Through business negotiations, companies buy at low prices and sell at high prices, so as to get the maximum profit between buying and selling. The following is a case analysis of business negotiation that I compiled for you. Welcome to read!
Business negotiation case analysis of the negotiating parties:
Company A - a well-known domestic commercial vehicle company
Company B - a famous European automobile design company
Case background:
Company A is a well-known domestic commercial vehicle company. When developing a certain commercial vehicle, it must Carry out vehicle external flow field simulation design (CFB), but the company does not have CFB analysis engineers, and lacks the software and hardware facilities for analysis. However, this work is related to the performance of the vehicle product and must be done. Therefore, the product development manager of Company A began to look for capable CFB analysis partners at home and abroad, and launched multiple rounds of negotiations with multiple design consulting companies. Starting from technical negotiations, two companies were finally selected, which lasted for half a year. After the negotiation of the technical plan and implementation plan is completed, the final stage of business negotiation is entered.
Although Company B enjoys a high reputation in Europe, it has never implemented a project in the Chinese market. Therefore, Company A is worried that the project will not achieve the expected results after spending a huge amount of money. Therefore, Company A hopes that in its first cooperation with Company B, Company B can conduct a CFB analysis for Company A free of charge. If the first cooperation effect is good, it will consider long-term cooperation with Company B. In the context of the financial crisis, Company B is eager to expand new business in China to alleviate the company's financial crisis and get rid of the risk of bankruptcy. Therefore, Company B wants to rely on its rich experience and reputation in CFB to build its first project in China and hope to have higher profits. . It was against this background that the negotiations took place.
Negotiation process:
The first round of price negotiation, the meeting location is the conference room of Company A. Company B offers a price of 3 million euros, but Company A cannot accept it. Company A insists that the first cooperation is a tentative one, and Company B should look at long-term interests. Both parties hold their own opinions and cannot reach a unified opinion.
In the second round of negotiations, the meeting location was changed to a five-star hotel. Before the meeting, the deputy manager of the technical department was sent to drive a GL8 commercial vehicle to pick up the airport in person and arranged for all foreign participants to stay in the hotel. , all expenses incurred by the conference (including air tickets and hotels) will be borne by Company A. The day before the meeting, the general manager of Company A personally hosted a banquet for all the negotiators of Company B. At the dinner table that night, both parties had a very happy conversation. The next day, negotiations began, and the foreign party adjusted its offer from the original 3 million euros to 2.5 million euros. Company A was unhappy when seeing this offer, but still smiled and insisted that the first cooperation be a trial one, but both parties still persisted. During the break in the negotiations, Company A's translator explained to Party B that the price of 2.5 million was not in line with China's national conditions, and that "250" had a profound meaning in Chinese.
Party B has some understanding of China's national conditions, but perhaps taking into account its consistently high profile in Europe, they still insist on the offer this time and will not make concessions.
In the third round of negotiations, Party A invited the party to negotiate in Qingdao. On the one hand, Company A has a factory in Qingdao, and on the other hand, it is the Qingdao Beer Festival. Most of Company B's negotiators are Germans and have a deep affection for beer. After getting off the plane, the delegation of Party B was taken directly to the Oktoberfest site. In addition, many places in Qingdao still retain the style buildings of the leased area, and the negotiation venue was also arranged in a German-style hotel. The representative of Party B was obviously very happy. The top leaders of Party A and Party B attended this round of negotiations at the same time, and some officials from the local government were also invited to attend the negotiations. On the morning of the negotiation, Company A took a delegation from Party B to visit the factory workshop in Qingdao. Negotiations officially started in the afternoon. Without waiting for the quotation from Party B, the leader of Party A spoke first, saying that this cooperation was a friendly cooperation witnessed by local government officials and hoped to make a successful project. Party A was willing to undertake the project and Party B Representing all the costs of traveling to and from China, I hope Company B will consider developing business smoothly in China in the future and be sincere in cooperating with the Chinese side. He also stated that once the first cooperation is successful, a five-year cooperation contract will be signed and the price will be paid in accordance with international practices. Finally, the leader of Party B decided to do a CFD analysis for Company A for free, but the hardware would be purchased by both parties together, and agreed to train Chinese engineers as CFD engineers. However, the results of this cooperation will be shared by both parties, and Party B has the right to do so. Use relevant project information as subsequent promotional materials. Finally, the two parties signed a friendly cooperation agreement under the witness of Qingdao officials in charge of industry.
Case analysis:
After studying the business negotiation course, I found that this negotiation went through three rounds, and the final signed contract was ultimately in compliance with the eight basic principles of the Negotiation Manual.
