All through 2010 to August 2014, a bloody patent war transpired between two of the biggest companies in IT and the smartphone industry. What began as a way of Apple reclaiming royalties for a copycat activity, dragged on to the court and outside court sessions of mediation in the hopes of finding a deal that would sufficiently satisfy both parties. Right from the start of the negotiating cycle, Apple was clear that all it wanted was an amicable out-of-court licensing deal that would see payment for innovation used and, to maintain a good working relationship with Samsung, which was the company’s main component supplier. Jobs decided to employ a problem-solving strategy that would guarantee a win-win situation for his company (Staff, 2019).

Samsung on the other hand, knowing that they were most likely to be the losers in the deal, decided to refuse the agreement entirely and stick to the litigation process. They aggressively jumped on this idea because the court proceedings proved not to have any effect on the sales of the controversial products. If anything, the publicity was a boost to both businesses marketing plans as they continue to reap big in their respective sales departments.

However, with potential damages on both companies seeming too high and too expansive, this realization prompted the two companies, with the help of a few judges and the threat of penalties from both sides, to sit down and negotiate deals that would be better for both companies. Samsung and Apple CEOs decided to abandon their hard positional techniques and contending strategies aimed at self-enrichment and adopted the problem-solving approach that would see all companies continue to do business with each other (Staff, 2019). The critical elements of the agreement were reasonable rates for Apple to pay, considering that Samsung supplied Apple with close to a third of its total components and a considerable settlement for Samsung’s use of Apple’s innovations.

Impact of Planning

Before the agreements for settling the disputes between the two companies, Samsung decided to stick to the litigation path and dismissed the approach suggested by Apple. Samsung’s extensive research before coming to the negotiating table is the best explanation for this aggressive position. The company knew all too well that its products had imitations from Apple’s latest release and knew that settling it out of court would mean that they would have to pay vast amounts of money and give up the sale of those products. The company executives were also aware that they had a strong negotiating position being the top supplier for Apple’s smartphone components, and, moreover, that they had a case against the Apple’s use of ideas without permission. With this knowledge, Samsung pressed on in the court’s side, knowing it would take long, while it continued to make significant sales on the products in question.

Apple, on the hand, knew its strong position as a consistent pacesetter in invention and innovation in the industry. It then wanted to capitalize on those factors by pressing on Samsung to stop using its technologies based on the claim that it significantly reduced its sales in the market. Apple prepared extensively by prioritizing their favorable outcomes which were; to maintain the services of Samsung as its primary supplier, in the long run, to get significant royalties for the use of its latest technologies, and, to pay the least possible amount to Samsung in an out-of-court negotiating session. In the long run, Apple was able to achieve most of its objectives most especially because of the extensive research and its prioritization. The initial planning conducted by the executives led by the CEO impacted the process significantly although it took a long time (Staff, 2019).

Lucasfilm and Walt Disney negotiation

In 2012, George started talks with Walt Disney about the possibility of selling the Lucasfilm Company. The talks were to last a year possibly to guarantee that both parties went home with a win. Lucas was planning an exit from the film industry into retirement and began plans to improve his BATNA by ensuring he landed a good deal for his life’s work. In light of this, Lucasfilm as a company did not press on the highest amount of money but instead focused mostly on the continuation of the entity’s legacy (Staff, 2019). Lucas also needed to a guarantee that he would maintain the ownership of licensing and merchandising rights. It was crucial for him that the next administration consider his creative addition to the following episodes in his famous saga, Star Wars. To improve his BATNA, Lucas hired a president, a writer and began works for the sequels.

Disney Company, represented by the CEO Iger, understood the potential investment that was Lucasfilm. Therefore, the company approached the matter with a yielding strategy. They agreed to comply with most demands made by Lucasfilm. They were able to do this building a level of trust with the business to ensure that trusted their word to maintain the principles and visions of the Lucasfilm and improve those ideas. Walt Disney improved this strategy by placing an irresistible offer and giving George enough time to make him feel that Disney meant nothing but the best for the famous animation company. They also offered Lucas a position at Disney to guarantee him swift transition and a specified focus on the vision he had for his firm. This approach convinced Lucasfilm, and the two companies signed a deal that led to the transfer of ownership of the company.

