CLINEME 8.

0 – NEGOTIATION & MEDIATION COMPETITION

Dr. Ram Manohar Lohiya National Law University, Lucknow

TEAM CODE : NM24

NEGOTIATION PLAN FOR : TATO Motors Limited

In the matter of :
AdvaniWheels Ltd.
&
TATO Motors Ltd.
STRONG POINTS
 Uniqueness of product: TATO’s CarbonFree™ technology is a unique product in the
market, which produces up to 70 per cent less hazardous emissions than traditional fossil
fuel-based cars.
 Market image as an environment-friendly icon- TATO has a particular focus on
manufacturing environment-friendly vehicles, which has many commercial benefits as
environment impact is an important and trending theme of the automobile industry.
 Tailored to consumer preferences and edge over competitors- The technology is
extremely popular among customers because it has capitalised on consumers' preferences
for traditional engine-based vehicles which have a reduced environmental impact.
 Importance of TATO to AdvaniWheels- Three-quarters of AdvaniWheels' fleet of taxis
comprise the eco-friendly "Advani" cars that use TATO’s CarbonFree™ technology and
it is the popularity of this eco-friendly fleet that has made AdvaniWheels one of the most
successful taxi companies in Noida.
 Synergy between TATO and AdvaniWheels- Paras Tato and Gautam Advani, respective
CEOs of both the companies were good friends even prior to the existence of the Supply
Agreement, and the parties have built a close working relationship over the past four
years.
 AdvaniWheels’ interest in acquiring stakes in TATO- TATO is informally aware of the
board discussions at AdvaniWheels about acquiring stakes in TATO. This could prove
extremely beneficial as it would pump in funds and bring about managerial reforms long
due, like expansion of the repairs team, etc.
WEAK POINTS
 Centrality of the catalytic converters to TATO’s CarbonFree™ technology- TATO's
CarbonFree™ range and thus AdvaniWheels’ eco-friendly fleet are substantially
contingent on the catalytic converters which are now malfunctioning, leading to
AdvaniWheels' obligations to purchase a further 150 vehicles owed to TATO now
standing void, with neither party having a reasonable backup plan presently.
 High stakes- Losing the MotoGP sponsorship deal can negatively impact TATO’s
business prospects with AdvaniWheels, and TATO cannot afford to lose them as a client,
because a major reason for its popularity are its “fantastic Advani credentials”.
 Shortage of resources and time- TATO does not have sufficient members in its repairs
team so as to repair all faulty taxis by the end of December 2022.
 Competition from electric cars- Recent industry reports question the long-term prospects
of the CarbonFree™ technology, due to the potential increase in the use of electric cars.
 Public image- TATO has recently been accused of poor management, with critics
claiming stagnancy in development. If news of this failure with its USP (the
CarbonFree™ technology) gets out, financials of the company will suffer a huge hit.
NEEDS AND INTERESTS
 Helping AdvaniWheels secure the sponsorship deal with MotoGP- The event will attract
much media attention towards AdvaniWheels and, as its central business partner, TATO
stands to benefit from the same. The profits earned will also motivate AdvaniWheels to
carry out investment and acquisition in TATO.
 Preserving the contract with AdvaniWheels- The contract forms a big chunk of TATO’s
finances, and the “fantastic Advani credentials” hype up TATO’s popularity in the
market, hence TATO cannot afford to lose AdvaniWheels as a client.
 Timely repairs- TATO aims to get 75 per cent of the affected “Advani” fleet repaired
within reasonable time by hiring third party contractors to supplement the repairs team. It
plans to replace the catalytic converters of the remaining affected fleet at a price lower
than the normal price, i.e., at $7500, to maintain positive terms between parties.
 Retaining positive reputation- AdvaniWheels wishes to avoid any negative publicity and
maintain its image as AdvaniWheels’ prime partner and more environment-friendly than
its competitors.
BATNA
 In case talks of negotiation fail to reach a favourable agreement, TATO will propose 25%
acquisition to AdvaniWheels’ competitors (such as Rapida, CityTaxi, Hailo, etc.), bring
changes in its Board of Directors, and use the funds pumped in to conduct Research and
Development on the catalytic converters and the CarbonFree™ technology.
 Alternatively, TATO could procure investment from a venture capitalist and use the same
to hire industry professionals for its Board, and then conduct such research and
management reforms.
OBJECTIVES AND GOALS
 The primary objective of this negotiation is to come to an amicable agreement with
AdvaniWheels and reach a viable plan of action to help AdvaniWheels’ secure the
sponsorship position with MotoGP race and preserve friendly terms between both.
 Another objective would be to ensure AdvaniWheels’ acquisition of 25% stakes in TATO
Motors and, with the funds pumped in through the acquisition, a Research Team would
be constituted to further develop the CarbonFree™ technology to prevent such
malfunctions from happening again.
THE END