Negotiation Planning Form

(Reminder: you can expand the box size when you need to write
more)

I. The Problem
Problem Statement: I must negotiate with (person) to (solve what problem). As Sal
Granger, President of Magnetic Advances, I am negotiating with Audio
Components to obtain rights to Z-25. I believe that Magnetic Advances can take
advantage of the commercial opportunities associated with Z-25.

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II. Goals and Decision Makers
My specific, High Expectation:
My high expectation would be Choice 2)
on the list: Magnetics produces Z-25 and
no limitations are put on its distribution
($140M-TP). My second choice would be
Choice 3) Magnets produces Z-25 and is
prohibited from selling to Audios direct
competitor for 6 months ($130M-TP).

Target decision-maker:
I aim to persuade Audio Components to
give me the rights to Z-25 and agree
upon terms that will allow Magnetic
Advances to gain external and internal
profits.

BATNA: Any cash payment that I have to

make to Audio Components would set
my BATNA. Also, for every $100 dollars
of Z-25 I supply for free, I will have to
subtract $100 from my profits.
My BATNA will be choice 5) from the
table: Magnetics produces Z-25 and is
prohibited from selling to Audios direct
competitors fro 12 months ($120M-TP). I
am not willing to give up anymore time
and profits and prevent from selling to
Audios competitors. I will also have to
be giving a transfer payment to Audio
Components in order for them to release
the product to me.

Influencers (Should I negotiate with

these people first?)
I can potentially negotiate with my
analysts once again.

1 From Shell, Bargaining for Advantage

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III. Underlying Needs and Interests
(Shared/Ancillary/Conflicting)
Mine
I believe that since Magnetic has the
exclusive charter to sell magnets
external, only Magnetics can exploit the
commercial opportunities associated
with Z-25. I also do not want the
decision concerning the future
marketing of Z-25 to be made by top
management.

Theirs
Audio Components does not want
transfer the Z-25 technology to us. If
Magnetic advances is selling Z-25 on the
open market, Audio components direct
competitors could buy it and the
division will lose its competitive
advantage. Also, Audio Components
would probably want to recoup its
development costs of about $12 million
and get a reasonable profit by making
Z-25 for sale to other divisions in El-Tek.

IV. Leverage
What do I lose if there is no deal? I lose
the rights to Z-25 and the possible
profits.

If no deal, what will they lose?

They will lose the possibility of Magnetic
Advances making good use of Z-25.

What steps or alternatives will reduce

these losses? I can accommodate to the
needs to Audio Components and not sell
to Audios direct competitors during a
specific timeframe.

Can I influence their alternatives or

make their status quo worse? I can
influence their alternatives by
negotiating the period of time that I
cant sell to competitors, the transfer
prices, and additional costs.

Leverage Favors: Me Other Party About Even

(Who has the most to lose overall from no deal?)
I have the most overall to lose from no deal.
Please provide your reasoning here: Since Z-25 has a lot of commercial
opportunities, I believe that the Z-25 will help Magnetics profits, business, and
corporate image tremendously. By not agreeing to a deal, I will lose the potential
profits. However, if there is no deal, Magnetics will not have to provide transfer
payments to Audio and also risk losing partial profits to Audio due to the period of
not selling to Audios competitors.

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V. Possible Proposals

Options: Build on Shared Interests/Bridge Conflicting Interests/Be Creative

Since I am very interested in the Z-25, I am willing to accommodate to Audio
Components needs to a certain extent in terms of preventing sales to Audios
competitors.

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VI. Authoritative Standards and Norms

Mine

Theirs

My Counter Arguments

I am trying to negotiate for

the rights of Z-25 in return
of accommodating to
Audios needs.

Audio has the rights to Z25 so they can make the

ultimate decision.

Magnetic Advances will be

able to return a financial
favor.

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VII.Third Party Moves
Can I use a third party as leverage? As an excuse? As an audience? Coalition
partner?

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VIII. Situation and Strategy Analysis
Situation as I see it:
__x_ Transaction My basic style is
Avoidance
_x__ Relationship
___ Balanced Concerns so I need to be
more accommodating, compromising,
and competitive in this situation.

Situation as they see it:

expected strategy:
__x_ Transaction
Competitive
___ Relationship
solving
___ Balanced Concerns
Compromise
___ Tacit Coordination
Accommodating

Their
__x_
___ Problem
___
___ Avoiding
___

Please provide your reasoning here: I see this as a transaction and relationship.
Although I am trying to negotiate a difficult deal with Audio Components that if
receiving the rights to Z-25 will boost my profits, I need to negotiate politely and
fairly in order to persuade Audio Components. Since we are divisions within the same
firm/industry, I would also view this as a potential professional relationship. If Audio
were to grant me the rights today, I will be able to provide Audio with aid in a future
transaction.

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IX. Best Modes of Communication
___ Agent

___ Teleconference

__x_ Face to face

Messaging

___ E-mail

___ Telephone

___ Instant

Please provide your reasoning here: Face to Face communication would be best in
order to really sell my reasonings and intentions to Audio for granting the rights of
H-25 to Magnetics. I can directly discuss the financials as well as the costs/benefits
that each party will have to consider. Through face to face interaction, both parties
will be able to discuss the terms and concerns directly and clearly.

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X. Overall Positioning Theme
A short statement that sums up your underlying purpose in this negotiation:
Magnetic Advances will be able to market Z-25 commercially effectively and can
possibly benefit Audio Components in the future.

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