1. QBook UNIT 3 Strategy Planning

2. QBook INTRODUCTION  With clear goals, the next step in preparing for a negotiation is the plan the strategy and tactics.  Strategy is a general plan for what to emphasize during the negotiation.  Tactics are the specific behaviors of strategies.  There are four basic strategies in all negotiation.  These four strategies depend on two questions:  How important is this negotiation to yourself (or your team)? and  How important is it for you to make the other side happy (keep a good relationship)?

3. QBook DIALOG (Personal Negotiation Strategy)  Fred and Jane Decide Strategy for Buying a Car  Fred: This weekend we should go ahead and buy the new car.  Jane: You mean the one we saw at the Toyota car dealer?  Fred: Yes, I have the salesperson’s business card here. His name is Bill. But the price is more than we can afford.  Jane: We should make an offer that is 20 percent below the list price.  Fred: I don’t think Bill will like that very much. He told me the price was the bottom line.

4. QBook DIALOG (Personal Negotiation Strategy)  Jane: I don’t care if he likes it. Every dollar we save on the car we can use for buying gas.  Fred: An alternative is we can buy my brother’s car. He told me he is going to replace his car already.  Jane: He just bought that car last year. He seems to change cars every year.  Fred: He even gave me a quote already. Should I offer him 20 percent less?  Jane: Of course not. If we pressure him on the price, he may not help us paint the house this summer!  Fred: Oh, yeah, so we want to stay on his good side.  Jane: Right.

5. QBook DIALOG (Personal Negotiation Strategy)  Strategy Planning Meeting  Fred: Now that we have our goals clear, we need to decide on which strategy to emphasize.  Bill: Isn’t the strategy always the same: Make the most profit?  Fred: That would be true if we want to compete with the other side or if they just accommodate our demands. I think this deal is very important for Zeno, so they won’t just give us what we want.  Bill: Is there an acceptable alternative?  Fred: Well, if Zeno Company feels we are making more profit while they are losing money, they may avoid negotiating with us.  Bill: You mean withdraw?  Fred: That is one strategy. On the other hand, if they think they can beat us trying to get the best price, they will compete.

6. QBook DIALOG (Personal Negotiation Strategy)  Bill: Isn’t that good?  Fred: Competing can make it hard to cooperate in the future. We will oppose everything they want and they will oppose everything we want. Even if we win, Zeno may be very angry over the negotiation.  Bill: Maybe we don’t need Zeno in the future.  Fred: If we have a good alternative, you could be right. Right now, however, Zeno is the best supplier we have.  Bill: So we need to collaborate with them.  Fred: Right. We need to make sure everything we do and say in the negotiation, our tactics, helps support this strategy of collaboration.  Bill: This way both sides will find the deal acceptable.

7. QBook VOCABULARY  Acceptable (adj): Meets requirements; Good enough.  Accommodate (v): Give someone what he or she wants; Agree to the other side’s requests.  Alternative (n): A different choice; Another option.  Avoid (v): Stay away from; Do not interact.  Collaborate (v): Work with other people; Cooperate; Share responsibilities.  Compete (v): Try to beat others; Strive to win; Work to get the most.  Emphasize (v): Make a point sound important; Point out something that is special.  List Price (n): The price that is officially listed; The price listed in the catalog.  Oppose (v): Work against someone; Refuse the other side’s offers.  Quote (n): A price; An offer made by either side that includes the price.  Strategy (n): A plan used to guide a team to victory.  Tactics (n): Specific behaviors that follow a strategy.

8. QBook FOLLOW UP  A strategy guides the negotiation by helping all the team members to know how they should act (tactics).  There are four basic strategies: Competition, Accommodation, Avoidance, and Collaboration.

9. QBook FOLLOW UP  Which strategy is best depends on two main questions.  The first question is how important is the negotiation outcome to you.  This could be you personally, or to your job, or to you team, or even to your company.

10. QBook FOLLOW UP  The second question is how important is it to keep a good future relationship with the other side.  If the other side of the negotiation is your friend, or even a family member, than it could be very important to keep a good relationship because in the future you will need to negotiate again.  If you go shopping in a market, or buy something at an online auction, then a future relationship may not be important because you may just negotiate one time with no future meeting.

11. QBook FOLLOW UP  Many times, the other side is a negotiator or a team from a company (a supplier or a buyer).  Once the two questions are answered, a strategy can be chosen.

12. QBook FOLLOW UP  Accommodation is best when the current outcome is not very important, but the relationship is important.  In this case, you give in to the demands of the other side.

13. QBook FOLLOW UP  Competition is best when the outcome is important, but the relationship is not.  This situation means you will not know the other negotiator very well, and in the future, you may not have to have any relationship with this negotiator.  It is also possible that you have many alternatives to choose from.  People using this strategy fight over every detail and try to get everything they can.

14. QBook FOLLOW UP  Avoidance is the best strategy when neither the outcome or the relationship are important.  Since it is not important, it would be a waste of time to negotiate.

15. QBook FOLLOW UP  Collaboration is the strategy that works best when both outcome and relationship are important.  People using this strategy try to find ways that both sides can get what they want.

16. QBook FOLLOW UP  The Four Main Strategies

17. QBook EXERCISES  Exercise A (Gap) Fill in the missing words. Use words from the vocabulary list.  We need to get an __________ offer that includes a price under 120 per unit. Most of these suppliers can ___________ our needs, so we should encourage them to ___________, which should help us get a lower price. Zeno Company is one __________ that offers a low ___________. However, they do not ___________ design very much. Maybe we can ___________ with Zeno on some new product designs. Get a ___________ from Zeno as soon as you can, but remember our ___________ is collaboration, so don’t __________ any offer they make. It is better to __________ any negotiation until we have all the information and we can plan our __________.