Contract Negotiation Assignment
Objectives
For this assignment, you will negotiate and draft an international contract. The purpose of this exercise is to:
•
•
•
•
•
•
•
Negotiate an international sales contract.
Familiarize yourself with common contractual clauses.
Increase your awareness of the terms and conditions for an international contract.
Experience capturing key legal issues of concern for your business in a legal contract.
Enhance your appreciation of cross-cultural business dealings.
Refine your oral and written communication skills.
Improve your understanding of contract law.
You are required to submit four documents for this assignment with details outlined below.
•
Documents that Must Be Submitted to DROPBOX for Grading
Strategy/Goals Document (D2L) – 25 points. Use the first week of this assignment to prepare your strategies
and goals. You do not meet with the other side prior to completing your Strategy and Goals document. Do not
discuss your strategy and goals with anyone else in this class, you can bounce ideas off friends/family. Use a
bullet point format for the document and divide it into three sections – see samples below. For the strategy and
cultural approach, you can use a paragraph format if that works better to describe your approach.
•
Strategy. How do you plant to approach your first negotiation meeting from a strategy perspective? Add
some specificity and contingency planning.
Strategy
Set High Initial Price
Anchor
Win/Win
•
I plan to offer my best price immediately and explain why it’s a win for both sides.
Cultural approach. Will you do anything different based on the different culture? What? Why? I
understand that most of you are not aware of the Mexican culture in any significant details, so please send
a little time to research how you might approach any cultural issues and have a plan. One side is supposed
to be Mexican. I expect that side to do similar research and behave accordingly (basically do the same sort
of research that the American side does but with a view of noting how you would likely behave differently
and how you might approach an American company differently). This part of the exercise is more
research/academic based and you do not need to play the cultural role in your negotiation. Today’s
business environment expects understanding of various cultures without stereotyping and this assignment
asks you to practice walking that line.
Cultural Approach
Ask About Family
Direct Discussion
•
Comment
I plan to start with a very high price to allow room to negotiate to a lower price
Comment
I (US Company) plan to ask about the other side’s family prior to negotiating as I
understand Mexican culture is more likely to mix family and business and this
may be a more comfortable approach than our normal style of jumping right into
the business deal.
I (Mexican Company) plan to be more direct in my discussion of the business deal
than I normally am in an effort to accommodate a perceived interest in Americans
to get to the deal facts quickly.
Contract Provision Goals. What do you expect the price, quantity and other terms to be? Why? This should
include a list of the key provisions you believe are worth negotiating. Please use a chart as illustrated below.
Term
Price
Goal
$xx
Result
$xx
Explanation
Goal: I believe this is a reasonable price for our product and plan to achieve
this goal and will not negotiate below this point.
Result: (complete at the end of the project as part of the assessment). Add
a comment for your result after you complete the negotiation.
Add more
rows for
more terms
•
•
•
•
Draft Contract (D2L) – 25 points. Each person will prepare a draft of a contract based on the negotiation results.
Before completing the draft, you will have to have concluded your negotiations with the other side. I suggest
the actual negotiation should take no more than one hour, but you may take longer and it could be a series of
short meetings rather than one longer one. You are expected to reach a deal. Below is some detail on what’s
expected in the contract.
• Key Terms. Based on your negotiations, each student drafts a formal legal contract that includes the key
terms you agreed to with the other side. I understand that you are not lawyers and that we are not using
extensive class time to discuss contract drafting or contract terms. I expect you to review the sample
contracts on the website, look for a few more samples you may have (cell phone, apartment, car, find on
online, etc.) primarily to see how a contract looks and to get ideas for terms. Use the narrative provided
(your confidential information) to make sure you include terms that are key to your side. KEEP IT SIMPLE. I
expect you to borrow some clauses and ideas from what you find online but keep the legalese to a
minimum and keep clauses very short. I want to see enough that you thought of the issue and agreed to a
position. If you can effectively convey what you agreed, this skill will serve you well in giving a good
document to an attorney to draft an agreement for you in the future. That means you included the key
negotiated terms and what is important to you, but you allow the attorney to turn those items into
litigation proof documents.
Heading of Contract. There are many methods to introduce a contract, but think a bit about how to title it and
initiate the contact.
Signature Section. See next section below.