First of all, for Company A, BATNA is looking for other partners. In fact, after the first round of negotiations failed, Company A was already negotiating with another American company to look for cooperation opportunities. Of course, Company A’s first choice is Company B. Secondly, the related parties involved in the negotiation. In the third round of negotiations, Company A invited local government officials to show that the project was supported by the government, to make Company B more trustful of Company A, and to imply that Company B’s future development in China would be backed by the government. The future is bright.
As for the primary interests of both parties, I believe that Company A’s primary interest is to seek long-term partners and avoid the risks of first cooperation. For Party B, its primary interest is to find new partners and get rid of the threat of bankruptcy. Party A's negotiator takes Party B to visit the factory, and allows government officials to be witnesses for signing the contract, making Party B realize that Party A is a powerful enterprise, and making Party B feel that although it may not be possible the first time
There is no way to make money, but as long as the project is successfully carried out, the long-term benefits far outweigh the immediate benefits.
Another key to the success of negotiations is that after several rounds of negotiations, both parties have sufficient communication. As an enterprise that has never done business in China, Company B was quite ignorant of China's national conditions and culture during the first negotiation, so it quoted a figure of "250W". After several rounds of exchanges, Company AB had dinner together and went to Oktoberfest together. Both parties had a deeper understanding, and Company B also had a deeper understanding of China's national conditions. Even though the contract could not be negotiated this time, employees from both sides slowly established a friendship. In the last round of negotiations, Company A sent its top leader, which further demonstrated Company A's respect for Company B and its earnest desire to cooperate with Company B. Facts have proved that this series of methods adopted by Company A is an important factor in the success of negotiations. The third round of negotiations is not like the first round of negotiations, which is mechanical and starts with price negotiation. Instead, it is carried out on the basis of mutual trust. In the third round of negotiations, it was obvious that Company B was sincere about this cooperation, which was also due to the sincerity shown by Company A.
In the last round of negotiations, Company B is willing to accept the Chinese side's first cooperation method of designing for Company A free of charge, but Company A must bear the hardware funds. This is also an innovative point of negotiation. Due to the financial crisis, Company B has limited funds. It is a relatively large concession to provide Company A with a free design. This has never happened before in Company B's cooperation with other countries. Such a concession fully reflects the sincerity of Company B. . Although there is a requirement that Company A be responsible for the hardware, this request is also reasonable. On the one hand, Company B currently has limited funds, and on the other hand, the hardware equipment is reusable. When Company A purchases the hardware, the ownership belongs to Company A. Therefore, Such a proposal is a win-win proposition, and Company A has no reason to refuse.
Summary:
This negotiation is a win-win negotiation. For Company A, it can get external technical support and train its team through projects; and the foreign party can also use it This cooperation enters the huge Chinese automobile development market and lays the foundation for future development. The reason why the negotiation took three rounds to be successful is that the two parties did not understand the other party's culture before, and they were doomed to fail if they just negotiated the price as soon as they started. Afterwards, Party A adjusted its strategy in a timely manner and reversed the situation. This is also inseparable from Party A's strategy of establishing a relationship first and then negotiating. In short, business negotiation is a win-win game. It is not a fight between one another and life and death, but the pursuit of common interests and mutual growth. In foreign-related negotiations, the negotiating parties must know their own strengths and weaknesses, use relationship methods, and regard establishing good interpersonal relationships as an important part of the negotiation. This case also confirms a principle: Never negotiate the price right from the start!
Analysis of classic business negotiation cases
Creating false information to make an impact in the east and attack in the west
A certain factory It is necessary to introduce a radio production line from Japanese company A, and both parties will negotiate during the introduction process. After the negotiations began, the Japanese company insisted on pricing according to the price it had sold to a certain factory in the past and refused to give in. The negotiations reached a deadlock. In order to take the initiative, we began to frequently contact Japanese Company B to negotiate the same project, and intended to disseminate this information. At the same time, we passed the price information to Company A through relevant personnel. Company A believed it and did not want to lose the deal. Hurry up and accept the price we propose. This price is 26% lower than the price introduced by other manufacturers in the past.
Comment: When a road fails, you should often explore another method. In this case, we used dissemination of false information to gain the initiative and win.
Business negotiation is one of the most common business activities. In sales transactions, corporate mergers, technology introduction, and even various commercial conflicts, people may use negotiation methods to solve problems, so in a sense It is said that business negotiation is an intelligence game played between both parties in the negotiation. The factors that play an important role in this game are not only the eloquence and quality of the negotiators, and the strength and status of the company, but more importantly, the relevant information each possesses. What will be introduced in this article are some cases of using intelligence strategies to achieve successful negotiations in business negotiations.
