Negotiation Strategy Framework 1683120054

Negotiations Strategy and Execution (Templates)
Toolkit II — Negotiation
Strategy and Execution
(Templates)
• Step 1.0 — Templates 1.1 - 1.2

• Step 2.0 — Templates 2.1 - 2.10
• Step 3.0 — Template 3.1-3.2
Data and information in this document need to be tailored

To specific sourcing initiatives
Toolkit II — Negotiations Strategy and Execution (Templates) Step 1.0 - Negotiations Objectives
Template 1.1 — Internal/External Negotiations Drivers
1.1 — Internal External Negotiations Drivers
Internal Drivers External Drivers

• •
• •
• •
• •
• •
• •
• •
Toolkit II — Negotiations Strategy and Execution (Templates) Step 1.0 - Negotiations Objectives
Template 1.2 — Sourcing and Vendor Objectives/Wants
1.2 — Sourcing and Vendor Objectives/Wants
What the Vendor Wants What Sourcing Wants

• •
• •
• •
• •
• •
• •
Toolkit II — Negotiations Strategy and Execution (Templates) Step 2.0 - Negotiations Preparation
Template 2.1 — Sourcing and Vendor Objectives/Wants
1 Weak Background
2.1 — Negotiation Team Selection 5 Strong Background
Role to Be Played in Team
Team Roles
• Lead Negotiator 1 1 1 1 1
• Warehouse Professional 1 1 1 1 1
• Finance Representative 1 1 1 1 1
• Quality Representative 1 1 1 1 1
• Service Representative 1 1 1 1 1
• Other __________________ 1 1 1 1 1
Team members can assume dual roles if there are limited resources
Template 2.2 — Visioning Objectives

2.2 — Visioning Objectives
Supplier: ____________________________ Expected Date of Negotiation: _________________________

Rationale
Where Are We Applicable to This

What Do We Want? Today? How Can We Close The Gap? Negotiation? Priority
Template 2.3A — Sourcing Negotiations Range
2.3A — Sourcing Negotiation Range

Supplier/Site:
Categories Needs Wants
Pricing
Terms and
Negotiation
Conditions
Range
Services Required
Least Acceptable Agreement Most Desired Outcome (M.D.O.)

(L.A.A.)
Template 2.3B — Vendor Negotiations Range
2.3B — Vendor Negotiation Range

Supplier/Site:
Categories Needs Wants
Pricing
Terms and
Negotiation
Conditions
Range
Services Required
Least Acceptable Agreement Most Desired Outcome (M.D.O.)

(L.A.A.)
Template 2.4 — Sourcing and Vendor BATNA
2.4 — Sourcing BATNA
•
•
•
2.4 — Vendor BATNA
•
•
•
Template 2.5A — Negotiations Strategy Worksheet (Supplier Benefits)
Supplier Benefits “For each vendor,what are…”
Seller/Title Seller Role(s) Benefits from getting our business
5
Template 2.5B — Negotiations Strategy Worksheet (Hot Buttons)
Hot Buttons
Seller Receptivity
This Seller's Hot Buttons Benefits from Addressing their Hot Buttons to our MDO
Template 2.5C — Negotiations Strategy Worksheet (Vendor

Objectives/Criteria)
Vendor Objectives/Criteria
Need Want Relative

Issues (LAA) (MDO) Importance
6
Template 2.5D — Negotiations Strategy Worksheet (Messages)
“What repeated messages best increase

Messages our probability of reaching our MDO”
Selected Messages (Use Single Word or Short Phrase)
5
Template 2.5E — Negotiations Strategy Worksheet (Our Leverage)
Our leverage
Supplier's Competitors Competitor's Competitor's

Strengths Weaknesses
•
Buying Power “our demand relative to supplier’s available capacity”
•
Demand of other SG buyers
Others
•
Template 2.5 — Negotiations Strategy Worksheet (Additional

Information)
Summary of Negotiating Issues/Levers
•

Information)
Potential Actions to Leverage Our Strengths or to Eliminate Red Flags
•

Information)
Plan for Negotiating Session
Objectives
Timing
Template 2.5 — Transpose work from previous pages to this single

sheet
2.5 — Negotiations Strategy Worksheet
Red Flag”: missing or unverified information,
Supplier: Estimated value of this initiative: Date: uncertainties, or vulnerabilities.
Supplier Benefits Hot Buttons

“For each vendor, what are…”
Receptivity
A Personnel/Title Rate(s) Benefits from getting our business B Supplier’s Hot Buttons Benefits from Addressing their Hot Buttons to our MDO
Our leverage
E Supplier's Competitor's Competitor's
C Competitors Strengths W eaknesses
Vendor Objectives/Criteria D “What repeated messages best increase

•
Messages
Need W ant Relative our probability of reaching our MDO”
•
Issues (LAA) (MDO) Importance
Selected Messages
(Use Single W ord or Short Phrase) Buying Power “our demand relative to supplier’s available capacity”
1
1 •
2
Historical Relationship
2
3
•
3
4 •
4
5 Others
5 •
6
Summary of Negotiating Issues/Lever s Potential Actions to Leverage Our Strengths or to Eliminate Red Flags Plan for Negotiating Session
“Likely to come up during sessions”
Objective
s
• •
• •
Participant
• • s
• • Timin
g
• •
Template 2.6 — Key Negotiations Messages
2.6 — Key Negotiations Messages
Functional Role Negotiating Role Key Messages

