Analysis of the Case Study on Negotiation Strategies

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Negotiating is an art and an indispensable business skill. As the business environment gets competitive, and market segments fragmented, significance of negotiating skill cannot be neglected as it tends to draw a fine line between being compromising, losing, winning or ending the situation in mutually beneficial circumstances. From the given case study, it is apparent that the situation depends on negotiation as Levon intends to purchase Zenur, the entire process, smooth transition, documentation, and changes heavily depend on the way and manner Levon negotiate with Zenur.

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Distributive Negotiation

Research indicates two basic yet important strategies for negotiating. First one is the distributive negotiation, second is integrative negotiation. Distributive Negotiation is referred to as hard-bargaining negotiating. Usually, there are certain situation in which this particular type of negotiation is found to be useful, for example, when there is single, solid issue, and one is right and the other one is weak. In this situation, one has to be a winner, as the counter party is already on the losing side. Nevertheless losing side is under debt for the winning party. However, this type of negotiation strategy cannot actually help Levon to win over Zenur, as Zenur, itself is a huge business generating millions annually.

Integrative Negotiation

The need is to have Integrative Negotiation. This type of negotiation is based on the situation in which both parties take away something from the deal. It is referred to as win-win situation. Linking it to the current case, it is multi-million dollar transaction and in this deal, autocracy or being dominating will hurt the sentiments, and obviously putting the deal into a situation to lose can hurt the overall strategic objectives of the business. Keeping in mind, integrative negotiation strategy is feasible for Levon. This particular type involves interests, merit, and principle for negotiation. Within this strategy, Levon and Zenur, the two parties involved in the transaction and deal may walk away with their interest, what they believe is merit based on principle.

Additionally, acquiring another company requires negotiating on multiple aspects, for example, current assets, current liabilities, debtors, suppliers; future of employees, as well as brand image etc. with integrative negotiation, multiple issues can be discussed, as it allows the parties to involve multiple moving parts instead of just focusing over a single issue. With integrative negotiation strategy, Levon can actually offer and counter offer to discuss, and negotiate the overall terms of acquisition.

Other than the core strategy for negotiation, negotiation tactics are also important. Multiple tactics supported with the recommended strategy can help Levon to basket the deal in their favor, while convincing the counter party, as well. Following are the recommended negotiation tactics to be applied:

Share Information: it is essential to share information with the counter party in order to gain their trust. Information pertaining to future objective, strategic orientation of the firm, future planning should be shared so that the counter party would understand the reason and foundation for the negotiation and where do they actually stand. This may also help in making others realize how they can actually respond to the situation, and thus creating a healthy environment where negotiation can actually proceed.

Priorities should be ranked: Always be prepared about the priorities. Jumping from one place to another actually hurts the overall progress, as well as creates confusion, for example, when talking about acquiring current assets, do talk about it, until concluded, jumping from current assets to liabilities will hinder the progress, as well weakened the position. Start talking about the most important element and then descends to the list.

Target Price and Walk Away Terms: One of the most important elements is to know the price for purchasing it and know the terms at which the deal shall be fortified. This will reflect credibility, as well as validity of the negotiating terms. This point also means that do not accept what counter party is offering, do not go too low, and do not get too high stick the plan. Be prepared for acceptance of offer and rejection of offer. With these tactics, and strategy in place, Levon would be in good position to acquire the target company. Nevertheless, it is essential to have someone who is good at communication, understanding and is aware of the company’s position. As a result, send someone who is good at talking and understanding, as well.

In summary, Levon needs to work with integrative negotiation strategy that can help both parties in reaching at a conclusive point. Other than the core strategy, it is essential to focus on different negotiation tactics that can also help the Levon to gain upper hand during the negotiation.

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