Grasp the intelligence and take preventive measures
At a certain trade fair, our foreign trade department negotiated export business with a merchant. In the first round of negotiations, the merchants used various tricks to get our bottom line, listed out-of-date prices, and deliberately lowered the quantity of goods purchased. We immediately suspended the negotiations and collected relevant intelligence. We learned that a similar manufacturer in Japan had a major accident and stopped production. We also learned that the product may have new uses. After carefully analyzing this information, negotiations continued. We have better information and can take precautions beforehand and tell the other party: Our supply is small; the demand for our products is great; Japanese manufacturers cannot supply.
The other party immediately realized how little we knew about the background of this transaction and resigned. After some small negotiations, they obeyed, accepted our price, and purchased a large amount of the product.
Comment: In business negotiations, eloquence is important, but the most essential and core thing is the understanding of the negotiation, and this kind of understanding is often based on the understanding of the background of the negotiation.
Grasp environmental information, brake with silence, and watch the changes
In June 1987, the director of Jinan No. 1 Machine Tool Factory promoted machine tools with the American Kalman Company in Los Angeles, USA. of negotiations. The two sides have reached a stalemate in the negotiation on price issues. This is the information we have obtained: the contract originally signed by Kalman Company with Taiwanese businessmen cannot be realized because the US policy of increasing tariffs on Japan, South Korea and Taiwan has delayed Taiwanese businessmen. Reluctant to ship. Kalman Company also signed a supply contract with its customer. The other party wanted the goods urgently, and Kalman Company fell into a passive situation. Based on this information, we responded calmly in the subsequent negotiations. Kalman Company finally lost its composure and purchased 150 Chinese machine tools in the order contract.
Comments: In negotiations, you must not only pay attention to your own relevant intelligence, but also pay attention to the opponent's environmental intelligence. Only by knowing yourself, the enemy and the situation can you win.
Accumulate and make progress? Raise troops for a thousand days, use them for a while
In the 1980s, the level of optical cold processing in our country was low. In order to change this situation, the country decided to introduce Federal German labor to Nanjing Instrument Machinery Factory ( LOH) Optical Machine Tool Company's optical processing equipment. The Science and Technology Information Office of Nanjing Instrument Machinery Factory immediately conducted an intelligence analysis on Lao Company's production technology. When negotiating with Labor Company, Labor Company proposed to transfer 24 product technologies to us. We had previously conducted research on Labor Company’s product technologies and selected 13 products from the 24 products for introduction, because these 13 products The product technology is enough to constitute an advanced and complete production line. At the same time, we also proposed reasonable prices based on our knowledge of international market intelligence. In this way, our country not only purchased advanced equipment but also saved a lot of foreign exchange. Afterwards, R. Krueger, the chairman of the company, praised: "Your business negotiation not only saved you money, but also took out the heart of our company." ?
Comment: Pay attention to the collection and processing of intelligence in peacetime, and you can often be more comfortable and successful in negotiations.
Master historical information and force out bargaining cards
When a Chinese factory negotiated an equipment purchase deal with a U.S. company, the U.S. company quoted a price of US$2.18 million. We did not agree, and the U.S. side lowered the price to US$2.18 million. 1.28 million US dollars, we still disagree. The United States pretended to be angry and threatened to reduce the price by another $100,000, and would return to China if the $1.18 million was not transacted. Because our negotiators have historical information about U.S. business transactions, they are not swayed by the U.S. threats and insist on lowering prices. The next day, we were not surprised when the American businessman returned to China. Sure enough, the US representatives returned to China a few days later to continue negotiations. Our representative revealed the intelligence obtained abroad. The United States sold the same equipment to Hungarian merchants for US$980,000 two years ago. After the intelligence was presented, the United States lowered the price to a reasonable level after some excuses such as rising prices.
Comment: In a sense, price competition in negotiations is also an intelligence competition. By grasping the opponent’s accurate intelligence, you can win in price competition in negotiations
Obtain useful information Information, correct value determination
In 1982, Shijiazhuang No. 3 Printing and Dyeing Factory prepared to carry out a 15-year cooperative production with the German Carver Company in the form of compensation trade, stipulating that foreign parties would provide the production of adhesive interlinings. processes and critical equipment. The process is covered by numerous patents. The party in the initial negotiation required us to pay patent transfer fees and trademark fees of ***2.4 million marks. Our factory director immediately sent someone to conduct a patent information investigation on these patents. The investigation revealed that the validity period of the patent for the main technology - the two-point coating process - will expire in 1989. In the second round of negotiations, we presented this evidence and asked for a lower transfer fee. The foreign businessman had no choice but to reduce the transfer fee to 130 marks.