CASE STUDY

ZINC-IT CASE NEGOTIATION

In this case study where we had to do negotiation with

others, there are three roles in this case: (i) Zinc-It: that
is, the Zincit team representative; (ii) Amal Hasan: the
inventor; and (iii) Sam Massey: Hasan’s lawyer.
I chose to be Dr. Hassan, my sister played the role of
Zincit representative and my friend played the role of
being Hassan’s lawyer.

While doing the evaluation of Zincit alternatives, it is

important to analyze the options through different
techniques. Though in many cases, it is difficult to
analyze the feasibility of the options especially the
intangible factor, however, quantifying the maximum
option is important, in order to develop a clear image
and understanding of option that will address the
problem.
Option A, which is 25 and 25 is $5 million better for
Hasan than not doing the deal which is worth 20 to him.
And for the buyer, the buyer is willing to pay 30. So at
30, that's his reserve price. He's indifferent between the
deal and walking away. And so 25 for him is $5 million
better than no deal at all.
Let's look at option B. Option B is worth $29 million to
Hasan. So therefore, that's 9 better than no deal. But
since option B only costs the buyer $21.5 million, that's
$8.5 million better than no deal. So option B is 9 for
Hasan, 8.5 for the buyer.
Option C is 26 for Hasan, so that's 6 better than no deal.
But since option C only costs 21 million, it's 9 million
better for the buyer compared to no deal at all.
Option D again, is worth 26 to Hasan, so that's 6 better
than no deal. But since it only cost the buyer 18.5, that's
11.5 better than 30. And so from the buyer's
perspective, option D is a value of 11.5.
And lastly, option E is worth 24 to Hazan, so that's 4
better than 0. And from the buyer, paying 14 is 16
better than paying 30.

In one of my case the expected payoffs were as follows:

Dr. Hasan: $19.00M

Sam Massey: $1.00M
Zincit Rep: $0.00M
In order to give some amount of insight into the
outcome of my negotiation relative to the rest of class, I
compiled statistics for the various roles, below.

 Sam Massey: Mean $2.3M; Standard deviation:

$8.7M. My outcome: 0. Here, standard deviation is
less than the mean.

 Dr. Hasan: Mean $28.5M; Standard deviation:

$13.7M. My outcome: 1. Here, standard deviation
is less than the mean.

 Zincit Rep: Mean $6.8M; Standard deviation:

$12.8M. My outcome: 1. Here, standard deviation
is less than the mean.

But lastly we all agreed on the package C. In package

C, 20 million dollar would be the upfront and the bonus
if the FDA approves will be 10 million dollar, expected
values are 26 million dollar / nine million dollar.
Thus Hasan would get $20m upfront, the same as he
gets from no deal plus a $50m bonus for approval.
Zincit would pay $20m upfront and earn zero if the
drug is not approved and $50m if it is approved.
In this case, the value of the deal is $20m + 60% ×
$50m = $50m to Hasan and 10% × $50m = $5m to
Zincit. The combined value of the deal is $55m to the
two of them, which is $35m better than the $20m result
of no deal and going with Zums. Thus the pie created
by this deal is $35m.

THANK
YOU