Negotiation preparation document 1

Coffee contract

As the director of Food and Beverage for Statler Hotel, the goal of this negotiation is to make
the best deal about coffee bid with vice president of sales for Anderson Coffee.
After setting up the self-assessment about the current situation in the coffee supply, I have
identified the possible strategy and done some preparation for this upcoming conversation.

 Identify the walk away point.

The reservation point in this deal is $7.35/lb.
Anderson will offer a superior product than he current vendor who provides the hotel with
good coffee at $4.70/lb and the quality difference between them is worth $2.70/lb.
Therefore, the worst deal acceptable price is $7.40/lb for reaching the cost-effectiveness
goal. However, for my own sake, I would like some bonus in making this deal and the

m
minimum amount I want is $250.

er as
co
 Identify the target.

eH w
The target price in this deal is $6.85/lb.

o.
Based the investigation done before, there is some negotiable price gap. Because of the
rs e
volume we demanded, we cannot get the price that is less than $5.95/lb as well as Colonial
ou urc
Williamsburg. However, the hotel has some strengths and things to offer to Anderson which
would probably make the price lower.
o

 Sources of power and weakness.

aC s

Sources of power:
vi y re

Good reputation of coffee in the area.

Enough publicity for coffee supplier.
Weakness.
ed d

Need the superior product to protect the reputation.

ar stu

Has limited budget to upgrade the quality of coffee.

Need limited amount of coffee.
is

 Strategy for getting a wise agreement.

In reaching the agreement, the first thing in the strategy is to know the walkaway point in
Th

the deal and maximize the benefits we could get which is to get coffee at same level quality
at reasonable price. And also, utilize the strength we have to seduce Anderson to accept the
bid.
sh

If Anderson reject the offer, we may offer some conditions alternatively to get the target
price or give in. For example, to extend the contract terms, to adjust the cancellation clause,
to raise the price a little bit if Anderson could deliver the products per week, to increase the
volume in the second year if the coffee is appealed to the customers, to offer an adjustable-
price contract.

 Strategy for preserve the relationship

Offer them free advertisement in the Great New York area to give them access to this
potential business area.

https://www.coursehero.com/file/19623466/Negotiation-preparation-document-1/
 Promise them to refer Anderson Coffee to current and future hospitality managers.
Guarantee them with the goodwill and reputation.

 Strategy for efficient negotiation

First round is to offer the target price or wait their first offer. If Anderson reject the offer we
made, we will offer them the conditions and try to know their walkaway point. If they make
the first offer, we will ask them if there is any flexibility and force them to offer us a lower
price.
Second round is to balance the benefits and costs among the 2nd price.
Use silence and be willing to walkaway.
Show them our confidence in the opportunities we could offer to them.

m
er as
co
eH w
o.
rs e
ou urc
o
aC s
vi y re
ed d
ar stu
is
Th
sh

https://www.coursehero.com/file/19623466/Negotiation-preparation-document-1/

Powered by TCPDF (www.tcpdf.org)