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CASE 3.

1 A SCANDINAVIAN SCARE
Discussion Questions

1. Why did Conquip send an RFQ with a 10 percent price-reduction requirement rather
than calling de Winter in for negotiation? Is there any downside to having run the
negotiation this way?
Conquip was trying to give a time pressure to FD. This can be seen when Conquip sent the
RFP (Request for Quote) to FD regarding the product, LEIF filter, which still not even widely
adopted by Conquip. This particular pressure functions as an external constraint to FD.
Conceptually, the constraint removes what could be the most attractive of options for FD to
continue to negotiate in an effort to improve the terms of the agreement. Lacking this option
leads FD to face with a twofold choice which they can either agree or refuse the agreement
requested by Conquip.

This could appear like a great strategy until Conquip realise that there's no difference
between that and FD might also putting on time pressure to them. There could be a situation
in which both sides are approaching the same time deadline. And in this particular case, the
one that has the greatest power is the one with more alternatives who could use time pressure,
but the side with fewer alternatives has the least power should avoid time pressure and
negotiate well before the deadline.

2. At the first negotiation meeting, Conquip made a threat disguised within an offer.
The offer was to retain FD as a companywide, primary supplier if FD could meet its
price demands.
A. What was the threat embedded in this offer?
De Winter was suspicious of this offer because of the close relationship between Conquip and
FF. He noticed that although Conquip requested for the quotation, but many of FDs highvolume products were noticeably missing from the RFQ. This has made de Winter more
doubtful as he believed that Conquip just wanted quotes from FD on products that competed
directly with FF products for the purpose of reducing FFs prices.

B. why was this offer not credible to de Winter?

De winter realised that this RFQ was just came as a frame to FD. Framing is a mechanism
through which people evaluate and make sense out of situations that lead them to pursue or
avoid later actions. And in this particular case, Conquip tried to give a solution and defining it
in terms that was meaningful and based on FDs interests. However, de Winter may had
understood completely what Conquip was doing by realising that they were being framed.
Understanding the framing dynamics helps de Winter to consciously controlling the framing
process.

3. If FD could have reduced prices by the 10 percent requested by Conquip and still
have a positive and reasonable margin, why negotiate? Why not just reduce the price to
save the business?
Because FD and FILTECHs highest priorities were to maintain positive margins and a longterm sales relationship. But knowing Conquip was trying to use FD for their own advantage,
FD could not bare the lost nor given any false hope. This could be concluded when a lot of
other important information was not given by Conquip such as their interest on the scope of
sales (number of products).

On the other hand, knowing that FD came in with a poor BATNA, de Winter did not want to
make concessions too easily and look weak. A negotiator should accept the proposed
agreement if it is better than his BATNA, or otherwise consider withdrawing from the
negotiations to pursue his other alternative. However, de winter did not have any better
BATNA, but he wanted to purse the agreement. Therefore, by giving this kind of impression
would make Conquip assumed that FD has a better alternative than them. De winter had put
on a reverse psychology of framing towards Conquip.

4. How did Marc de Winter improve his bargaining position at meeting 2? What
general negotiation principle did he employ? How well did it work?
The main reason why the second meeting improved was because de Winter laid down what
could be the positive outcome when both companies work together. De Winter changed from
position-based negotiating to interest-based negotiating. Typically Conquips interest was to
reduce the supplier costs, while FDs need was to maintain positive margins and a long-term
sales relationship with Conquip. So, both organisations took a win-win approach to this
solution when they look beyond price to understand both the short and long-term needs of
both organisations. They reached a solution when Conquip doesnt need to search for options

to find the lowest price out there where they can rely on receiving FDs product consistently
at a fair price, with and added value of being the sole provider for FDs products in the
market. While, FD won because it had a consistent customer for its product, ensuring a
positive cash flow, steady employment, and predictable operations. The two companies could
have ensured a loyal partnership that can considered the importance of a long-term
relationship.