Sample 2
1.23.2020
Negotiation 2: BioPharm
I. Planning
● BATNA is to build own $25.5 million plant. Product won’t hit market for a year from
ground break which will cost us $12 million. Reservation value is therefore $37.5
million.
● Target??? I don’t know…$35 million?
● A month of waiting costs $1 million.
● Lose $10k if don’t buy land.
● Max I can spend is $40 million.
● They owe $200k in taxes.
● Appraised at $20 million minus 20% (so $16 million). Start negotiations there because
that might be their reservation point.
● Start with small talk and asking why they want to sell the land and when.
Skills to work on:
● Making the first offer
II. Initial Reflection
I am curious why Seltek was so quick to take my offer. The reading said it would make
me feel like my starting offer was too high, and I am now worried about that. I asked if there
were any other liabilities I needed to know about but only after we had agreed to the $16 million.
Admittedly, both of us were confused about the escrow situation in the case.
I still feel like I got a great deal considering my BATNA. My company gets to have a
smooth transition and start production right away. The negotiations were pleasant, and I feel like
we developed a trusting relationship.
III. Final Reflection
I feel I did a good job in learning more about the other company and their goals. Through
my questions, it became clear that they were desperate for us to hire their employees within a 6
month period. If I hadn’t made such a high starting offer, I would have used this as a concession
even though it was what I wanted as well.
Perhaps this is the wrong strategy, but I’ve stuck very closely to what my case tells me I
must do. For example, I did not purchase the patent even though it seemed like I could sell it at a
profit. It seemed like too big of a risk given what my company wanted, but I wish I would have
been bolder on creating value for my company and for the other party.
Over all, I made two big mistakes:
1. I had no idea what my goal should have been, and I was not nearly aggressive enough.
I am still struggling to understand how to set a goal. What factors should be considered
other than BATNA and reservation price?
2. I couldn’t think of a way to justify a lower offer than what they had been appraised, so
I started much too high. Admittedly, I forgot that their book value was $12 million, and I
wasn’t sure what to do with the insured amount. Next time, I will try picking the smallest
number made available in the case and see if I can find a reason to drive it even lower.
The agreement we settled on appeared to be around the average. That was reassuring but
also made me realize that I should have taken more risks.
My counterpart gave me the following feedback: You had good logic and knew what
questions to ask to keep the conversation going. I feel you disclosed candidly. You gave
appropriate information.
______________________________________________________________________________
2.6.2020
Negotiation 4: New Car
I. Planning
My Perspective Best Estimates about the Other Party
BATNA buy from other dealer hold onto the car, they aren’t selling well
RP 12000 points with other 12000 points
company
Target/ 16000 points 16000 points
Aspiration
Assumptions We likely have some things we we want a classier color, we care a lot
are opposite on, but perhaps about extras, we don’t care as much about
some points can be mutually
beneficial audio
Interests 1. Price 1. Price
2. Warranty 2. Warranty
3. Audio 3. Delivery date
4. Airbag levels and 4. Financing
delivery date 5.
5. Financing
6. Color
7. Extras
First Move Want a good price. What are you having trouble moving off the lot?
What’s been popular?
Play up the safety angle (airbags and warranty and high issues). Be more of a
hardliner on these.
Skills to work on:
● Being strategic and smart with my concessions
II. Initial Reflection
● Clear what we both agreed on. She held stronger on price.
● My share of the value was very low. Better than BATNA but barely.
● I felt very pressed for time. Because I got left holding the ball in the last two minutes, I
agreed to something much lower than I would have if I had had time to make another
counter offer.
III. Final Reflection
I chose a strategy in this negotiation that did not pan out. While I did well on the points
that were valued the second and third highest, I really needed to be stronger on the main point of
price. I had hoped pushing hard on other valuable points would offset being more flexible on
price, but it was clear at the end that I had capitulated too easily on my most important item. In
hindsight, I wish I had pushed harder on price and leveraged delivery time better (I cashed that
chip in too soon). A lesson I have learned for next time is not to concede too much on any one
point. It’s too hard to walk it back when you need leverage. I actually ended up with a value
lower than if we had split the difference (though I was able to effectively grow the pie).
My plan for the next negotiation is to be more aggressive. I will not stand on position, but
I’ll make smaller concessions. I think that, in my eagerness to quickly come to a fair and
mutually acceptable deal, I jump to what I can live with while my partner is holding out for what
they want. This puts me at a disadvantage when it comes to claiming value. I also think it will be
helpful to make a starting offer in order to anchor the conversations. I’ve only done it once thus
far and feel I need more practice. Additionally, I think I could have learned more valuable
information if I had asked “why” rather than making statements and hoping they would be
confirmed or refuted.
My counterpart gave me the following feedback: You played the color negotiation well. I
felt like you were making a concession but now I know it was equally beneficial to you.
(Conversely, I felt I could have played this up a bit more).
______________________________________________________________________________
2.13.2020
Negotiation 5: Cartoon
I. Planning
Planning document: Submitted another way. Not available in this sample.
II. Initial Reflection
● It was interesting being on a team. I hope I didn’t railroad my partner too much (I
took her aside to confirm that we were on the same page). Bummer the pairings
didn’t work out, but was still a valuable experience in its own right.
● Glad that I held out on things we wanted even if our opponent had reasonable
interests that conflicted with ours.
● We made some good arguments and didn’t reveal information we didn’t need to.
● We held a hard line, but our opponent conceded a lot and very quickly. Glad for
the practice with this approach, but I was finally ready to fight for myself! I wish I
had been paired with a more aggressive opponent.
III. Final Reflection
I feel that having done the new car negotiation exercise was immensely helpful in setting
us up for this very complicated scenario. I learned from my mistakes and prepared by creating a
spreadsheet that would allow for quick calculations and shaped my ideal scenario as well as two
strong offers of equal value that I could use to suss out interests. During the negotiation, I
remembered not to concede too much at a time or agree on individual factors too early, and I
think these were the keys to success (we claimed a large amount of the value, though weren’t
able to grow to pie as quite much as was possible). For example, I assumed we would end up
with six runs per episode. Even though our opponent made that initial offer, however, we kept
pushing for eight. This push was even stronger when we realized it was more important for us
than for her. We ended up at seven runs per episode and, in hindsight, we could have grown the
pie by trading one more run for paying more upfront. We had asked about how important it was
for our opponent to get more of the money upfront versus all of it spread over the first few years,
but I don’t think I asked in an effective way as it didn’t produce the clarity we were hoping for.
The most important strategy/personal learning objective in this negotiation was to anchor
myself to my goal rather than my BATNA or my opponent’s initial offer. That being said, I felt
that I needed more information about their interests before making an initial offer. While my
teammate and I were asking questions to learn more, we missed the opportunity to make the first
offer. However, rather than adjust our counter offer, we put forward the initial offer we had
already planned and, because we stated it so confidently, it’s almost as if it replaced the actual
stating offer as the anchor.
I feel the professor’s suggestion that I imagine who could benefit if I did well in the
negotiation helped me enter the exercise with a stronger sense of legitimacy. It made the exercise
feel more “real” and helped me make the mental connection between capturing value and
meeting personal goals. I hope this will become a natural state moving forward.
Having had a quick glimpse at negotiating with a partner, I’m curious how to best “divide
up” the work. I’m sure that with more prep time roles can be assigned, but we had to focus on the
essentials of our situational analysis and goals. I think our strength was in taking the time to step
away and consult with each other. I have a tendency to take charge, however, which may not be
a strength in every type of negotiation. I’m eager to learn more about this.