Mastery Negotiation 2_FINAL.docx

Mastery Negotiation 2_FINAL.docx - RUNNING HEADER MASTERY...

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RUNNING HEADER: MASTERY NEGOTIATION 2 1 Mastery Negotiation 2 Southwestern College of Professional Studies Introduction A negotiation took place between a computer hardware maker and a potential new supplier. I played the role of the purchaser, and Robert McKendrick played the role of the supplier. McKendrick is the owner of a start-up company that currently supplies the electron component that is needed to make my computer hardware work. My current supplier’s contract is up in less than 12 months and I need to determine whether to renew the current contract or go with a new supplier. Negotiations – Day 1 At the start of negotiations, there was very little small-talk as we both decided to jump right into what we truly needed to talk about. McKendrick presented his company to me as well as his initial starting point: seven year contract with a purchase price of $17.00 per unit as well as a guaranteed minimum order of 100,000 unit per year. Out of pure frustration, I brushed off the initial request and reminded the supplier that his company is in its first year of business and as a
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MASTERY NEGOTIATION 2 2 start-up company, it is crazy to request over market price for the electronic processor. Robert understood the point of view; however, he insisted that I should take his word and trust his company to perform at the level needed. I decided that we may need to take a break from negotiation and resume in the morning, I requested that McKendrick take an honest look at his numbers and present a more realistic request tomorrow. Negotiations – Day 2 Today’s negotiations started a little better as we began with some small-talk which lightened the air. This made both of us feel a little bit more comfortable but maybe a little too comfortable. Robert presented his new request for a seven year contract with a purchase price of $15.00 per unit as well as a guaranteed minimum order of 100,000 units per year. Not meaning too, I laughed at the realization that the price per unit was still above market-value even though I mentioned yesterday I wouldn’t pay over market value. Therefore, jokingly I countered with a three year contract with a purchase price of $14.50 per unit and minimum order of 50,000 per year. Robert did not take this very well and was insulted, I immediately apologized. I stated that
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