SITXMGT501

Establish and
conduct
business
relationships
 Large or small bar equipment for external bar

Task 1: Prepare for negotiations

 Answer the following questions based on the cast study and

your research into the other party.

Q 1: What information must you research before you make initial

enquiries with potential suppliers?
I need to know about identification of risk, include completing a project that does
not meet the functional needs of the business, a project that is delivered later than the
initial programme or a project that costs more than the client’s ability to pay or fund. All
of these risks potentially could have an impact on the client’s core business.
Consequently, a procurement strategy should be developed that balances risk against
the project objectives that are established at an early stage. The nature of the client’s
business and the business case for a specific project should be used to underpin the
basic need for certainty in time and cost.

Cost issues – An assessment for the need for price certainty by the client should be
undertaken considering that there is a time delay from the initial estimate to when
tenders are received. The extent to which design is complete will influence the cost at
the time of tender. If price certainty is required, then design must be complete before
construction commences and design changes avoided.

Q 2: Once you’ve contacted a supplier to negotiate with, research

the people and the organisation. Describe results of your research
and the cultural factors you’ll need to consider during
negotiations.
I have researched Barware.com.au. , Barware.com.au was founded in 2005. The
company was started by a small business named Orpix. Orpix is a Consultancy & Design
firm that is focused on providing top quality designs to bars and commercial kitchens.
Barware.com.au came about as a result of our realisation for a need for a single location
where publicans and bar staff can purchase everything for their bar at very competitive
prices.

Through our experience, we have set some goals to abide by. they aim to:

 Offer a complete assortment of products, including every top brand,

 Create a shopping experience that is extremely intuitive and simple,

 Provide dependable and affordable delivery - backed up by them own distribution

centre, and

 Assist I quickly and efficiently by offering highly responsive customer service.

I'll choose to shop with us because I'll find the products I want and the information I
need at Barware.com.au. We listen to our customers every day - adding new items
they've requested and discontinuing poorly rated products. They continually update
and improve them site, them content, them services, and the site's functionality, based
on the suggestions of them customers. They strive to offer every bar related product
and all the Information about these products and brands for online shoppers. It's a goal
that them customers are helping us achieve through their suggestions and comments.
Them team are working hard to meet my needs. And by offering all these products in
one easy location. I want to negotiate other factors such as delivery times, payment
terms or the quality of the goods. Most business owners would view a good deal as one
that meets all their requirements. But there are many other factors to consider, such as
whether I want to do business with a particular supplier again. Both sides should
conclude a negotiation feeling comfortable and happy with the agreement.
Negotiations can be unsuccessful if either side feels forced into a corner.

Q 3: List and prioritise your objectives, negotiable and non-

negotiable requirements, desired outcomes and BATNA.
NEGOTIABLE

There's a range of key considerations you need to bear in mind when setting objectives
for purchase negotiations. These might include:

 Price
 Value for money
 Delivery
 Payment terms
 After-sales service and maintenance arrangements
 Quality
 Lifetime costs of a product or service
Before I start to negotiate, draw up a list of the factors that are most important to me.

NON-NEGOTIABLE

 Budget

If the non-negotiable factor is the budget, then the BATNA can be change the
organization that provide this options.

Q 4: What concessions (if any) are you prepared to make during

negotiations to achieve your objectives?
Before I start to negotiate, draw up a list of the factors that are most important. With
that in mind, here are some further tips on how to negotiate a deal which includes
setting your objectives, understanding your supplier's position in the market and most
importantly, using the right strategy to meet my desired outcome.

When it comes to negotiating the right deal with my suppliers, it doesn’t always have to
be based on getting what I want at the lowest possible price. There are other benefits I
may want to negotiate – sometimes at the cost of a higher price. Like extended payment
terms, priority delivery, a greater service offering, additional inclusions and certainly a
more favorable quality of products or goods.

