Negotiation Plan Development

Identification of the primary supplier with whom to negotiate

This is the first and the important stage in the negotiation checklist that helps a firm to make the right choice of whom to negotiate with (Walton, Cutcher-Gershenfeld & McKersie, 2000). The firm should search for a supply with things needed in the firm. The firm should ensure that the person to negotiate with is qualified in order to handle negotiation with a lot of care. The firm should also identify the supplier who will negotiate basing on the existing terms of the firm.

Identification of alternative supplier to negotiate with

It is also for the betterment of the firm to have an alternative supplier. This helps out in case the firm and the primary supplier do not reach to agreement and due to the urgent demand in the firm; the alternative supplier becomes an option to negotiate with. Also, an alternative supplier can help in weighing the two sides and compare (Walton, Cutcher-Gershenfeld & McKersie, 2000). By comparing the firm is able to identify the supplier with manageable terms hence taking it as the priority for negotiation.

The kind of negotiation to use

Here, the firm must consider three circumstances. Whether the negotiation will be a one-time thing or it has to take place again and again. The firm has also to identify the kind of relationship that will be created during negotiation. If it is a long term, then the supplier will become a potential supplier of the business in the long run (Walton, Cutcher-Gershenfeld & McKersie, 2000). Under the kind of negotiation, the firm has to assess the situation on both sides for instance whether negotiating with the supplier can build a long term relationship or it will be taking place on temporal basis.

Challenges that can be faced in the negotiation

The firm must be ready to encounter conflicts in the course of negotiation. One can be caused due to differences in the views which may not result into agreement (Walton, Cutcher-Gershenfeld & McKersie, 2000). The second encounter of conflict is an existing trade dispute between the supplier and firm which basing on some differences hence leading to disagreement.

The reason for negotiation

The reason for negotiation between the two parties is to ensure that the agreement reached is fair to both the buyer and the supplier. Since both are business entities, both side expect to receive fairly in order to continue operating the business (Walton, Cutcher-Gershenfeld & McKersie, 2000). Therefore negotiation should ensure that the two sides are satisfied by the actions of the other.

Format of negotiation

Basing on the kind of business, the firm can decide on which format to negotiate with its suppliers in order to meet the essential elements of supplier negotiation (Fisher & Patton, 1992). Negotiation can be done either face to face or through phone communication.

Terms of negotiation

The firm has to negotiate with the supplier until the terms of payment are reached. This can be described by the methods of payment or the timing of payment which is favorable to both parties (Fisher & Patton, 1992).

A timeline for negotiation process

The negotiation process should start when the two parties have all the necessary requirements for the negotiation and they should have a specified agenda for the practice of negotiation (Fisher & Patton, 1992).

When to enter agreement

You should only enter agreement when you are sure of doing according to the suggested terms. And after reaching an agreement both parties should not show signs of excitement because this is an implication that the other side has been taken advantage of (Fisher & Patton, 1992).

The location of negotiation sessions

The place for holding negotiation sessions must be convenient and effective to both parties in terms of transport and safety.

References

Fisher, R., Ury, W., & Patton, B. (1992). Getting to yes: Negotiating agreement without giving in. Boston: Houghton Mifflin.

Walton, R. E., Cutcher-Gershenfeld, J. E., & McKersie, R. B. (2000). Strategic negotiations: A theory of change in labor-management relations. Ithaca, NY: ILR Press/Cornell University Press.