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Negotiation Strategy

Negotiations Introduction
What is negotiation?
...the
...thedeliberate
deliberateinteraction
interactionof
oftwo
twoor
ormore
moresingle
singleor
orcomplex
complexunits
units
which
are
attempting
to
define
or
redefine
the
terms
of
their
which are attempting to define or redefine the terms of their
interdependence
interdependence
Walton
Walton&&McKersie
McKersie(1965)
(1965)

l'interaction dlibre de deux ou plusieurs units simples ou complexes, qui


tentent de dfinir ou de redfinir les termes de leur interdpendance "
Negotiation Checklist
Before beginning negotiations, the team should have:
Established a services vision
Developed MDO (Most Desirable Outcome), LAA (Least Attractive
Alternative), BATNA (Best Alternative to a Negotiated Agreement)
Assessed the other partys BATNA
Identified and evaluated all options
Developed a message for negotiation
Scripted the roles of each team member
Planned the sequence and timing of negotiations
Completed a negotiation tactics worksheet
Completed the supplier presentation package
Completed stakeholder buy-off package

Avant de commencer les ngociations, l'quipe doit avoir:


Mise en place d'une vision des services
Dvelopp MDO (rsultat le plus souhaitable), LAA (solution la moins
attrayante), BATNA (meilleure alternative un accord ngoci)
valuation de l'autre partie BATNA
Identifi et valu toutes les options
laboration d'un message de ngociation
scriptes les rles de chaque membre de l'quipe
Planification de la squence et le calendrier des ngociations
Ralisation d'une feuille de calcul ngociation tactiques
Achvement de la trousse de prsentation fournisseur
Achvement adhsion des parties prenantes hors forfait

Entering into actual negotiations, we need to ensure any contact


with suppliers is carefully planned and deliberately managed
o Anything you say can and will be used against you!!!

D'entamer des ngociations relles, nous devons nous assurer de tout contact
avec les fournisseurs est soigneusement planifie et gre dlibrment
o Tout ce que vous direz pourra et sera utilis contre vous!

Negotiating Pointers
o Enter the session well prepared
o Establish trust, mutual rapport
o Address suppliers needs, not wants
o Continually gather information during each negotiating cycle
o Gain & retain control over the negotiating session
o Document all facts, issues and agreements
o Only make demands that you are really willing to accept; be prepared to
break off negotiations if they are not met

o Entrez la session bien prpar


o Etablir la confiance, l'entraide rapport
o Rpondre aux besoins des fournisseurs, et non veut
o continuellement recueillir de l'information au cours de chaque cycle de
ngociation
o Gain et garder le contrle sur la session de ngociation
o Document de tous les faits, les questions et les accords
o Seulement faire des demandes que vous tes vraiment prt accepter; tre
prt rompre les ngociations si elles ne sont pas respectes

Common Mistakes
o Irrational escalation of commitment
o Win-lose attitude - the Fixed Pie concept
o Anchoring judgments based on irrelevant information
o Being overly affected by the framing of the negotiation
o The Winners Curse

erreurs frquentes
o escalade irrationnelle de l'engagement
o Gagnant-perdant attitude - le concept Pie fixe
o L'ancrage des jugements fonds sur des renseignements non pertinents
o Etre trop affect par le cadrage de la ngociation
o La maldiction du gagnant

Negotiation Guidelines
o Begin on a positive note
o Agree on ground rules
o Consolidate and document agreed-upon issues to keep them off the table
for re-analysis
o Build trust and share information
o Ask lots of open-ended questions (use how, why, what, etc.)
o Make multiple offers simultaneously
o Use different expectations to create mutually beneficial perceived
tradeoffs
o Insist on using objective criteria
o Separate the relationship from the substance - deal with people directly,
not by making concessions
o Focus on interests, not positions - put yourself in their shoes
o Be specific
o Acknowledge interests
o Never yield to pressure
o Trade concessions, but make the smaller one
o Never hesitate to call a timeout, caucus, and reconvene
o Escalate authority when necessary
o If negotiations are in danger of halting, reshape the deal and look for
alternatives as long as your LAA requirements are met
o You have more power than you think

o
o
o
o
o
o
o
o
o
o
o

Aim high, but rationalize your target


Restate/reshape your objectives if necessary as the negotiation moves on
Develop your BATNA
Recast attacks on people as attacks on the problem - be soft on the
people and hard on the problem
Listen carefully
Emphasize areas of agreement
Tap the power of silence
Focus on both parties interests
Separate the people from the problem
Focus on developing your position on multiple options
Compare all alternatives on the basis of your best alternative rather than
ruling out solutions which do not meet your bottom line