Template 2.7 — Roles/Responsibilities of Sourcing Negotiations Team

Members
2.7 — Roles/Responsibilities of Sourcing Negotiations Team Members
Functional Role Name Negotiating Role Messages

Template 2.8 — Sequence of Negotiations
2.8 — Sequence of Negotiations
Number Of
Round Vendors Objectives Date
First Round
Follow-Up
Communications
Second Round
Subsequent Rounds
Template 2.9 — Timing of Negotiations
2.9 — Timing of Negotiations
Month _______________________
Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Template 2.10 — Checklist
2.10 — Checklist
◼ Established the vision — Template 2.2 
◼ Developed MDO, LAA, BATNA (negotiation ranges)

• Sourcing — Template 2.3A, 2.4

• Vendor — Template 2.3B, 2.4 
◼ Completed the Negotiations Strategy Worksheet — Template 2.5 
◼ Developed the key negotiations messages — Template 2.6 
◼ Scripted the roles of each team member — Template 2.7 
◼ Planned the sequence and timing of negotiations — Template 2.8 - 2.9


Template 3.1 — First-Round Vendor Observations
3.1 — First-Round Vendor Observations Date: _________
Company Name: _____________ Overall Rating (Scale of 1 – 10): _
Attendees/Role
• •
• •
Strengths Additional Discoveries

• •
Weaknesses Action Plan

• •
Template 3.2A — First-Round Negotiation Results
3.2A — First-Round Negotiation Results

Vendor Capabilities And Expansion Performance Measurement Contract Pricing
Template 3.2B — First-Round Negotiation Results
3.2B — First-Round Negotiation Results Vendor _______________________
Capabilities And Expansion Performance Measurement Contract Pricing
Wants
(MDO)
Needs (LAA)

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Negotiations Strategy and Execution (Templates)

• Step 1.0 — Templates 1.1 - 1.2

Data and information in this document need to be tailored

Template 1.1 — Internal/External Negotiations Drivers

1.1 — Internal External Negotiations Drivers

Internal Drivers External Drivers

Template 1.2 — Sourcing and Vendor Objectives/Wants

1.2 — Sourcing and Vendor Objectives/Wants

What the Vendor Wants What Sourcing Wants

Template 2.1 — Sourcing and Vendor Objectives/Wants

Template 2.2 — Visioning Objectives

Supplier: ____________________________ Expected Date of Negotiation: _________________________

Where Are We Applicable to This

Template 2.3A — Sourcing Negotiations Range

2.3A — Sourcing Negotiation Range

Categories Needs Wants

Least Acceptable Agreement Most Desired Outcome (M.D.O.)

Template 2.3B — Vendor Negotiations Range

2.3B — Vendor Negotiation Range

Categories Needs Wants

Least Acceptable Agreement Most Desired Outcome (M.D.O.)

Template 2.4 — Sourcing and Vendor BATNA

2.4 — Sourcing BATNA

2.4 — Vendor BATNA

Template 2.5A — Negotiations Strategy Worksheet (Supplier Benefits)

Supplier Benefits “For each vendor,what are…”

Seller/Title Seller Role(s) Benefits from getting our business

Template 2.5B — Negotiations Strategy Worksheet (Hot Buttons)

Template 2.5C — Negotiations Strategy Worksheet (Vendor

Need Want Relative

Template 2.5D — Negotiations Strategy Worksheet (Messages)

“What repeated messages best increase

Selected Messages (Use Single Word or Short Phrase)

Template 2.5E — Negotiations Strategy Worksheet (Our Leverage)

Supplier's Competitors Competitor's Competitor's

Buying Power “our demand relative to supplier’s available capacity”

Template 2.5 — Negotiations Strategy Worksheet (Additional

Summary of Negotiating Issues/Levers

Template 2.5 — Negotiations Strategy Worksheet (Additional

Potential Actions to Leverage Our Strengths or to Eliminate Red Flags

Template 2.5 — Negotiations Strategy Worksheet (Additional

Plan for Negotiating Session

Template 2.5 — Transpose work from previous pages to this single

Supplier Benefits Hot Buttons

Vendor Objectives/Criteria D “What repeated messages best increase

Template 2.6 — Key Negotiations Messages

2.6 — Key Negotiations Messages

Functional Role Negotiating Role Key Messages

Template 2.7 — Roles/Responsibilities of Sourcing Negotiations Team

2.7 — Roles/Responsibilities of Sourcing Negotiations Team Members

Functional Role Name Negotiating Role Messages

Template 2.8 — Sequence of Negotiations

2.8 — Sequence of Negotiations

Template 2.9 — Timing of Negotiations

2.9 — Timing of Negotiations

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Template 2.10 — Checklist

◼ Established the vision — Template 2.2 

◼ Developed MDO, LAA, BATNA (negotiation ranges)

◼ Completed the Negotiations Strategy Worksheet — Template 2.5 

◼ Developed the key negotiations messages — Template 2.6 

◼ Scripted the roles of each team member — Template 2.7 

◼ Planned the sequence and timing of negotiations — Template 2.8 - 2.9

Supplier: ____ Expected Date of Negotiation: _