e s t he i de a l po s i t i on f or b ot h i s a f a i r . ,a nd r e a s on a bl e pr i c e ,or t he mos t p a r t t he be s t !a y t o de t e r mi ne a f a i r a nd r e a s ona bl e

pr i c e i s t hr oug h t he c ur r e nt pr i c i ng i n a n , .ope n ma r ke t s uc h a s a c ommod i t i e s e xc ha ng e

,On a n e xc ha ng e c ommod i t y pr i c e s - uc t ua t e ,ope nl y i n r e s po ns e t o s upp l y a nd de ma nd s o

t he t r a di ng pr i c e a t a ny g i ve n t i me r e - e c t s t he c ur r e n t pr i c e a buy e r i s !i l l i ng t o pa y


19/26

QUALITY

,+s ne g ot i a t i on s pr og r e s s y ou !i l l l i ke l y nd t ha t i nc r e a s e d qua l i t y s pe c i c a t i ons

r e s ul t i n hi ghe r pr i c e s a nd t ha t r e l a xi ng

s ome of t he non c r i t i c a l s pe c i c a t i ons ma y .r e s u l t i n l o!e r p r i c e s

#no !i ng !he r e s pe c i c a t i on s a nd t ol e r a nc e s c a n be r e l a xe d a nd !he r e t he y c a nnot ne e ds t o

be de t e r mi ne d l a r g e l y i n a dv a nc e a nd s ho ul d .be i nc l ude d i n t he ne g ot i a t i on pl a n


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CAPACITY/VOLUME

"he ne v e r t he po t e n t i a l f or l i mi t a t i ons i n a's up pl i e r s pr od uc t i on or s e r v i c e l e v e l s e x i s t a s a

r e s ul t of f or e c a s t e d c ha ng e s i n ma r ke tc on di t i on s

)ur i ng pe r i ods of c on s t r a i ne d c a pa c i t y a nd s ho r t a ge s !he n s up pl i er s c a nn ot ke e p up !i t h

,de ma nd y ou !i l l !a nt t o e ns ur e t ha t your

or g a ni z a t i on ha s t he pr ot e c t i on i t n e e ds by l oc ki ng i n s pe c i c c ommi t me nt s f r omt he

s up pl i e r f o r c e r t a i n a mou nt s of i t s c a pa c i t y or .s pe c i c vo l ume s ba s e d on yo ur a nt i c i pa t e d ne e ds


21/26

CONDUCTING THE NEGOTIATION

,"he n i t i s t i me t o a c t ua l l y c ondu c t t he ne g ot i a t i on .y ou !i l l e mpl oy a my r i a d of t e c hn i que s a nd t a c t i c s

I mpl e me nt i ng y our s t r a t e g y e s s e n t i a l l y a mount s t o ho!yo u a ppr oa c h t he ne go t i a t i ons 3 c oo pe r a t i v e l y i n a -win win -mode or !i n l o s e i n a n

a dv e r s a r i a l mod e

-"i n !i n mod e s t e nd t o e nc ou r a g e c ol l a bo r a t i on i n . -t he ne g ot i a t i on pr oc e s s "i n l os e s t r a t eg i e s t e nd

t o r e l y on po!e r t o c on t r ol t he ne g ot i a t i on.pr oc e s s


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TACTICS

:%e r e a r e a f e !of t h e mor e c ommon t a c t i c s

a) ,4e ne r a l l y mor e c a n be ga i ne d by l i s t e ni n g t ha n . ,by t a l ki ng +c c or di ng l y t a ke c opi ous not es a nd

.r e v i e !t he mf r e qu e nt l y

b) 5ue s t i on ho!y our s t a t e me nt s !i l l a l i g n !i t h y ou r o bj e c t i ve s 3pr on ou nc e me nt s c a n be

