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PTMT 6000 Negotiating for Project Management

Analysis of Transcript Builders Compounds Ltd Vs EnviroSafe


Beta Waste Agreement Analysis of Negotiations

In this exercise I had the opportunity of negotiating on behalf of Builders Compounds, Ltd where we had the good intentions of reaching a mutually beneficial ground. Our group initially agreed that we would try to be as collaborative as possible, in other words we had the intentions of interacting in joint problem solving, where the gains of Builders Compounds Ltd are not necessarily viewed as an expense of Envirosafe and visa versa. However this task proved to be an extremely difficult task. Firstly, it is noticeable that we tried to move into the meat of the negotiations too quickly; more time should have been spent at the initial stages giving introductions, WIIFMs and in determining the negotiation style of the other party. It obviously made the members of the Envirosafe side feel uncomfortable as this was mentioned by them. In addition, there were no WIIFMs given by either party in this exchange, if this technique was adopted then bargaining could be much easier. It is noticeable that the other party was trying to negotiate collaboratively as they were adding incentives to their price per pound that we should have accepted. At this point they were in my view trying to collaborate while we were still being highly competitive. We should have tried using the If then bargaining chip until we reached an agreeable area. Collaborating calls for a full discussion of each participants perspective and in my view this never occurred from either party. It was easier for us to keep all the information to ourselves and try to get the best of the team at Envirosafe. In conclusion I could say we did the necessary preparations in that we worked out what we wanted and the best way to achieve it, we also looked at what the other team wanted that we had and also made sure that we shared common interest. But our errors came in the stage where we should have been proposing and bargaining and not being highly competitive. I would consider the negotiations a learning experience as we can see major downfalls in the competitive approach some of which are; threats to future relationship, an increase in costs, it is very hard to predict the outcome and in our case there was none and finally there is limited development of solutions because we were too firm in our requests.

Transcript of Negotiation
[7:24:42 PM] Nicholas Gonzales: so, how are yall doing today? [7:24:50 PM] Marlon Walcott: we are pretty good, and yourselves? [7:25:03 PM] Nicholas Gonzales: we are doing well also thanks. [7:25:22 PM] Nicholas Gonzales: We are exploring options to dispose of our beta waste product. One option is your green gas process. Do you think there is a possibility for us to go into partnership for disposing of our beta waste product? [7:25:59 PM] Marlon Walcott: Yes, we think this would be a great endeavour for both our companies [7:29:44 PM] Nicholas Gonzales: k [7:31:01 PM] Marlon Walcott: In terms of partnering [7:31:12 PM] Nicholas Gonzales: ok great [7:31:12 PM] Marlon Walcott: what arrangement were you considering? [7:31:52 PM] Nicholas Gonzales: We are looking for a long-term relationship with you, in which case, what is the best price you can offer us for the disposal of our product? [7:32:24 PM] Marlon Walcott: before we go into the issue of cost, what length of contract were you looking at? [7:33:08 PM] Nicholas Gonzales: We are looking for a long-term relationship with you, in which case, what is the best price you can offer us for the disposal of our product? [7:34:01 PM] Marlon Walcott: well the price disposal will vary depending on various factors and we want to ensure we both understand what is involved in this agreement before we discuss cost [7:34:11 PM] Marlon Walcott: the price of* disposal [7:34:28 PM] Nicholas Gonzales: ok [7:35:00 PM] Marlon Walcott: we were looking at a fixed cost per pound of waste under the condition that for the duration of our contracted period [7:35:21 PM] Marlon Walcott: we would be the sole handlers of your stickywet waste, this is the type of arrangement you want? [7:36:49 PM] Nicholas Gonzales: Yes, based on cost agreement. [7:38:35 PM] Nicholas Gonzales: We are proposing a price of $2 per lbs on this product. And this is at a guaranteed quantity of 650 000lbs per annum minimum.

[7:41:46 PM] Marlon Walcott: ok so $2 is a fairly low starting position, what are you basing this figure of off? [7:43:16 PM] Nicholas Gonzales: we are basing our figure off of the 90% guaranteed quantity you will be receiving per year, and the current market price we are currently paying. [7:45:46 PM] Marlon Walcott: ok, so if you can give us 100% of the waste rather than the 90%, we would be willing to go as low as $2.70 and what we will do to help with your overhead is give you 50% of all green gas energy we produce based on your shipments of betawaste [7:46:06 PM] Marlon Walcott: that is to say, the more waste you deliver, the larger the savings you will see in energy costs [7:46:11 PM] Marlon Walcott: in energy* [7:55:30 PM] Nicholas Gonzales: we were not saying 90% of the material, we were saying a 90% guarantee on you receiving 650 000 lbs per year, taking into consideration loss or anything or the sort on the material, we are aiming for you to receive 100% of that 650 000. Thats what we meant [7:55:47 PM] Nicholas Gonzales: and due to that, we propose a $2 per lbs [8:01:39 PM] Marlon Walcott: ok, we can't go as low as $2 a lb, which is why we are offering the inclusion of energy savings for you. We believe that you will save approximately .80c per pound either in savings or sold back to the market [8:03:05 PM] Nicholas Gonzales: I understand that, however, if you dont mind me asking your reason for not agreeing to the $2, although we guarantee that large quantity per year from us [8:05:46 PM] Marlon Walcott: ok, we can seek to meet the $2 valuation however we want a maximum increase of 9% in each quarter to account for increases in costs and economic factors such as inflation [8:06:43 PM] Marlon Walcott: in other words the $2 stands for the first quarter and can be increased in each quarter [8:11:53 PM] Marlon Walcott: (5mins left btw) [8:12:14 PM] Nicholas Gonzales: that still goes back to approx what you were offering in the first place, well just shy of it, and again we say, due to that large quantity we guarantee, we are inclined to sticking with the $2 per lbs. If you look at this supply from us, it is advantageous to your company for many reasons, one of which is it will help to reduce your cost and therefore help your company become a bit more competitive [8:13:27 PM] Marlon Walcott: and in having one company that takes care of your waste and provides you with compensation through energy you gain a benefit, $2 is simply not a price we can offer for the duration of any length contract [8:14:57 PM] Marlon Walcott: we are also willing to look at the duration of your local storage

[8:16:08 PM] Marlon Walcott: (Dr. Glidden is asking why you are not moving, that she isn't seeing this as 'negotiation') [8:16:58 PM] Nicholas Gonzales: lol [8:18:31 PM] Nicholas Gonzales: ok, we will propose $2.30 per lbs. however this is in all quarters. And you will still get the same quantity per year [8:20:59 PM] Marlon Walcott: let me ask you this; are the energy savings we are offering worth nothing to you? [8:25:35 PM] Nicholas Gonzales: ok, the lowest we are willing to go is $2.45 per lbs, and accept your savings proposal, but asking you to keep in mind, the quantity we are offering you per year [8:26:10 PM] Nicholas Gonzales: you see, in doing this you are guaranteed a long term supply [8:26:17 PM] Marlon Walcott: we are aware of you offering and to be frank they are (at minimum) 115000lb short of our estimates [8:26:26 PM] Nicholas Gonzales: and, it will boost your public image as well [8:27:16 PM] Marlon Walcott: ok, we are afraid we will have to be plain; we are not willing to accept less than $2.50 per lb for the first quarter [8:27:56 PM] Marlon Walcott: and are willing to agree to a cap of 6% in the per quarter increases to this cost [8:28:27 PM] Marlon Walcott: anything less and you will have to ship your waste elsewhere on your own