Signed Contract (D2L) – 25 points). The parties should meet to discuss and compare the written contracts. One
of the written contracts should be selected for the basis of the final agreement. One signed contact is handed in
for the two groups together. After any necessary negotiations and changes, the contract should be signed at the
bottom as follows (or using another acceptable format – this format is actually a bit clumsy but good to know:
Agreed to and executed this _____ Day of ____________, 2020.
•
XContraptions, Inc.
Camion Ranchero
________________________
By: ____________________
Its: ____________________
_____________________________
By:
_______________________
Its:
_______________________
Assessment against Goals (D2L) – 50 points. Each student also completes an assessment of how you did against
the student’s goals. This should be a short explanation of how you did in negotiating your key terms. Include an
explanation if the terms deviated from your goal. Please put together a table showing your key goals/terms and
result. Use the same table from your goals and add – don’t delete. Also in this document, explain any cultural
issues that arose in the negotiations (this part is only necessary if something actually arose and I will use your
comments in your initial goals document to ensure you considered cultural differences).
Term
Price
Add more
rows for
more terms
Goal
$xx
Result
$xx
Explanation
Goal: I believe this is a reasonable price for our product and plan to achieve
this goal and will not negotiate below this point.
Result: I achieved our goal on price, although partly by impacting my
quantity goal.
CONFIDENTIAL INSTRUCTIONS for ODD # STUDENTS
XCONTRAPTIONS, Inc.
You are the Vice President of Sales and Marketing for XContraptions, Inc. Your primary job is to increase sales of
XContraptions products. You are relatively new to your job and were hired, in part, because you were persuasive in
your interview with the Board of Directors that you could increase sales by expanding into new international
markets.
Background. XContraptions started its business in Minnesota selling snowmobiles, but expanded over the last
decade into all terrain off-road vehicles. The company has found success with its line of Traption All-Terrain
Vehicles (ATVs). The Traption line sells well among farmers and sportsmen. XContraptions remains primarily a
mid-western company with sales mostly congregated in the Midwest states. The Traption line has expanded
XContraptions market to customers throughout the U.S.; however, you face stiff competition from other regional
and national supplies and have struggled to grow at a pace that satisfies your boss (the President), the Board of
Directors, or the shareholders.
Opportunity. As part of your research into new markets, you attended an ATV conference in Santiago, Chile to
explore opportunities for the Traption in South America. At the conference you met with a Vice President and
Buyer for Camion Ranchero. Camion Ranchero operates a chain of 126 truck dealers. Its business has been
primarily to ranchers and farmers and accordingly it focuses its sales on off-road use. It currently sells pick-up
trucks, off-road motorcycles, ATVs and some other more unique use types of trucks. It sells throughout Mexico
and has recently seen an increase in its sales to the tourist industry. Small tour operators are buying some of its
ATVs in quantity to offer sightseeing tours or for adventure rides. You learned this through a short discussion with
the Buyer and you gave the Buyer your short sales pitch as well. You exchanged business cards.
The Buyer seemed genuinely interested in your ATVs and the Buyer’s questions demonstrated good industry
knowledge. Overall, you evaluated the Buyer as someone to take serious as you intend to do. The Buyer told you
that Camion Ranchero already sells a full line of ATVs that have sold well with sales increasing every year.
However, you know that your Traction models are far superior to Camion Ranchero’s current line so you are
confident your discussions will go well. You’re confident that if you can get Camion Ranchero and its customer to
try the Traption, they will love it, recommend it and buy again.
Competitive Environment. The market in the U.S. is very competitive with ten key providers. XContraptions ATVs
have an excellent reputation for quality and performance at a competitive price. The product line has performed
well, but the competitions’ offerings are comparable enough that it has been difficult to grow sales quickly.
Internationally, there are a lot of ATV providers that offer a much lower quality solution. You know your solution
competes well against those and you know that the competition you face in the U.S. has not expanded to Mexico
or South America.
The key selling criteria you use to sell the Traption line of ATVs are listed below.
•
•
•
•
High Performance. The full Traption line is designed for high performance. This means they have
sufficient horse power to perform at an optimal level, they can handle jumps, falls, steep hills and mud.
Although designed for sportsman and farmers the line has been used by some racers and off road
adventures that push the ATV’s performance to its maximum. These users have praised the performance.