.po i nt l e s s or e v e n c ou nt e r pr oduc t i v e

c) .+vo i d a c c e pt i ng t he r s t o e r

d) ,+l !a ys a s k qu e s t i ons e s pe c i a l l y !he n t he r e i s .us e f u l i nf or ma t i on t o be l e a r ne d

e) )o no t ma ke c onc e s s i on s !i t hout r e c e i v i ng .e qua l c on s i de r a t i on Thi s doe s not ne c e s s a r i l y

me a n t ha t e a c h a nd e ve r y c onc e s s i on ne e d r e s u l t .i n s ome c ons i de r a t i on 6but do ke e p t r a c k


23/26

a) ;+t t e nd t o de a dl i ne s e s t ab l i s h t hems pa r i ngl y a nd on l y .!he n ne c e s s a r y

b) .#e e p yo ur !i t s ab ou t yo u a nd a vo i d r e a c t i ng e mot i on a l l y

c) .I s s ue s ne e d t o be pr i or i t i z e d "he n r e a c hi n g a n i mpa s s e

, .on on e pa r k i t f or a !hi l e a nd g o on t o t he ne xtd) .Ta ke br e a ks !he ne v e r yo u f e e l t he ne e d )o no t a t t e mpt t o

. ght f a t i gue

e) , .*e f r a i n f r ombl u& ng a nd us e on l y da t a you c a n pr ov e I ma g i ne t he emba r r a s s me nt a nd l o s s o f f a c e t ha t c ou l d

.r e s ul t i n be i ng di s c ov e r e df ) .7a s t a nd na l o e r s s houl d me a n e xa c t l y !ha t t he y s a y

) 8nd e r s t a nd a nd us e bo dy l a ng ua g e a s a c ommun i c a t i on t oo l .f or your a dva nt a ge


24/26

SUMMARY

$on du c t i ng s uc c e s s f ul ne g ot i a t i on s r e qu i r e s c a r e f ul .pl anni ng a nd or ga ni za t i on

+s s e s s i ng t he ne g ot i a t i ng e nv i r on me nt i nc l ude s de ve l opi ng a n e va l ua t i on of t he c ompe t i t i ve ne s s of t he

pa r t i c ul a r i ndus t r y (e s ur e t o c on s i de r a s pe c t s s uc h a s ov e r a l l i ndu s t r y

, ,c a pa c i t y pr i ci ng t r e nd s a va i l a bi l i t y of s ub s t i t ut e,pr oduc t s a nd ot he r f a c t or s t ha t !ill help establish an

un de r s t a nd i ng of t he c ompe t i t i ve f or ce s

'1ou !i l l a l s o !a nt t o l oo k c l os e l y a t t he s up pl i e r s s i t ua t i on t o a s s e s s e l e me nt s of i t s cur r e nt c on di t i on

t ha t mi gh t a e c t i t s mot i va t i on

/a r l y i nv ol v e me nt i n t he c ont r a c t i ng pr oc e s s !i l l .a s s i s t yo ur e or t s t o a e c t a f a v or a bl e ou t c ome


25/26

,"he n i t c ome s t i me f or t he a c t ua l ne g ot i a t i on y our t e a ms hou l d ha v e c ompl e t e d a de t a i l e d pl a n

,pr i or i t i z i ng ne e ds out l i ne d r ol e s a nd, ,r e s pon s i bi l i t i es s e l ec t e d a l oc a t i on a nd

di s c us s e d t he v a r i ou s l i ke l y s c e na r i os t ha t mi gh t .oc c ur a nd ho!y ou !i l l de a l !i t h t he m

+l l of t he pl a nn i ng a nd s t r a t eg y de v e l opme nt

s ho ul d be do c ume nt e d s o t ha t ot he r s !i l l be a bl e t o .und e r s t a nd !ha t oc c ur r e d 8s i ng a n e xe c ut i ve s umma r y t o de s c r i be obj e c t i v e s a nd out c ome s !i l l

he l p yo u ga i n i n t e r na l a ppr ov a l a nd de s c r i be a ny-f ol l o! up a c t i on s t ha t !i l l be r e qu i r e d


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Negotiations presentation

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