Q1. What are E-Power’s interests in this case?

ANS) E-Power is a profit making privatised company and its prime interests are to maintain or raise
shareholder value in a sustainable manner. In the case, its main interest is to acquire a wind turbine
and have it operating quickly because, presumably, it has a need for a working wind turbine on its
offshore field (the need is not specified).

E-Power’s interests are constrained by the need to limit its expenditures even if all its requirements
are met, and limit them even more if they are not. The wind turbines deliver its interests but not at
any price. Presumably, E-Power will search the market if WindGen cannot meet its needs.

Q2. What are WindGen’s interests?

ANS) WindGen’s main interest is to make sustainable profits and maintain or increase shareholder
value.

WindGen only meets its interests if it meets E-Power’s agreed requirements on the delivery date and
some part of its requirement for a warranty. It wishes to reduce its obligations on liquidated
damages as this might jeopardise its profits.

3. What are the negotiable issues in the case and their related priorities for each party?

ANS) Negotiable issues are prioritised because negotiators have varying degrees of preference for
what they want and it is these differences in value of each issue which gives the negotiators trading
possibilities when it comes to proposing and bargaining.

Issues can be prioritised as High (must get or no deal), Medium (would like to get within ranges or it
puts pressure on the viability of the deal) and Low (would like to get, but will not affect the deal).

In this case the issues and priorities for the parties can be shown as follows:

Q4. How might E-Power set its entry & exit points in this negotiation?

ANS) Entry and Exit points are part of the preparation process. They are the ranges within which a
negotiator is prepared to deal. Entry point is where they are willing to start the negotiation and the
exit point is the point beyond which they are unwilling (or even unable) to deal. Entry points should
be defensible and credible.

Q5. What justification would you give for a proposal that E-Power might offer to WindGen?

ANS)

‘If you agree to deliver the wind turbine on site and operating satisfactorily within three months and
accept liquidated damages at 20 per cent, then we could pay more than $900 000 dollars for it’
might be where E-Power would start. It would justify the proposal as meeting its minimum terms –
delivery on time and operating is a prime interest of E-Power. Everything must click because
downtime and late delivery cannot be tolerated in view of the expense of shutting the field for
maintenance and repairs.

The liquidated damages are set high to discourage any ambiguity about E-Power’s requirements, as
are the premium costs for insurance against WindGen’s failures. Narrow force majeure provisions
(‘acts of God’ only) are required to protect E-Power’s interests as are the requirement to pay in US
dollars.