Q 5: Decide what roles team members will play during the

negotiations.
Leader, Good guy, Bad guy, Hardliner and sweeper

Q 6: List the internal and external issues that could affect this
business negotiation process. Describe how you would deal with
each one.
Internal Communication

 Business development personnel who must execute corporate strategy with

sales channels and their strategic alliance partners
 Sales, customer service and procurement personnel who are the primary focal
points of contact for client, supplier and provider relations

External Communication
 Engage internal partners in joint problem solving, and to assist you in preparing for
external negotiations
 Avoid having to surprise internal partners with external negotiation outcomes.
 Create and foster internal working relationships that will be required to buttress
your external deal.

Q 7: Who might you seek input from within your organisation

before or during negoations?
Managers and professionals across all disciplines who seek to develop excellent
negotiation skills and achieve beneficial business and personal outcomes. Business team
leaders, especially those who are engaged in cross-functional negotiating teams and are
interacting with external partners or competitors.

Q 8: Who will you communicate the result of negotiations to?

General managers, CEO, boards of directors, Operational management

Q9: Write an agenda for the negotiation. Attach it to this

assessment.
 Conduct some research. Learn about the company and the individuals with whom
you are negotiating. In particular, find out about issues that can influence the other
party’s outcome.
 Know your objectives as well as the objectives of the other party. In a negotiation
meeting, your objective is the agreement you wish to achieve.
 Prepare to provide information to the other party. Make sure you also know what
information you are able to reveal to the other party as well.
 Assess the concessions, the service, item or term you are willing to give up or
compromise. Know about the nonmonetary value and cost of each concession you
have and what it would cost you to adjust one.
 Know the limit of your authority. If applicable, talk to your supervisor or board of
directors regarding aspects of the negotiation you can agree to or compromise
without additional authorization.
Task 2 : Role play

Activity Description
Barware.com.au was founded in 2005. The company was started by a small business
named Orpix. Orpix is a Consultancy & Design firm that is focused on providing top
quality designs to bars and commercial kitchens. Barware.com.au came about as a result
of our realisation for a need for a single location where publicans and bar staff can
purchase everything for their bar at very competitive prices.

As our hotel owner wants to give the job of sourcing all furniture, large and small
equipment, and food and beverage service equipment required for the new dining area.
They strive to offer every bar related product and all the information about these
products and brands for online shoppers. It's a goal that them customers are helping
them achieve through their suggestions and comments. Them team are working hard to
meet my needs.

At negotiation,

The price and the ability to supply the products and services within required time frames
will be import considerations. Any contracts for equipment must include delivery and
installation deadlines, as they continually update and improve them site, them content,
them services, and the site's functionality, based on the suggestions of them customers,
we were able to negotiate to get discount for the installation fee, and allow us to
balance our financial plan.
 Activity C – MAKE FORMAL BUSINESS AGREEMENT
This contract is being signed by between The Imperial Hotel and Barware
Admin

This contract has been made effective as on 01/01/2017 and shall remain
into effect till 01/01/2020

Office Name: The Imperial Hotel

Address: 17 College St. Imperial VIC 2017

Email address: info@Imperial.hotel.com.au

Contact no.: 0397644441

Office Name: Barware Warehouse

Address: 5/4 Kirkham Road, Dandenong South Vic 3175

Email address: info@barware.com.au

Contact no.: 1300 762 858

Terms and conditions of the contract:

First party – The Imperial Hotel Second Party - Barware Warehouse

 Both parties agree to sale furniture total number of, of the first party
within 3 years of warranty.
 The first party shall pay total of $__ to the second party.
 Second party has agreed to set the deadline of the deadline of the
installation to date, 01/02/17

Signatures:

Sarawut Reawcharoenkul: Barware Warehouse:

(The Imperial Hotel) (Barware Warehouse)

 1. According to organisational procedures, provide in the case study in
Activity B, who would you get this approve this contract?

The board, The specialist, The money men, The department head, The
owner.