Topic 72
Negotiation: Handling Tight Spots
Topic 72 explores how to handle the tight spots that always arise in negotiations.
A PRIMER ON HANDLING TIGHT SPOTS
- The seller's or buyer's response is beyond unrealistic: What now?
- Remember, in negotiations, an outlandish offer or response or position is some progress.
- The offeror is doing what you want: talking, posturing, negotiating— looking for your reaction.
- You must now look for the offeror's reaction to your reply.
- Do not say “That is absurd” or something more clever.
- Ask for a full explanation of the offer or counteroffer and of the opposing parties’ thinking.
- Explain that you are extremely interested and need to understand their thinking, how they got to where they are.
- Listen very hard, look at their faces, take notes, acknowledge points made, nod your head as you understand.
- Find and rank the weakest, most vulnerable, and consequential elements in the offeror's position—they probably include:
- Assumptions as to risk impact and occurrence
- Understated environmental issues
- Likelihood of scenario occurrences
- Multiple applied
- Discount rate construction and application
- Served market growth rate and forces
- Served market size
- Market segmentation
- Market share capture rate
- Market pricing prospects
- Impact of competitive forces
- Growth effects of as-yet-nonexistent franchise capability
- Success of soon-to-be released products or technologies
- Inflation in costs
- Variable contribution margins and gross margins
- Period cost and operating ...
