Summary

Reflecting at the BioPharm-Seltek negotiation process where the former was purchasing plant building and land that was being disposed of by the latter, I think the negotiation was a huge success. Both I as the chief financial officer (CEO) of Seltek and my partner the CEO of BioPharm left the satisfied with the outcome of the completed deal. While my partner had intended to make the first move, I was much quicker in initiating the negotiations and offer to dispose of the plant at the cost of $20 million. In making the first move, I was able to gain the first mover advantage as it enabled me to accomplish my ZOPA in the process of protecting my BATNA. The negotiations ended with both parties agreeing to close the deal at $16 million with my BioPharm agreeing to retain key staff for one year and Seltek agreeing to settle the $200,000 property tax.

Analysis

As learned from the course, negotiation is a critical process whose outcome has a lot of impact on the activities of the firms involved in the process. As a negotiator, it is critical to ensure that one not only has the right information concerning the other party or at least what they think the negotiating partner position will be, it is vital to ensure that one equally knows their position very well. This means that a negotiator should be prepared adequately on how to respond to issues likely to emerge in the negotiating table.

By being swift in making the first move, I was able to reveal my zone of possible agreement (ZOPA) quite early in the negotiation process which enabled me to protect my BATNA. According to Shell and the anchoring strategy, being the first one to make an offer allows one to take charge of the proceedings due to the unconscious effect first offers have on the other party. Though my company, Seltek was eager to sell the plant assets, making the first move and offering dispose the assets at $20 million played to my advantage as it meant that my partner could not offer to but the company at $8 million as valued by the insurance firm. To my expectation, my partner came with a much favorable counter offer of $13 million that allowed me to go for the current market valuation of the plant at $16 million and the value of the land as well as the benefits the acquiring firm will get obtain from retaining the employees during the transition period. In the end, we agreed to settle the deal at $16 million with BioPharm agreeing to keep employees for one year and Seltek offering to pay the property taxes.

Thinking back about the outcome of the BioPharm-Seltek negotiation, I think having prepared adequately for the negotiation process had a lot of impact on the result of the activity. Before going to the negotiation process, I remember reflecting on how I could respond to various positions from my partner. Focusing on selling the plant at the highest prices possible as my BATNA while the real goal was to dispose of the plant as soon as possible enabled me to be quick and swift in the negotiation process. I had not made the first move; I could have ended, maybe selling the plant at prices lower than $13 million.

Key lessons from the Simulation

From the outcome of the negotiation process, I have come to fully appreciate Shell’s first mover and anchor strategy as a fundamental approach to follow in the negotiation strategy. From the manner, I controlled the proceeding despite knowing my partner’s reservation price enabled me to focus on my own goals which was to sell the plant at the highest price possible and at the shortest time possible while protecting the interests of the workers at the same time. Additionally, I have learned why it is essential to prepare and plan adequately before engaging in a negotiation process. Not only does one acquire relevant information, but planning also makes one remain confident and calm throughout the negotiation process.

Swiftness in initiating conservation by quickly throwing the offer before the other has responded to the salutations has a significant impact on the outcome of the negotiation process. While I knew my partner’s goal was to purchase the plant at around $8 million as valued by the insurer, making the first moving and offering to sell the plant at $20 million meant that my partner had no alternative but to raise their counteroffer. Given the success of the outcome of this negotiation activity, I think making the first move in a negotiation process is extremely important. The success of the outcome means that concept’s from Shell’s first mover and anchor strategy should always be explored at great length in preparing for a negotiation process.