Sample Negotiation Plan For An Emerging Market – Asia

Negotiation Strategy

The shifting of companies towards emerging markets is inspired by promising opportunities for increased sales and the penetration of domestic markets that have high growth potential(Cavusgil, Ghauri, & Agarwal, 2002). To negotiate effectively and the best deal for our product launch, the company’s negotiating team and the negotiating partners from Asia need to see efforts towards collaboration in an environment that fosters mutual trust and respect. As the company’s negotiation team leader, it is my responsibility to ensure that the negotiation team is well prepared by carefully engaging the most suitable people who can clearly define the company’s objectives. This will further ensure that we have a good balance of both technical and human resources on the negotiating table and on standby to offer any support to the process such as translators, local counsel, and decision-making authority on issues at hand, tax advisors, and legal drafters.

The members of the negotiation team will then be tasked with reviewing all of the company’s relevant historical dealings in Asia. In order to mirror their interests, scope of authority, priorities, and limitations, the negotiation team will be required to learn as much as there is to know about their counterparts from the Asian team including the commercial context that they operate.Together, the Asian negotiation team and the company’s negotiation team will explore the legal requirements that would govern the deal being brokered in relation to launching the company’s product.

The company’s negotiation strategy will ensure it takes into account the cultural differences that are likely to emerge in dealings with Asia. Since there is value in being able to deal well with difference, the negotiation team will be educated and appraised on their understanding of Asia’s local business practices. As a team, we will ensure that we remain sensitive of our assumptions and habits rooted in culture in relation to conducting business while questioning and probing the assumptions the Asian’s negotiation team may be making about our company.

Since deals tend to be evolving commitments that can go on over a lengthy period of time even as circumstances change, the company’s negotiation strategy will endeavor to cultivate a reliable working relationship with Asia. This will make it easier for the company’s team and Asia’s team to address any future needs both effectively and efficiently. Upholding integrity and ensuring transparency in the dealings, will give the issues of substance on the negotiation table more attention, which will allow solutions to be found.

Alignment with current best practices

This negotiation strategy will leverage growth, innovation, and leadership from the company’s side. It will endeavor to customize models from Asia that are based on criteria that hold importance to the company’s business.The strategy will ensure that the process allows for continued monitoring of the market systems in order for the company’s team to pick out changes and opportunities that would be of interest to the company.Ultimately, thenegotiation strategy will take on an immersive approach through networking with emerging market experts and industry peers.

Facilitates open communication

By remaining flexible, the company’s negotiation strategy will ensure that both parties receive proportionate and mutually beneficial outcomes from the brokered deal. Flexibility will allow for thinking that is more creative by both sides of the negotiations, ensuring interests are complimenting of each other’s, and that everyone is satisfied and remains valuable to the process(Cavusgil, Ghauri, & Agarwal, 2002). As a team, our negotiating strategy seeks to be understanding of difficulties being faced by Asia and its negotiating team; this would be integral to brokering a practical and sustainable deal. Throughout the negotiation process, the company’s strategy will revolve around making commitments that are realistic, agreeing only to activities the company intends to undertake while ensuring the Asian negotiating teams does not overstate their mandate or commit to things beyond their scope of authority.

Explanation of the five stages of negotiation:

  1. Preparing and planning: This stage involves the collection of all information needed in order to plan for an effective negotiation. This may include the historical data or information on the partners’ previous dealings in an attempt to figure out their interests, priorities, and likely offers.
  2. Defining ground rules: This stage addresses the procedures and rules to be followed through the process, it limits the issues of discussion, provides a timeline for the process, provides the venue and gives the indication for the way forward whether a deal is arrived at or not.
  3. Clarifying and justifying: This is the heart of the process as the specifics of the negotiations are discussed including issues of price where each negotiating party makes their position known, support their position and make their requests accordingly.
  4. Bargaining and problem solving: This stage calls for compromise and flexibility from all parties involved since suggestion and changes are likely to be made to proposals that were made earlier, this back and forth is expected to continue until an agreement is finally arrived at.
  5. Closing and implementing: Once an agreement is arrived at, written records are produced together with schedules that outline the implementation agreement including how the implementation process will be measured. If the records are satisfactory to all parties involved, then they are signed and become binding.

Planned Negotiation Tactics

While employing the distributive type of negotiation, my team and I will incorporate the following tactics for maximum effect during the negotiation process. We intend to gain both positional and quantitative advantage(Cavusgil, Ghauri, & Agarwal, 2002). By handing over some of our offers, we hope the other team will be forthright with their demands in which case we will be prepared to accept or request for some revision. In case they choose to play hardball with their demands, we would have to hold ground and play bad cop/good cop by lobbying with counterparts that are more sympathetic to our offer. During the negotiations, we intend to narrow down the issues from those that are easy to agree to the ones that are most important, while making additional requirements whenever important concessions are to be made. By offering to disclose our budget and making small alteration, we hope to identify the Asian team’s point of resistance and reservation price. By holding on to the “best” offer we have, we hope that the other teams finds it fair and does not become aggressive pushing for offers that we cannot commit to. Without totally disempowering the Asian negotiating team or jeopardizing the negotiation process, my team will ensure that: in the initial stages of the negotiation we gain some supremacy, collect as much information that is unlikely to be disclosed, reinforce our negotiating power throughout the process and maintain reasonable level of control over the negotiation process.

External Factors likely to affect the company’s global negotiation plan

The environment, time, hierarchy, information, personalities, and other personal issues are the most likely factors that could have a significant effect on the negotiation process and potentially the outcomes of the process. Due to the critical role of time in international business negotiations, issues like deadlines, inaction, or urgency may have either a positive or a negative impact on the process of negotiations(Cavusgil, Ghauri, & Agarwal, 2002). If the negotiating partners are not on the same level of expectations culturally and professionally, there is likely to be problems in the process. So is the case if the environmental setting does not match the nature of negotiations, or the number of people present for the negotiations, their temperaments, and their behavior. Members of the negotiating teams should ensure they are well furnished with relevant information.

It is important to note that there exists a challenging paradox in the nature of emerging market companies. This contradiction becomes clear in the facts that not only are these companies’ early movers in the budding sectors of a domestic market, but they also are in many ways, latecomers entering a field controlled by topnotch competitors in industries that are globally mature. These world-class competitors often have the great advantage of capabilities honed over decades. To ensure success, emerging markets companies need to engage their established advantage in execution that is necessary in capturing early mover gains; speed, flexibility, risk tolerance and vision. Beyond execution, they should endeavor to develop their capabilities; organizational and strategic ambidexterityto compete effectivelywith theworld-class competitors(Khanna, Palepu, & Sinha, 2005).

Since emerging markets are always in flux, institutional voids are to be expected. Other external factors such as regulatory challengesare to be anticipated, because the regulations change frequently and are more often than not imperfect. Infrastructural underdevelopment is another area of challenge and in this case, lack of basic market data or reliable information is likely to affect the company’s global negotiation plan. Competition from local players could also pose as a challenge especially because these competitors have an unrivaled understanding of the local markets and can easily leverage personal relationships in their negotiation processes.To overcome some of these external challenges it would be necessary to have local partners and/or networks from whom they can learn or collaborate in finding solutions that are practical and can work around problem or challenges faced(Khanna, Palepu, & Sinha, 2005). This would call for building relationships with stakeholders, including government officials from Asia.

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