A Scandinavian Case (Cross Cultural Negotiations)
A Scandinavian Case
1. Why did Conquip send an RFQ with a 10 percent price-reduction requirement rather than calling de Winter in for a negotiation? Is there any downside to having run the negotiation this way?
Conquip sent the RFQ possibly attempting to anchor the negotiation and to prove its strong position towards the negotiation. This strategy is risky and could be harmful if the other party doesn't have this value between its reservation and target price, thus, if this value is out of the
Zone Of Possible Agreement (ZOPA); as it could mean an end to the negotiation, maybe leaving
“money on the table”.
2. At the first negotiation meeting, Conquip made a threat disguised within an offer.
The offer was to retain FD as a companywide, primary supplier if FD could meet its price demands.
A. What was the threat embedded in this offer?
The threat was probably to make FF its worldwide supplier intead, as they could “for sure” meet the price requests.
B. Why was this offer not credible to de Winter?
It was not credible because of the close ties between Conquip and FF. Winter didn't believe that FD could become the worldwide supplier as the Finnish government has interests on both
FF anf Conquip and would possibly prevent this to happen.
3. If FD could have reduced prices by the 10 percent requested by Conquip and still have a positive and reasonable margin, why negotiate? Why not just reduce the price to save the business?
FD didn't want to look weak, and probably though that they could get a better a greement if they convinced Conquip that its firm would gain value with the LEIF cartridges. They had faith in their product and wanted to gain a lot from this negotiation altough they also had a lot to lose. 4. How did Marc de Winter improve his bargaining position at meeting 2? What general negotiation principle did he employ? How well did it work?
De Winter entered the negotiation trying to convince Conquip that it was a win-win situation
1. Why did Conquip send an RFQ with a 10 percent price-reduction requirement rather than calling de Winter in for a negotiation? Is there any downside to having run the negotiation this way?
Conquip sent the RFQ possibly attempting to anchor the negotiation and to prove its strong position towards the negotiation. This strategy is risky and could be harmful if the other party doesn't have this value between its reservation and target price, thus, if this value is out of the
Zone Of Possible Agreement (ZOPA); as it could mean an end to the negotiation, maybe leaving
“money on the table”.
2. At the first negotiation meeting, Conquip made a threat disguised within an offer.
The offer was to retain FD as a companywide, primary supplier if FD could meet its price demands.
A. What was the threat embedded in this offer?
The threat was probably to make FF its worldwide supplier intead, as they could “for sure” meet the price requests.
B. Why was this offer not credible to de Winter?
It was not credible because of the close ties between Conquip and FF. Winter didn't believe that FD could become the worldwide supplier as the Finnish government has interests on both
FF anf Conquip and would possibly prevent this to happen.
3. If FD could have reduced prices by the 10 percent requested by Conquip and still have a positive and reasonable margin, why negotiate? Why not just reduce the price to save the business?
FD didn't want to look weak, and probably though that they could get a better a greement if they convinced Conquip that its firm would gain value with the LEIF cartridges. They had faith in their product and wanted to gain a lot from this negotiation altough they also had a lot to lose. 4. How did Marc de Winter improve his bargaining position at meeting 2? What general negotiation principle did he employ? How well did it work?
De Winter entered the negotiation trying to convince Conquip that it was a win-win situation