BATNA

"Don't put all your eggs in one basket." It's an old saying which has
stood the test of time

 To a negotiator, this wise old proverb illustrates that if you

bring only a single proposal to the table, you may likely end up
with a rotten deal, or no deal at all. You need to have an
alternative plan waiting in the wings.
 It should be fairly obvious that not every negotiation is going
to get tucked away in a nice, neat settlement package. This is
where BATNA comes to the rescue for those of you sensible enough,
to have heeded the sage advice of that  old farmer who coined the
above proverb many ages ago.
 BATNA means 'Best Alternative to a Negotiated Agreement'. This is
your alternate plan when the talks start to wobble out of
control. It can also be your trump card to make the deal happen
to your advantage, or walk away from it altogether.

 Let's illustrate BATNA by using a simple example. In the first
scenario, let's say that you are a buyer who goes to a supplier
to purchase some badly needed parts to complete a project. The
supplier senses your urgency; his eyes begin to gleam with
anticipation. You want the lowest price possible while he wants
the higher price. Oh! Oh! You have no fallback position. You're
both in the boat, but it's the supplier who's holding the oars,
so guess who decides where the boat makes land?

 On the other hand, say you go to the meeting prepared. Before
arranging the meet, you set up talks with 2 other suppliers who
are ready and able to handle all your needs. When you meet with
the first supplier in this second scenario, you can calmly sit
back in your chair, and allow the supplier to finish his spiel.
Now, watch the gleam fade from his eyes when you spring the
little titbit, about his competitors willingness to solve your
problem. You have BATNA! The talks suddenly become more amenable.
So, who's holding the oars now?
When developing a BATNA, a negotiator should:

 Brainstorm a list of alternatives that could be considered if the

negotiation failed to deliver a favourable agreement:
 Select the most promising alternatives and develop them into
practical and attainable alternatives: and
 Identify the most beneficial alternative to be kept in reserve as
a fall-back during the negotiation

Examples
The following examples illustrate the basic principles of identifying
the BATNA and how to use it in further negotiations to help value
other offers.

[edit] Selling a car

If Seller has a written offer from Buyer to buy my car for $1000, then
Seller's BATNA when dealing with other potential purchasers would be
$1000, since Seller can get $1000 for the car even without reaching an
agreement with such alternative purchaser.

In this example, other offers that illustrate the difficulty of

valuing qualitative factors might include:

 An offer of $900 by a close relative (is the goodwill generated

worth $100 or more?)
 An offer of $1100 in 45 days (what are the chances of this future
commitment falling through, and would my prior BATNA ($1000)
still be available if it did?)
 An offer from another dealer to offset $1500 against the price of
a new car (do I want to buy a new car right now, the offered car
in particular? Also, is the probably minuscule reduction in
monthly payments worth $1000 to me today?)

[edit] Purchasing

Consider the following business example: Company one can choose to buy
from companies two, three and four - but companies two, three and four
can only sell to company one. Company one can use their powerful BATNA
position to leverage a better deal by playing companies two, three and
four against each other. This is a common practice among purchasing
and procurement managers in the business world

MERGER and A

In the world of business, it is not unusual for various industries to

undergo a series of mergers and acquisitions as the business landscape
undergoes some type of change. Often, an acquisition or merger is
undertaken for the purpose of combining resources in order to provide
a higher quality of goods and services to consumers. However, there is
a significant difference between a merger and an acquisition

Mergers and acquisitions, or M&A as they are also known, are both
means by which two or more business entities become one larger entity.
In the case of a merger, this is often a process that is entered into
after a long period of evaluation on the part of the respective
officers and owners of the companies involved. When the idea is to
merge companies together, there is usually a sense that all parties
involved in the creation of the new and larger entity are equals in
the process and will be treated as such as the structure of the new
entity is planned and put into operation.
With an acquisition, the scenario is a little different. When one
company decides to acquire another company, the process usually
involves a buyout or purchase of that business. There are not
necessarily any plans to continue all the operations of the acquired
company; often the resources of the acquisition are absorbed into the
resources held by the purchasing company while the acquired business
simple ceases to exist.

Mergers and acquisitions also tend to differ in one other important

aspect. While mergers are generally situations where all parties want
the combination of companies to take place, that is not necessarily
the case with an acquisition. Hostile takeovers are an example of an
acquisition that is not accomplished with the enthusiastic support of
the officers and shareholders of the acquired business. At best, there
may be a sense of grudging acceptance that the takeover will occur
whether or not shareholders and officers want the acquisition

It is not unusual for many different industries to go through periods

where mergers and acquisitions are the norm. During the 1990’s, local
and national teleconferencing companies often merged in order to
provide a broader suite of services to their customers. The textile
industry has seen its share of both mergers and acquisitions,
especially during the last thirty years of the 20th century. Even
industries such as food service and retail go through periods where
competitors merge in order to secure a major share of the consumer
market, or where companies are acquired in order to gain access to
assets while also minimizing the number of direct competitors within
the industry.

Mergers and Acquisitions in India

Ten biggest Mergers and Acquisitions deals in India

The factors responsible for making the merger and acquisition deals
favorable in India are:

 Dynamic government policies

 Corporate investments in industry
 Economic stability
 “ready to experiment” attitude of Indian industrialists

Sectors like pharmaceuticals, IT, ITES, telecommunications, steel,

construction, etc, have proved their worth in the international
scenario and the rising participation of Indian firms in signing M&A
deals has further triggered the acquisition activities in India.

In spite of the massive downturn in 2009, the future of M&A deals in

India looks promising. Indian telecom major Bharti Airtel is all set
to merge with its South African counterpart MTN, with a deal worth USD
23 billion. According to the agreement Bharti Airtel would obtain 49%
of stake in MTN and the South African telecom major would acquire 36%
of stake in Bharti Airtel.

 Tata Steel acquired 100% stake in Corus Group on January 30,

2007. It was an all cash deal which cumulatively amounted to
$12.2 billion.

 Vodafone purchased administering interest of 67% owned by Hutch-

Essar for a total worth of $11.1 billion on February 11, 2007.

 India Aluminium and copper giant Hindalco Industries purchased

Canada-based firm Novelis Inc in February 2007. The total worth
of the deal was $6-billion.

 Indian pharma industry registered its first biggest in 2008 M&A

deal through the acquisition of Japanese pharmaceutical company
Daiichi Sankyo by Indian major Ranbaxy for $4.5 billion.

 The Oil and Natural Gas Corp purchased Imperial Energy Plc in
January 2009. The deal amounted to $2.8 billion and was
considered as one of the biggest takeovers after 96.8% of London
based companies' shareholders acknowledged the buyout proposal.

 In November 2008 NTT DoCoMo, the Japan based telecom firm

acquired 26% stake in Tata Teleservices for USD 2.7 billion.

 India's financial industry saw the merging of two prominent banks

- HDFC Bank and Centurion Bank of Punjab. The deal took place in
February 2008 for $2.4 billion.

 Tata Motors acquired Jaguar and Land Rover brands from Ford Motor
in March 2008. The deal amounted to $2.3 billion.

 2009 saw the acquisition Asarco LLC by Sterlite Industries Ltd's

for $1.8 billion making it ninth biggest-ever M&A agreement
involving an Indian company.

 In May 2007, Suzlon Energy obtained the Germany-based wind

turbine producer Repower. The 10th largest in India, the M&A deal
amounted to $1.7 billion