Fore School of Management NEGOTIATIONS CHECK LIST Take It or Leave It

1. What do you expect to accomplish through this negotiation in terms of share and prices?

2. What is the best share and price that you expect?

3. What will be your break away price? Break away price: Rs. 1200 4. What are your needs and interests?

5. What is your BATNA?

6. What are the ways you may be able to improve your BATNA? a. Are there any better arrangements with other suppliers/customers?

b. Is there any way to change the terms you bring to the table that can improve your BATNA?

7. What are the issues and terms you care most about? The relationship between JK tyre, which is currently the largest supplier of tyre to maruti800 and zen might get strained if Maruti cracks a larger deal with Bridgestone.

8. What do you think that the other side wants to accomplish through this negotiation? Bridgestone will be aiming for a Bulk deal from Maruti so that it can gain from the high market share of maruti in the segment that zen belongs to.

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9. What terms you might offer that would be seen as highly beneficial to them at a low cost to you? Breakaway price of 1200 is seemingly low cost. As zen is still having the highest market share in its segment in India, Bridgestone will be able to get a bulk deal thus will make profit by bulk sales.

BATNA
BATNA is an acronym for Best Alternative To a Negotiated Agreement. It is NOT the bottom line that negotiators perceive as the worst possible outcome that a negotiator might accept. The bottom line is the final barrier where a negotiation breaks down. It is a means to defend oneself against the pressure and temptation that is often exerted on a negotiator to conclude an agreement that is self-defeating. Bottom lines foster inflexibility, stifle creativity and innovation, and lessen the incentive to seek tailor-made solutions that resolve differences. A BATNA is not interested in the objectives of a negotiation, but rather to determine the course of action if an agreement is not reached within a certain time frame. It prohibits a negotiator from accepting an unfavourable agreement or one that is not in their best interests because it provides a better option outside the negotiation. A viable BATNA acts as an essential insurance policy and provides you with two possibilities. Either you settle an agreement with more favourable terms or provides you the 'willingness' to break off the deal. BATNA permits far greater flexibility and allows much more room for innovation than a predetermined bottom line. When creating a BATNA, a negotiator should: Brainstorm a list of all available alternatives to be used in the negotiations. Look at the most promising alternatives in terms of cost (short term and long term) to you and benefit to your counterpart. Also gauge the feasibility, impact on your current state of affairs and the consequences of exploring the alternatives.. Estimate your counterparts alternatives to gauge the strength of his BATNA Do not over-estimate your BATNA or underestimate that of your counterpart. Timing is very important while revealing your BATNA. Do it fast if you have a strong BATNA. This would prevent the other party/ parties from acting as if a viable alternative didn't exist. However, if you have a weak BATNA, do not disclose it especially if the other party indicates they are overestimating their own BATNA. You can use this information to lower the other partys expectations. In situations where both parties possess a strong BATNA, the negotiation would seem rather fruitless because there would be very little incentive to reach an agreement. During a negotiation, follow a flexible approach. Listen carefully to the other sides views to assess their BATNA and work out ways to reduce it. You can also improve your BATNA by expanding your options and bringing more variables into the negotiation. Do not get stuck on price being the only variable in a negotiation. It may be advisable to take a small break , assess the situation with your team and start the negotiations again. When a negotiator fails to explore its BATNA, they will be exposed to: Strong internal pressure to make an agreement, as they will be unaware of what would happen should the negotiation fail; They will be over optimistic about proposed agreements which can then result in the associated costs not being fully appreciated; They will face the peril of becoming committed to reach an agreement, as they will be unaware of alternatives outside the negotiation.
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They will become beholding to the whims of the law of agreement, which holds that when

persons agree to something this is entirely dependent on the attractiveness of the available alternatives.

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