Terracog global positioning system

Conflict and Negotiation on Project Aerial

presented by-
NIDHI SINGH
PRIYANKA PANDEY
VISHAL KHARRA
NITISH SETH
PREETI SAGAR
SHIVANI SINGH
Overview of the Case

 High quality GPS

 Concentrate on outdoor market

 The competitors model “BirdsI”

 Project “Aerial” creates difficulties within the team

People involved…
The Management
 Emma Richardson, Executive Vice President—Richardson was
promoted to Executive VP since January 2008. She began her
TerraCog career in 1996 and has worked in both Sales and
Production. She was instrumental in shifting production from
Taiwan to Shenzhen, China. Richardson has an MBA from the
University of Michigan.
 Ed Pryor, VP of Sales—Pryor started at TerraCog as a National
Account Manager in 2000 and became VP of Sales in 2006. Before
joining the company, he was a category manager for camping gear
at REI. Pryor has a BA in History from UCLA.
 Allen Roth, Director of Design & Development—Roth joined
TerraCog in 2003 after working in product development at Suunto,
Motorola, and Research in Motion. He has a degree in Industrial
Design from Northwestern University and an MBA from USC.
What is the Problem?

 TerraCog has an unstable executive team,that lacks

true leadership, effective communication, and a
consistent vision.
 Inefficient group structure
 No confirmity
 Poor decision making
 Inter department conflict
1. Disagreements on price with the two departments

 Requires hardware and software upgrades

  Higher production costs

 Sales requires Design & Development to cut costs

2. Communication and efficiency problems within the team

 Lack of communication
 Bad cooperation
 Inefficient meetings
  Vice president Emma Richardson does not perform as
prescribed
Factors contributing to the problem

• Design and development had little involvement into the decision

to move forward again with Ariel
• Sales not asked to make recommendations with respect to
reduction of cost.
• Problem of cost discovered late.
• Team not united on common goal
• Not clear what the meeting is about– is it meeting to set a price
point on Ariel-to set a overall marketing plan for the product-to
set an overall strategic direction for new products.
• Group needs time to digest the information about the price
problem.
Conflict is Constructive When...

 Improves decision making

 Stimulates Creativity & innovativeness

 Provides a positive outlet for tension within the group

 An environment where employees subject themselves to self

evaluation and change

 Interactionist view of Conflict: Conflict is not only a positive

force in a group but that it is an absolute necessity for a group to
perform effectively.
 Negotiation Process; recommendations for
organisation
1) Preparation and Planning

2) Definition of Ground Rules

3) Clarification and justification

4) Bargaining and Problem Solving

5) Closure and Implementation

What can the team do?
 Shift People and bring in another leader

 Replace Emma and give her a different position

 Collaborate to satisfy all parties

 Accommodate

 Compromise
Possible Solutions

• Launch Ariel at full price to maintain standard

margin

• Launch at competition price $425 at zero

profit while working on redesign to reduce
costs

• Delay Ariel while working on lower costs re-

design

• Abandon Ariel
Compromise

 Research and Development initial cost cuts of 7 to 8% accepted by

Sales

 In exchange for a restructuring of the sales plan

 The compromise will result in Terracog maintaining their brand

image of providing products that are a step above their competitors
and worth the additional cost
 Thankyou

Any Questions?