Impact of Planning

In preparation for the sale, Lucas did extensive research and ensured that his company was more appealing and that all structures maintained an attractive, functional outlook. During the planning period, Lucas also realized that hiring a new president and a writer and, beginning works for the next movies was strategic and would bolster the chances of a successful sale. He needed to ensure that his vision remained, and the staff together with the actors did not lose their roles. It was crucial for him that the company stayed intact as a unit to secure his treatments for the sequels (Shonk, 2019).

Walt Disney, also, made sure that they did extensive research on the needs and interests of Lucasfilm before engaging them and entertaining the idea of buying the company. Firstly, it was evident that Lucas was a planning an exit out of the animation scene and considering retirement. They also discovered that Lucasfilm’s main concern was its legacy and continuation and not money as earlier perceived. It became evident to Iger, Disney’s chief representative that chipping in a position at Disney’s decision-making table would convince Lucas more than a pay rise. They also considered his demands to retain ownership of certain rights regarding merchandising and licensing. This early preparation to yield and submit to most of the requirements of Lucasfilm was a long-term plan to secure the future investment after careful marketing predictions.

Comparison of Negotiation Strategies

In the first business situation involving Apple and Samsung, the standoff was a result of both companies’ use of hard positioning tactics, where both parties wanted to demonstrate their superiority in the matter. Apple and Samsung all knew their interests and researched extensively on their contender’s faults, and weaknesses on the case and each chose to pursue paths that produced more favorable outcomes for themselves. Apple chose a more reliable option, which was to settle the matter without involving the courts, as it also needed to retain the relationship with the other party, being its main supplier (Shaughnessy, 2019). On the other hand, Samsung’s interests had deep roots in the sale and profitability of its latest products that bore a lot of resemblance to Apple’s smartphones, which, was the main bone of strife between the two.

Unlike the hard positioning tactics used by Apple and Samsung in the quest to safeguard their interests, the yielding approach used by Walt Disney in the acquisition of Lucasfilm was a calculated move to ensure that Disney eventually took ownership of Lucas’s treasured animation business. Walt Disney was able to achieve that by looking at prospects and factoring all the demands made by the owner. They then realized that the profits they would make would supersede their investment prompting to finalize their deal quicker.

Yielding is a strategy that is crucial when a corporation is confident that it would be unwise to lose an investment, especially if the value of the business is set to increase exponentially in the foreseeable future. It can also be applicable when a company does not want to drag a negotiation whether an acquisition or a settlement of a dispute that would spark a social uproar. However, the strategy to contend would be more suitable if a company is sure that yielding or compromising would result in unfathomable but avoidable losses. This strategy also works when publicity can increase the overall of a corporation. Refusing to bend to the demands of other parties in a dispute would take a lot of time to settle. Other companies would use this opportunity to further their selfish agendas as in the case of Samsung where it counted on the dragging on of the case to allow it to sell most of the products in question.

References

Shaughnessy, H. (2019). Apple And Samsung Resume Patent Negotiations, After Apple Presses On The Jugular. Retrieved from https://www.forbes.com/sites/haydnshaughnessy/2013/12/29/apple-and-samsung-resume-patent-negotations-after-apple-presses-on-the-jugular/#73e63e9973f1

Shonk, K. (2019). Star Wars Stories: George Lucas and a Strong BATNA, Passed Over. Retrieved from https://www.pon.harvard.edu/daily/batna/star-wars-stories-george-lucas-and-a-strong-batna-passed-over/

Staff, P. (2019). Example of Negotiation in Business: Apple and Samsung’s Dispute Resolution Case Study. Retrieved from https://www.pon.harvard.edu/daily/business-negotiations/apple-v-samsung-an-example-of-negotiation-in-business-gone-bad/

Staff, P. (2019). The Star Wars Negotiations and Trust at the Negotiation Table. Retrieved from https://www.pon.harvard.edu/daily/business-negotiations/a-forceful-deal-george-lucas-puts-his-trust-in-disney/

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