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Automotive Fabrics – Negotiation Case
This negotiation case has been successfully used in both undergraduate, MBA, and
executive education sessions, and is an excellent simulation tool that allows participants
to experience a true negotiation.
Mock negotiations such as these allow students to
experiment with different negotiation strategies, in a “safe setting” where there are no
real dollars on the table.
In some classes, the students have been informed ahead of
time that part of the grade for the assignment will correspond to how good the relative
outcome of the negotiation is for their team.
This generates a great deal of competition
The case can be run over two to three one hour class periods.
of the “assignments” from this exercise is to get students to prepare a negotiation
preparation paper that details their negotiation plan, their pessimistic, optimistic, and
most likely goals for each negotiated item, and their concession strategy.
Students should be assigned to teams of 3 to 4 individuals, and designated as either a
buyer or a supplier team.
Each team has available to them some common information,
as well as proprietary information.
It is critical that teams do not inadvertently gain
access to the other team’s information, otherwise the negotiation will be patently unfair!
Each team’s information is included in the next section.
Discussion / Recommendation:
A very important part of the negotiation process is the preparation for the meeting.
Because the teams have limited information, they should prepare their negotiation
strategy based on the available information.
For instance, the buying company should
ask themselves if 8% is a reasonable profit margin, given the number of qualified
There are different permeations of this negotiation that you can use with this
case to set the stage:
You can assign teams to negotiate with one another according to their preferred
supplier and historical relationship.
In this case, the assigned negotiating
King with Cybaris,
Queen with Athena,
Duke with Medusa
Duchess with Orion
The second option involves allowing any buyer to partner with any other single
However, each team is limited to one and only one other partner.
scenario can take a little more time, as buyer teams may go out for RFQ’s, and
supplier teams may decide to send “sales people” out to find a preferred partner.
Interestingly, although teams are already matched based on their reputations, the
authors have observed situations where buyer teams have refused to do
business with their initial team.