Low Maintenance. The Traption line has a record of outstanding durability and low maintenance. The line
was built with the idea that the users need the Traption to perform consistently and cannot tolerate
downtime. The Traption line is built to last and not fail when needed.
Safety. The Traption line has state of the art safety built into every design. The Traption is built to prevent
rollovers with a low center of gravity and with an optional roll cage to protect both the machine and its
occupants if a rollover does occur. The Traption is built with state of the art brakes that automatically
control descent speed if the driver fails to properly engage the brakes.
Warranty. The Traption line comes with a three-year warranty that covers all mechanical issues.
•
•
•
Repair. The Traption line offers complete support for repairs with manuals, spare parts, and a technical
hotline for assistance.
Customization. The Traption line offers over 150 accessory options to customize the ATVs for different
uses and different preferences. The Traption line is built with standard attachment points allowing for
users to add and remove accessories easily.
Simplicity. The Traption prides itself on simplicity of operation. It’s a very powerful machine with a wide
array of options, yet it’s very simple for a first-time user to sit down and almost instantly become
comfortable with its operation.
Financials. You offer a full line of Traption ATVs with pricing ranging from $5,500 to $12,000 plus all the
accessories. Your net profit margin averages 10%. To simplify any potential negotiations, you plan to limit
discussion to the Traption ALLSPORT model. The Traption ALLSPORT is your best seller, most versatile and best
rated ATV. It retails for $7,500. XContraption sells the ATVs for 25% less than its retail price to its distributors so its
standard price for the Traption ALLSPORT is $5,625. XContraption makes additional money on parts and
accessories but that’s difficult to calculate and is not figured into your bonus calculation in any case.
Another consideration is manufacturing capacity. XContraption is committed to the Traption line (hiring you is part
of that commitment). It built a state of the art manufacturing facility that is only operating at 70% of its capacity of
approximately 25,000 ATVs a year. XContraption’s variable cost per unit of its Traption ALLSPORT is $4,000 (the
ALLSPORT model provides better than average margin for the business).
You have done some research into the Mexican market and have determined that your Traption ALLSPORT
requires no manufacturing changes to meet the market legal requirements. You will have to develop some new
marketing materials and have your user manual/warranty and other materials translated and printed in Spanish.
You estimate that the cost of this and other additional fixed costs associated with doing business in Mexico the
first time will cost you $100,000 in fixed costs. This is not a concern if you can obtain a large enough order to
spread the fixed cost over the units, however, at low quantities it would be tough to absorb.
Plus, shipping is a bit of an issue. All the Traption models are manufactured in the U.S. Assuming you can ship in
quantities above 1,000, you can obtain favorable shipping costs from your existing shipping vendor of your
standard U.S. rate plus $200 per unit shipped. You have traditionally paid the shipping cost to the dealer, however,
you are not sure who would pay shipping if shipped internationally.
Company Direction. You report directly to the President of XContraption and you discussed this opportunity with
the President. She said that “this is exactly the sort of opportunity we hired you to deliver – so make it happen.”
You raised some of the logistical issues with her, shipping, Spanish language issues, and price.” Her response:
We hired you to grow unit sales and revenue and you have some leeway here to make that happen.
We invested a lot in the design of the Traption ATV and the new factory and we need to increase
sales to recoup that investment and to get the plant operating at full capacity. The Board, however,
is used to a 10% margin so it makes sense to keep our wholesale discount the same or maybe even
increase the wholesale cost a bit to cover the extra logistical costs and work of selling to Mexico. We
certainly do not want to lose money on the deal so if you have to give at all on price don’t go below
our fixed cost. This had better be big to make it worth it, a 1,000 or more units a year. And
remember, we’re a relationship company so anything we do we do with a focus on the long term.
Make sure this is the type of company we want to work with for many years. You’re in charge. Good
luck.
Criteria
Level 3
Level 2
Level 1
Criterion Score
7.5 points
7 points
O points
/ 7.5
Negotiation
Strategy
No or weak goals.
Comprehensive
strategy with
multiple counter
options (moves) and
approaches.
Adequate strategy
with some
negotiating
techniques and
counter moves.
10 points
9 points
O points
/ 10
Negotiation
Goals
No or weak goals.
