A l z a h r aU n i v e r s i t

y
Faculty of Social Sciences & Ec

Developing Differentiated
onomics

Negotiation Strategies
(Negotiation Strategies toward suppliers Based on Portfolio
Analysis)

Elham Amini
Negotiation Strategies
Instructor: Dr. Khalife Soltani
Dec. 2016
What is a Negotiation Strategy?

Negotiation Styles

Kraljic matrix

Supplier Preference Table

Choose the Best Negotiation Style

What is a Negotiation Strategy?

A pre-determined approach or prepared plan of action to achieve a specific

goal or objective to potentially find and make an agreement or contract in

a negotiation with another party or parties

(how you plan on interacting with the supplier)

Negotiation Styles:
When developing negotiation strategies, a well-established tool
is:
High

Dominating/Competing Problem Solving/Collaboration

(Win-Lose) (Win-Win)

Compromising

Avoiding
Accommodating/Yielding
(Lose-Lose)
(Lose-Win)
Low

Low High
negotiation-behavior matrix
Strategic buyers use two analysis to choose the best negotiation strategy

toward suppliers:

• Kraljic Matrix

• Supplier Preferences table

 Kraljic matrix

Two Dimensions
High

Complexity of Supply Importance of Purchasing

Market
 Scarcity and  size of spending/Total size of spending
 Constant New Technology  Profit
 Cost
- Difficult to produce
- Easy to Start
 Monopoly/Oligopoly
Low

Low High
High Kraljic matrix

• Low value, Low risk

• Easy to Buy
• Supply exceeded demand
• Low business impact
None-Critical
• Standard Product
Purchasing Strategy
Efficiency
Low

Low High
High Kraljic matrix

• High impact, Low Risk

Leverage
• Easy to Buy
• High Importance
• Standard Products
• Many Suppliers
Purchasing Strategy
“Low Price”
Low

Low High
High Kraljic matrix

• Difficult to Buy
• Low Impact
• Special Products
Purchasing Strategy
Bottleneck
“Contract”
Low

Low High
High Kraljic matrix

• High impact, Low Risk

• Hard to source Strategic

• High Importance
• Special Products
Purchasing Strategy
“Form
Partnership”
Low

Low High
High Kraljic matrix

Leverage Strategic

None Critical Bottleneck

Low

Low High
High Supplier Preference Table

• Competitive Position relative to other suppliers

• Attractiveness
Low

Low High
High Supplier Preference Table

• Low Priority & Low Supplier Motivation

• No Development Potential
• Your Bargaining Position Will Be Back

Nuisance
Low

Low High
High Supplier Preference Table

Exploitable

• No Reason to Develop long-term

relationship
• No Priority
• Exploit you by raising prices
Low

Low High
High Supplier Preference Table

Your Business may be small

but supplies see a potential
or wish to associate with
your company
Willing to Invest time and
Development
Effort in the relationship
Low

Low High
High Supplier Preference Table

• Provide superior
service Core
and quality
• Keep customer at all cost
Low

Low High
High Supplier Preference Table

Exploitable Core

Nuisance Development
Low

Low High
 Reference
s
Marquez, A. C., & Blanchar, C. (2004). The procurement of strategic parts. Analysis of a
portfolio of contracts with suppliers using a system simulation model.
dynamics International Journal of Production 88(1), 29–
Economics, http://doi.org/10.1016/S0925-5273(03)00177-4 49.

www.negotiations.com/definition/negotiation-strategy

https://www.mindtools.com/pages/article/newSTR_49.htm

http://slideplayer.com/slide/9344162/

https://www.youtube.com/watch?v=38Gyxy1eBec
Thank
You!