You Can't Always Get What You Want

This time, I played Mahek Masala Products, a spices trader in India. I had just bought from my supplier 1,000kg of premium quality cinnamon at RS 290 per kg, which amounts to Rs 360 per kg with the additional costs. I had to sell it in three-weeks time before the cinnamon went bad. I had two companies who were interested in buying it from me: → Marex Pharma: they needed it to make baby-food. Offer: they would buy 700kg for Rs 390 per kg. They would also receive a 10% subsidy from the government, so in reality each kg of cinnamon would cost them Rs 351. → Offshoot Intermediaries Limited: they wanted the cinnamon for drug production, but they are also present in the baby-food market. They hadn’t given me an offer yet, but their payment terms were supposed to be better than Marex’s. They would also buy the entire stock of cinnamon (1,000kg). However, I though they would not be eligible for the government’s subsidy due to their rocky relationship. This role play ...

Photo by  rawpixel.com  on  Unsplash Before going into a negotiation there are several aspects to be considered: 1. BATNAs (Best Alternative to a Negotiated Agreement): What will both parties do if they don’t come to an agreement? That is, when they are not able to reach a solution that makes them better off than they would be by walking away. It is necessary to evaluate all the alternatives to an agreement and that sometimes means thinking outside the box. The solution might involve more aspects than just the money involved. For example, in the Salt Harbor negotiation we were asked to focus only on the amount the land parcel was worth. But it might have been more beneficial for Brims to not sell and go to court, because a chain of stores usually has enough resources to go through a legal battle. Therefore keeping the land parcel would be Brims BATNA. And if Easterly refused to pay over $165,000, then Brims might have ended the negotiati...

In this role play I was representing Brims, a chain of coffee shops. I bought a land parcel next to Easterly Inn to open up my shop, but the Inn’s owner challenged my permit to build saying the parcel did not respect the zoning laws. So in the negotiation I was supposed to sell my parcel of land to Easterly in order to buy some other parcel somewhere else. Our negotiation had three rounds : 1) I made the initial offer, even though I didn’t want to at first, because I wanted to know my adversary’s initial offer. Since he didn’t tell me I tried to ask some questions like “Why are you against me building a coffee shop next to the Inn?” He answered it would block the Inn’s view of the harbor. Before I could ask something else he asked me how much I would be willing to sell the parcel for I had to give him my maximum price: $180,000. 2) He then argued that I had bought the parcel for $100,000 and questioned my initial offer. 3) I then told him that I had bought the parcel...

In this exercise we had to put ourselves in Google’s shoes in 2005 when the company was negotiating with China to gain a .cn domain. There were three main issues for both parties: internet access, censorship and technology. But first of all, why negotiate? In this case, negotiating allows Google to get a better reputation (and avoid what happened to Yahoo – it allowed China’s government to censor the search results in China and this angered Yahoo’s North American client base) and it allows China to gain technological knowledge that they will not have if they keep Baidu (Google has a powerful algorithm envied by its competitors). In order be well prepared for the negotiation it is important to find out what are each other’s positions and interests. Interests are more difficult to figure out, and they might reveal themselves during the negotiation so it is necessary to adapt accordingly. After doing this, we need to define our priorities and our adversary’s priori...

You can’t always get what you want...so negotiate! A negotiation is worth the try whenever the possible outcome of the exchange is better than any other option you have. In order to negotiate successfully and not get out of a negotiation empty-handed or feeling you have lost something, you need to know your BATNA – Best Alternative To a Negotiated Agreement. This is a “ preferred course of action in the absence of a deal ”. For example, during the two-dollar bargaining game I didn’t clearly have a BATNA and this hindered my negotiation strategy. I just knew I had to get $1.60 but I had no idea what to do if I got a smaller amount, which was what eventually happened. However, there were no stakes. I didn’t really need that money, and the argument I came up with was nonsensical. In the second round, I also hadn’t thought about a BATNA; basically because I didn’t even know such a thing existed. But upon reading about it, I found myself thinking “Oh yeah, I do this al...