Clear goals with
detail providing a
measuring point for
success.
Clear goals with
some detail provided
explaining goal and
measuring success.
7.5 points
7 points
O points
/7.5
Cultural
Approach
Limited or no cross-
cultural negotiation
techniques.
Thoughtful and
logical cross-cultural
negotiation strategy
with detail on how
to implement the
techniques.
Good cross cultural
negotiation strategy
which reflect
understanding of the
other cultural and
appreciation of how
to approach the
negotiation.
Criteria
Level 3
Level 2
Level 1
Criterion Score
7.5 points
7 points
O points
/ 7.5
Negotiation
Strategy
No or weak goals.
Comprehensive
strategy with
multiple counter
options (moves) and
approaches.
Adequate strategy
with some
negotiating
techniques and
counter moves.
10 points
9 points
O points
/ 10
Negotiation
Goals
No or weak goals.
Clear goals with
detail providing a
measuring point for
success.
Clear goals with
some detail provided
explaining goal and
measuring success.
7.5 points
7 points
O points
/7.5
Cultural
Approach
Limited or no cross-
cultural negotiation
techniques.
Thoughtful and
logical cross-cultural
negotiation strategy
with detail on how
to implement the
techniques.
Good cross cultural
negotiation strategy
which reflect
understanding of the
other cultural and
appreciation of how
to approach the
negotiation.
Purchase answer to see full
attachment
Objectives
For this assignment, you will negotiate and draft an international contract. The purpose of this exercise is to:
•
•
•
•
•
•
•
Negotiate an international sales contract.
Familiarize yourself with common contractual clauses.
Increase your awareness of the terms and conditions for an international contract.
Experience capturing key legal issues of concern for your business in a legal contract.
Enhance your appreciation of cross-cultural business dealings.
Refine your oral and written communication skills.
Improve your understanding of contract law.
You are required to submit four documents for this assignment with details outlined below.
•
Documents that Must Be Submitted to DROPBOX for Grading
Strategy/Goals Document (D2L) – 25 points. Use the first week of this assignment to prepare your strategies
and goals. You do not meet with the other side prior to completing your Strategy and Goals document. Do not
discuss your strategy and goals with anyone else in this class, you can bounce ideas off friends/family. Use a
bullet point format for the document and divide it into three sections – see samples below. For the strategy and
cultural approach, you can use a paragraph format if that works better to describe your approach.
•
Strategy. How do you plant to approach your first negotiation meeting from a strategy perspective? Add
some specificity and contingency planning.
Strategy
Set High Initial Price
Anchor
Win/Win
•
I plan to offer my best price immediately and explain why it’s a win for both sides.
Cultural approach. Will you do anything different based on the different culture? What? Why? I
understand that most of you are not aware of the Mexican culture in any significant details, so please send
a little time to research how you might approach any cultural issues and have a plan. One side is supposed
to be Mexican. I expect that side to do similar research and behave accordingly (basically do the same sort
of research that the American side does but with a view of noting how you would likely behave differently
and how you might approach an American company differently). This part of the exercise is more
research/academic based and you do not need to play the cultural role in your negotiation. Today’s
business environment expects understanding of various cultures without stereotyping and this assignment
asks you to practice walking that line.
Cultural Approach
Ask About Family
Direct Discussion
•
Comment
I plan to start with a very high price to allow room to negotiate to a lower price
Comment
I (US Company) plan to ask about the other side’s family prior to negotiating as I
understand Mexican culture is more likely to mix family and business and this
may be a more comfortable approach than our normal style of jumping right into
the business deal.
I (Mexican Company) plan to be more direct in my discussion of the business deal
than I normally am in an effort to accommodate a perceived interest in Americans
to get to the deal facts quickly.
Contract Provision Goals. What do you expect the price, quantity and other terms to be? Why? This should
include a list of the key provisions you believe are worth negotiating. Please use a chart as illustrated below.
Term
Price
Goal
$xx
Result
$xx
Explanation
Goal: I believe this is a reasonable price for our product and plan to achieve
this goal and will not negotiate below this point.
Result: (complete at the end of the project as part of the assessment). Add
a comment for your result after you complete the negotiation.
Add more
rows for
more terms
•
•
•
•
Draft Contract (D2L) – 25 points. Each person will prepare a draft of a contract based on the negotiation results.