Directives de ngociation
o Commencez sur une note positive
o S'entendre sur les rgles de base
o Consolider et documenter convenus sur les questions de les garder hors de la
table pour une nouvelle analyse
o Renforcer la confiance et de partager l'information
o Posez beaucoup de questions ouvertes (utilisez comment, pourquoi, quoi, etc)
o Faire des offres multiples simultanment
o Utiliser des attentes diffrentes pour crer mutuellement bnfiques "perus"
compromis
o Insister sur l'utilisation des critres objectifs
o Sparer la relation de la substance - traitent avec des personnes directement,
et non pas en faisant des concessions
o Se concentrer sur les intrts et non sur les positions - vous mettre dans leurs
souliers
o Soyez prcis
o Reconnatre les intrts
o Ne jamais cder la pression
o Les concessions commerciales, mais font le plus petit
o Ne pas hsiter appeler un temps mort, le caucus, et nous reprendrons
o Faire remonter l'autorit si ncessaire
o Si les ngociations sont en danger de mettre un terme, remodeler la
transaction et chercher des alternatives, tant que vos exigences sont remplies
AAL
o Vous avez plus de pouvoir que vous pensez
o Viser haut, mais de rationaliser votre cible
o Reformuler / remodeler vos objectifs si ncessaire, comme les mouvements de
ngociation sur
o Dvelopper votre BATNA
o Refonte des attaques sur les personnes que les attaques sur le problme - tre
doux sur les personnes et durs sur le problme

o coutez attentivement
o Mettre l'accent sur les points d'accord
o Tapez sur le pouvoir du silence
o Mettre l'accent sur les intrts des deux parties
o Sparer les personnes du problme
o Se concentrer sur le dveloppement de votre position sur les options multiples
o Comparer toutes les alternatives sur la base de la meilleure option plutt que
de rgner sur des solutions qui ne rpondent pas votre ligne de fond

Or, Collaborative Negotiations, consisting of


Problem-solving strategy
Non-confrontational
Develops multiple options
Yield to principle, not pressure
Two winners, often leading to successful partnership

Ou, ngociations en collaboration, compos de


Rsolution de problmes stratgie
non-conflictuelle
laborer des options multiples
Cdez le passage aux principe, pas de pression
Deux gagnants, ce qui conduit souvent un partenariat russi
Theme:
Theme: We
Weare
areaamarket
marketleader
leader- -ititisisto
toyour
youradvantage
advantageto
towork
workwith
withus
us

What are our objectives?


Objectives
Price

Quality

Savings

Description
Establish a fair price for the services it expects
of the service provider
The price will be flexible and variable with the
ability to fluctuate with changing market
demands and challenges
The suppliers pricing solution will reflect risk for
shortfalls to expectations and reward for work
completed that is above expectations.
Supplier quality assurance program in place
with proven results
Commitment to quality / performance of
products
Will be optimal in each category w/o the risk of

Service Expectations

sacrificing service
Will be tied to contractual commitments where
appropriate
Will be able to be validated through a
predetermined / mutually agreeable method
Will be maximized early in the services
implementation process
Will be clearly defined and document
Will be measurable and attainable
Will be mutually agreed upon by the buyer and
supplier
Will be established early in the implementation
process

What Negotiation Style will be utilized?


Giving away the shop - An accommodating style, when taken to an
extreme, can mean giving in too easily
Head-in-the-sand mentality - Avoiding dealing with the issues does
not solve the problem(s) either
High-benefit solutions - A collaborative, win-win style is based
upon mutual problem solving, and can result in a long-term, mutually
satisfying relationship
My way or else - Positional bargaining is frequently useful when we
know our interest can only be met through supplier concessions or
switching suppliers

Quel style de ngociation seront-elles utilises?


Loin de donner la boutique" - Un style accommodant, lorsque pouss
l'extrme, peut signifier cder trop facilement
Chef-dans-le-sable mentalit - viter traiter les questions ne rsout pas le
problme (s) soit
High-avantages des solutions - Une collaboration gagnant-gagnant de
style est bas sur la rsolution de problme mutuelle, et peut entraner long
terme, relation mutuellement satisfaisante
Ma manire ou d'une autre - la ngociation de position est souvent utile
lorsque nous savons que notre intrt ne peut tre satisfaite par des concessions
ou des fournisseurs de commutation

Negotiation Process
Analyze
supplier
proposals
Who is
Involved

Key
Activities

Outputs

Evaluate our
bargaining
position

Devise
overall
negotiations
strategy

Plan sequence
of negotiations
and team roles

Prepare for
negotiation

Obtain
stakeholder
buy-off on
strategy

Lead Negotiator
Negotiation Team
Category Team

Negotiate

Category Team
Support Team

Category Team
Negotiation Team

Develop negotiation strategy and tactics by


the Category Team
Prepare discussion document used to lead
negotiations
Contains pertinent analysis
Describes demands

Develop communications strategy


Provide details of analysis to
Negotiation Team
Review discussion document
Agree to structure and tone for session
Conduct negotiation training
Discuss meeting roles

Prepare backup analysis/


documentation
Prepare final negotiation document
Conduct dry run of negotiation
session

Conduct face to
face
discussion with
supplier key
decision
makers

Supplier scorecard

Negotiation strategy
worksheet
Objectives
LAA
MDO
BATNA

Negotiation
tactics
worksheet
Supplier
presentation
package

Supplier agreement

Five forces
analysis
SWOT analysis

Sequencing plan
Team roles
definition

Lead Negotiator
Negotiation Team

Stakeholder
buy-off
package

The negotiation strategy will be based on three critical areas (Needs, Wants,
BATNA):
Least Acceptable Agreement (LAA) Our bottom line / negotiating
floor
Most Desired Outcome (MDO) Best proposal based on overall cost
savings and viability of alternatives
Best Alternative to a Negotiated Agreement (BATNA) Course of action
we will pursue if the supplier will not agree to the viable options
(MDO, LAA) we present