The GE International

Contract
Company: Computer System Consultant
Ishfaq Ur Rehman: Procurement Director
Suhas: Sales Director
 Table of Contents
• 4Ps Frame Work- 2
• Power Analysis- 3
• BATNA & ZOPA- 4
• Variables – 5
• Strategic Choice Framework – 6
• Variables Classification – 7
• Planned & Unplanned – 8
• What we could we have done differently - 9
 4Ps Framework
• Purpose: The purpose of the negotiation is to grab the contract as this contract
would be a highly visible success that would likely help us win other private
sector and public sector contracts.
• Product: The targeted output product is not the profit which we earn from other
companies but the desire to work with one of the best company in the world.
• People: Since the GEII has not budgeted the project and they will shift money
from various accounts, we need to involve our Sales Director to explain the
project’s from every prospective to understand them the quoted price.
• Process: Since we have discussed the full plan and step by step process with their
senior manager, we will also discuss and give other options including
maintenance, long term relationship and other affiliated projects.
 Power Analysis
• GE International Inc.
• Strengths
• A well known company in the market
• Strong Hardware & Software System
• Weaknesses
• Software Programmers
• Low budget
• CSC
• Strengths
• Excellent reputation for custom computer programming, manuals preparation and follow up user training.
• Weaknesses
• Lowest quoted price
• Have shared a complete plan for a project.
Develop your BATNA, Walkaway Price i.e.
Reservation Value, and ZOPA
I. To provide us GEII stocks at 15% discount which are valid for 5 years.
II. BATNA was 120,000 to 180,000
III. Payment Terms: Since their project is not budgeted.
IV. Refer us to a contract with a GEII affiliated projects.
V. Since the delivery of the project is 4 months, we will extend the time
duration and will work on other projects as well.
VI. Based on the discreate methods, $180,000 is the ZOPA (Zone of possible
agreement)
VII. After Sales Services for 5 years will be carried out via our company
 Identify Variables on which you are going to
negotiate?
1. Price : We will try to negotiate the price
2. Discount on Stocks
3. Training of our consultants
4. Delivery: We can negotiate the delivery of the project with price.
5. Payment Term since their project is not budgeted.
6. After Sales Services
 Strategic choice framework
• Since this project was important for our company thus we use
creative compromise strategy because
• Importance of issue to use is very high. (Project Importance for our company)
• Concern for other outcome is high. (For long term relationship with GEII)
• Expectation of others strategy is compromised
• Time pressure is low since we have already planned each step
• Quality of alternative is good for us.
Divide the identified variables into essentials,
desirables and possible
• Essential Variables
• Price
• After Sales Services
• Possible Variables
• Discount on Stocks
• Delivery: We can negotiate the delivery of the project with price.
• Desirables Variables
• Securing other GEII affiliated project.
• Payment Term since their project is not budgeted.
 Develop set of options for negotiations [at least 10 options
per team] based on combination of variables
1. The quoted Price of $240,000 with 5% discount on full payment at once.
2. Quoted price of $180,000 with 15% discount on GEII stocks
3. Quoted price of $150,000 with paid after sales services for 5 years
4. Quoted price of $150,000 with training to our consultants and refer us
to a contract with a GEII affiliated project.
5. Payment terms : A total of $250,000 with terms
1. $50,000 in advance,
2. $50,000 in first two months
3. $70,000 at the time of completion
4. $80,000 after 2 months of completion
 Cont.
6. Quoted price of $120,000 with 15% discount on GEII stocks and
training for our employees
7. Quoted Price of $120,000 with 5 years of paid after sales services
along with our reference to contracts with a GEII affiliated projects.
8. Quoted price of $100,000 with
• $50,000 payments within 3 months after completion of the project
• 15% discount on GEII stocks
 Planned & Unplanned
• Planned
• 120,000 quoted price (130,000)
• 5 years After Sales Services (10 years)
• Affiliated Projects

• Planned but didn’t get it

• 15% share on stocks
• Maintenance charges 10,000 per year
 What could we have done differently
• Reduction in price was too fast. We should have negotiated for other
options as well which include stocks.
• We show our company at low position although we have an excellent
reputation for custom computer programming, manuals preparation
and follow up user training which results in low price.