Before completing the draft, you will have to have concluded your negotiations with the other side. I suggest
the actual negotiation should take no more than one hour, but you may take longer and it could be a series of
short meetings rather than one longer one. You are expected to reach a deal. Below is some detail on what’s
expected in the contract.
• Key Terms. Based on your negotiations, each student drafts a formal legal contract that includes the key
terms you agreed to with the other side. I understand that you are not lawyers and that we are not using
extensive class time to discuss contract drafting or contract terms. I expect you to review the sample
contracts on the website, look for a few more samples you may have (cell phone, apartment, car, find on
online, etc.) primarily to see how a contract looks and to get ideas for terms. Use the narrative provided
(your confidential information) to make sure you include terms that are key to your side. KEEP IT SIMPLE. I
expect you to borrow some clauses and ideas from what you find online but keep the legalese to a
minimum and keep clauses very short. I want to see enough that you thought of the issue and agreed to a
position. If you can effectively convey what you agreed, this skill will serve you well in giving a good
document to an attorney to draft an agreement for you in the future. That means you included the key
negotiated terms and what is important to you, but you allow the attorney to turn those items into
litigation proof documents.
Heading of Contract. There are many methods to introduce a contract, but think a bit about how to title it and
initiate the contact.
Signature Section. See next section below.
Signed Contract (D2L) – 25 points). The parties should meet to discuss and compare the written contracts. One
of the written contracts should be selected for the basis of the final agreement. One signed contact is handed in
for the two groups together. After any necessary negotiations and changes, the contract should be signed at the
bottom as follows (or using another acceptable format – this format is actually a bit clumsy but good to know:
Agreed to and executed this _____ Day of ____________, 2020.
•
XContraptions, Inc.
Camion Ranchero
________________________
By: ____________________
Its: ____________________
_____________________________
By:
_______________________
Its:
_______________________
Assessment against Goals (D2L) – 50 points. Each student also completes an assessment of how you did against
the student’s goals. This should be a short explanation of how you did in negotiating your key terms. Include an
explanation if the terms deviated from your goal. Please put together a table showing your key goals/terms and
result. Use the same table from your goals and add – don’t delete. Also in this document, explain any cultural
issues that arose in the negotiations (this part is only necessary if something actually arose and I will use your
comments in your initial goals document to ensure you considered cultural differences).
Term
Price
Add more
rows for
more terms
Goal
$xx
Result
$xx
Explanation
Goal: I believe this is a reasonable price for our product and plan to achieve
this goal and will not negotiate below this point.
Result: I achieved our goal on price, although partly by impacting my
quantity goal.
CONFIDENTIAL INSTRUCTIONS for ODD # STUDENTS
XCONTRAPTIONS, Inc.
You are the Vice President of Sales and Marketing for XContraptions, Inc. Your primary job is to increase sales of
XContraptions products. You are relatively new to your job and were hired, in part, because you were persuasive in
your interview with the Board of Directors that you could increase sales by expanding into new international
markets.
Background. XContraptions started its business in Minnesota selling snowmobiles, but expanded over the last
decade into all terrain off-road vehicles. The company has found success with its line of Traption All-Terrain
Vehicles (ATVs). The Traption line sells well among farmers and sportsmen. XContraptions remains primarily a
mid-western company with sales mostly congregated in the Midwest states. The Traption line has expanded
XContraptions market to customers throughout the U.S.; however, you face stiff competition from other regional
and national supplies and have struggled to grow at a pace that satisfies your boss (the President), the Board of
Directors, or the shareholders.
Opportunity. As part of your research into new markets, you attended an ATV conference in Santiago, Chile to
explore opportunities for the Traption in South America. At the conference you met with a Vice President and
Buyer for Camion Ranchero. Camion Ranchero operates a chain of 126 truck dealers. Its business has been
primarily to ranchers and farmers and accordingly it focuses its sales on off-road use. It currently sells pick-up
trucks, off-road motorcycles, ATVs and some other more unique use types of trucks. It sells throughout Mexico
and has recently seen an increase in its sales to the tourist industry. Small tour operators are buying some of its
ATVs in quantity to offer sightseeing tours or for adventure rides. You learned this through a short discussion with
the Buyer and you gave the Buyer your short sales pitch as well. You exchanged business cards.
