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Title:Criticality Grid in Negotiation Planning

Description:

What is Fundamental Goal of This Transaction ... Use Trade Directories Yellow Pages Internal Users etc. to Explore Supply Base ...

Learn more at:http://www.sba.pdx.edu/faculty/leeb/454

Presentation added: 12 August 2009

Slides: 21

Category:Unassigned

Tags: yellowpages

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Transcript & Presenter Notes

Title: Criticality Grid in Negotiation Planning

1
Criticality Grid in Negotiation Planning
High M A R K E T
Low
Low High INTERNAL
2
Negotiation Planning

What is Fundamental Goal of This Transaction
How Will This Transaction Create Competitive
Advantage
Assess Buying Position
Assess Selling Position
Assess Situational Issues
Set Targets
Plan Concessions

3
Negotiation Planning

Use Internal Resources
What Exactly - Do We Need
Complete Detailed Specifications
Past Volumes
Projected Volumes
Define Performance Requirements/Specificiations
Set Priorities
Develop Price or Cost Estimates

4
Negotiation Planning

What Do We Want
Availability Issues
Lead Time
Suppliers Inventories
Quality Issues
Response Time
Warranties
SPC
Pricing
Target Pricing (Why)
Acceptable Range

5
Negotiation Planning

From Whom Do We Want Bids
Research All Suppliers in Last Three Years
Use Trade Directories Yellow Pages Internal
Users etc. to Explore Supply Base
What Form of Supplier Response
Sealed Bids With Non-Price Negotiation
Two Step Bidding
Negotiation

6
Setting Targets

Needs
Price Range
Delivery Requirements
Quality Requirements
Wants
Payment Terms
Extended Warranties
AM Deliveries

7
Setting Targets

Like-tos
Purple Color
Right of First Refusal of New Technology
Weekly Donuts
The Opening Position
Have High Aspirations
Temper With Realism

8
Concessions

Another Element of Planning
Issues to be Avoided
MUST HAVE Issues
Priorities of Other Issues
Alternative Approaches
Concession Ammunition
Concession Timing

9
Planning Tools

Price Analysis
Cost Analysis
Learning Curves
Power
Criticality Grid

10
Price Analysis

What and How
Industry Standards
Factors Influencing Price
Perceived Substitute
Unique Value
Switching Cost
Difficult Comparison
Quality

11
Price Analysis

Expenditure
End Benefit
Shared Cost
Fairness
Inventory
Administrative Cost
Risk-Continuity

12
Cost Analysis

Custom Products
High Volume Requirements
Cost Elements
Design
Quality
Process
Productivity
Economies of Scale
Sourcing
Volume/Learning Curve

13
Assess Suppliers Motivation

Quick Sale
Unload Inventory
Quota Time
Tide Over Business
Long Term Relationship
Foot-in Door
Market Penetration

14
Completeness of the Agreement

Amendments
Acceptance Tests
Assignment
Service Bulletins Modifications
Confidentiality
Delivery
Emergency Support
Installation Set Up

15
Completeness of the Agreement

Insurance
Liquidated Damages
Maintenance
Contract Renewal Option
Packaging
Payment Terms
Spare Parts Availability
Service Support

16
Completeness of the Agreement

Taxes
Technical Publications
Training
Termination
Value Analysis
Warranties

17
Negotiation Planning

What Do We Know About Other Party
What Do They Want
What About The Individuals
What Information to Present
To Whom Shall We Present Information
How to Present the Information
Concession Planning
Our Opening Position
The Negotiating Team

18
The Negotiating Team

Composition
Rank
Numbers
Duties
Conduct
Observation
Scribe
Social Activities

19
What Happens If We Dont Agree

What Will It Cost to Change Suppliers
What Will It Cost If We Dont Agree
Immediate Cost
Future Cost
Future Interaction
Relationship
Credibility
BATNA
Best Alternative
Walk Away Point
Contingency Plans

20
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