Full Name: Date: 6/3/2020

Name of Exercise: Texoil Negotiation Case Role: Buyer Representative

PLANNING DOCUMENT
Based on the role you are playing and the available information: What issues are most important
to you? (list in order of importance)
 Buy a service station to fulfill the need of the company's five-year plan.
 Limited Purchase Budget
 Need for remodeling to generate more revenue
 Need for qualified management to run the station
What is your BATNA? Reservation Price? Goal/Target?
BATNA: Build a modern service station for $575,000
Reservation Price: $400,000 (dedicated purchase budget)
Goal/Target: 300,000 (less than the budget to create room for facility improvement and hire skilled
management). A complementary goal, crucial as well, is keeping the Smiths for the management of
the station.
What issues do you suspect are most important to your opponent? (list in order of importance)
Family issues: Something must have happened, that it is so important to either sell the business to
gather money or stop working to focus on the family aspect.
Selling Price: They want to get the most out of the deal to solve their family issue.
What do you suspect is your opponent's BATNA? Reservation Price? Goal/Target?
BATNA: Leasing out to an independent operator or appointing an employee to take over the
management
Reservation Price: 375,000 (Five years of current profit)
Goal/Target: 750,000 (Ten years of steady profit)
Who has more power in this situation? What are your sources of power? What might be theirs?
Texoil has more power because the Smiths have shown their pressing need to sell a profitable
business that they love to the extent that they did not need any help to perform.
Texoil is an essential supplier of the Smiths. It could represent a daunting competitor, and build a
brand new, modern station – the Smiths station needs some upgrade. Texoil can also quickly seal the
deal (ability to finance the purchase and excellent knowledge of the industry)
The Smiths own a profitable turnkey business / Reputable management (They have a customer base,
and their company is integrated into the community) – unique location of the facility – The only
station on sale in the area.
Do you foresee any difficult issues that might come up or pertain to values/ethics?
The Smith family issue (Need to know more about it. It could account for more than it looks)
What are your opening moves / first strategies? How do you plan to interact with the other party?
Start with pleasant memories of a long collaboration between our companies and praise their
excellent management. The goal is to create an enabling environment.
Then ask friendly questions, showing great interest and support in whatever is happening in their
family. And finally, ask about how they see a good deal could look.