Business Convention Analysis
Contract negotiation is common in the business world, which involves giving and taking so that an agreement can be reached (Ward, 2012). In typical negotiations, all the involved parties must compromise on certain issues so that benefits can be obtained in equal measure. However, it is worth noting that not only business negotiations leads to winning since if an agreement cannot be achieved or when one party is required to sacrifice not only its focus but wellness then the offer can be rejected during the negotiation process (Staff, 2017). To begin with, as a sales manager the business offer that has been proposed is a positive one because it mainly seeks to offer the hotel a more strategic positioning in the market but the possess some risks as well as benefits for the company. In order to meet the objective of maximizing the earnings of the company’s shareholders in terms of revenue certain clauses have to be re-negotiated such as complimentary rooms, food and beverages and additional concessions.
Similar to other companies in the hotel industry, the hotel bosses are interested in expanding their market share for greater revenue gains as well as strategically positioning the company competitively. If some clauses are not re-negotiated then the company will not be acquiring any sort of value from the business (Staff, 2017). To begin with, the group needs to acquire quality and unique services that not only meet their expectations but also considers the set budget based value. Therefore for the preservations of the accommodation, food and meeting facilities to be made adhering to these sets then there is a need to reconsider the clauses. The outcome of the negotiation and agreement as it stands currently is not desirable. The company is not willing to give up its objectives but focused on enhancing its services in general.
The clause that the group will be paying for a specific money set for the food and beverages needs to be reexamined. This is because the group should pay for the products based on consumption since the attendance rate might differ. If the attendance is high then the consumption of food and the needed services is also high which means that higher payment is needed. This will subject the hotel at a greater loss since there is no revenue that will be gained and this might, in turn, affect the quality of the offered services and products. This will automatically affect satisfaction and motivation for both of the involved parties. The reasonable value must be created at all times. The company has certain disadvantages that hinder it from taking the deal without making some adjustments to the stated clauses. Operating expenses is the main disadvantage of the hotel that it seeks to lower throughout its operations in order to ensure that the investors are satisfied. However, the issue of focusing on quality cannot be ignored since the group is more interested in it as well as customer satisfaction (Staff, 2017). It is not easy to build good relationships with the consumers if their expectations and needs are not met fully.
Additional concessions are something that should be reexamined. This is because the company is already provided services that are characterized by affordable cost which means that by offering more discounts then losses might be experienced. The hotel industry has been subjected to intense competition in the most recent years which have thus forced companies to adopt different measures to sustain their competitive positioning while growing both their shares in the industry and revenue (Ward, 2012). The hotel is mainly influenced by cost leadership even though it offers quality and premium products and services. This means that it offers the least prices in the market and it cannot, therefore, afford to operate under further discounts. Since running a hotel is expensive and the set cost for commodities is low if the prices are reduced further, this implies that the company will not be generating any revenue. The group needs quality services and the company needs to enhance its revenue gain so that it can support its operations and sustain business even in challenging times (Ward, 2012). The company, in other words, cannot offer further concessions but the services and food provided are guaranteed to be of the utmost quality.
In other words, the offer can be turned down during the negotiation period if the group does not comprise of such things. This is because despite the fact that the company must guard its market it cannot afford to take losses as being competitive is all about being about to generate adequate revenue in the competitive market. However, if the group is will reexamine the clauses to ensure that their needs are met and the company does not incur losses then the hotel will take the deal. The best time to reject the business is during the negotiation since the company will not have signed the contract that highlights expectations from each group.
References
Staff, P. (2017). Use Integrative Negotiation Strategies to Create Value at the Bargaining Table. Retrieved from https://www.pon.harvard.edu/daily/negotiation-skills-daily/find-more-value-at-the-bargaining-table/
Ward, D. (2012). Contract Negotiation Handbook: Getting the Most Out of Commercial Deals. Hoboken [N.J.: John Wiley & Sons.
