AFM280 Lecture 6: Reflection 6
30 May 2018
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Reflection 6 – Negotiation tactic
During my negotiation with my partner today in OB, I used the negotiation tactics of
information exchange, promises of reward, and looking for trade-offs. I was on the side of the
firm that has the patent to manufacture the serum to cure the disease for the pregnant
woman. I wanted to buy the 300 peaches all to myself without interference from Dr. Roland`s
firm. I first mentioned the fact that our firm has the ability to utilize the resources to make the
maximum profit because of our patent. Therefore, even if Dr. Roland`s company receives the
peaches, they wouldn`t be able to put it to use because of our patent on the serum. My partner
then told me that their company developed a new technology, but I expressed the fact that
they don't have a patent. Thus, our firm is still able to imitate their technology and make profits
from it. I also emphasized on the trade-offs. If none of us budge from our terms, even if Dr.
Roland manages to acquire the peaches, he would`ve paid a hefty price because of our bid war.
I was allowed to offer up to $250,000 which implies that Dr. Roland would`ve paid more than
this amount to win over me. Therefore, his cost will be so high that even if his firm manages to
generate the profit in the future, it`ll either be negative or breaking even. This ending wouldn`t
benefit any of us. Finally, I mentioned the promise of reward. I told him that if his firm allows us
to buy the peaches without interference, we would be able to obtain it at the lowest price
possible. The lower the cost we pay, the higher the profit we will make in the future. With that
profit, our firm would give 35% of it to Dr. Roland`s company. Their firm would be getting 35%
of our profit for free without having to do anything. One of Dr. Roland`s concern was that if
they were to acquire the peaches, their future profit could potentially be higher than 35% of
the amount of profit we make. However, I rebutted with the fact that his future benefit is
uncertainty, but if he agrees with me, it will be a guaranteed 35% of our profit.
In conclusion, we agreed on the negotiation on the basis that our firm gets the right to
purchase the entire 3000 peaches and then split 35% of our profit to them in the future. Their
firm wouldn`t incur any costs such as material, labor, marketing and distribution, and overhead.
It is a win-win situation for both parties.
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