The Buyer seemed genuinely interested in your ATVs and the Buyer’s questions demonstrated good industry
knowledge. Overall, you evaluated the Buyer as someone to take serious as you intend to do. The Buyer told you
that Camion Ranchero already sells a full line of ATVs that have sold well with sales increasing every year.
However, you know that your Traction models are far superior to Camion Ranchero’s current line so you are
confident your discussions will go well. You’re confident that if you can get Camion Ranchero and its customer to
try the Traption, they will love it, recommend it and buy again.
Competitive Environment. The market in the U.S. is very competitive with ten key providers. XContraptions ATVs
have an excellent reputation for quality and performance at a competitive price. The product line has performed
well, but the competitions’ offerings are comparable enough that it has been difficult to grow sales quickly.
Internationally, there are a lot of ATV providers that offer a much lower quality solution. You know your solution
competes well against those and you know that the competition you face in the U.S. has not expanded to Mexico
or South America.
The key selling criteria you use to sell the Traption line of ATVs are listed below.
•
•
•
•
High Performance. The full Traption line is designed for high performance. This means they have
sufficient horse power to perform at an optimal level, they can handle jumps, falls, steep hills and mud.
Although designed for sportsman and farmers the line has been used by some racers and off road
adventures that push the ATV’s performance to its maximum. These users have praised the performance.
Low Maintenance. The Traption line has a record of outstanding durability and low maintenance. The line
was built with the idea that the users need the Traption to perform consistently and cannot tolerate
downtime. The Traption line is built to last and not fail when needed.
Safety. The Traption line has state of the art safety built into every design. The Traption is built to prevent
rollovers with a low center of gravity and with an optional roll cage to protect both the machine and its
occupants if a rollover does occur. The Traption is built with state of the art brakes that automatically
control descent speed if the driver fails to properly engage the brakes.
Warranty. The Traption line comes with a three-year warranty that covers all mechanical issues.
•
•
•
Repair. The Traption line offers complete support for repairs with manuals, spare parts, and a technical
hotline for assistance.
Customization. The Traption line offers over 150 accessory options to customize the ATVs for different
uses and different preferences. The Traption line is built with standard attachment points allowing for
users to add and remove accessories easily.
Simplicity. The Traption prides itself on simplicity of operation. It’s a very powerful machine with a wide
array of options, yet it’s very simple for a first-time user to sit down and almost instantly become
comfortable with its operation.
Financials. You offer a full line of Traption ATVs with pricing ranging from $5,500 to $12,000 plus all the
accessories. Your net profit margin averages 10%. To simplify any potential negotiations, you plan to limit
discussion to the Traption ALLSPORT model. The Traption ALLSPORT is your best seller, most versatile and best
rated ATV. It retails for $7,500. XContraption sells the ATVs for 25% less than its retail price to its distributors so its
standard price for the Traption ALLSPORT is $5,625. XContraption makes additional money on parts and
accessories but that’s difficult to calculate and is not figured into your bonus calculation in any case.
Another consideration is manufacturing capacity. XContraption is committed to the Traption line (hiring you is part
of that commitment). It built a state of the art manufacturing facility that is only operating at 70% of its capacity of
approximately 25,000 ATVs a year. XContraption’s variable cost per unit of its Traption ALLSPORT is $4,000 (the
ALLSPORT model provides better than average margin for the business).
You have done some research into the Mexican market and have determined that your Traption ALLSPORT
requires no manufacturing changes to meet the market legal requirements. You will have to develop some new
marketing materials and have your user manual/warranty and other materials translated and printed in Spanish.
You estimate that the cost of this and other additional fixed costs associated with doing business in Mexico the
first time will cost you $100,000 in fixed costs. This is not a concern if you can obtain a large enough order to
spread the fixed cost over the units, however, at low quantities it would be tough to absorb.
Plus, shipping is a bit of an issue. All the Traption models are manufactured in the U.S. Assuming you can ship in
quantities above 1,000, you can obtain favorable shipping costs from your existing shipping vendor of your
standard U.S. rate plus $200 per unit shipped. You have traditionally paid the shipping cost to the dealer, however,
you are not sure who would pay shipping if shipped internationally.
Company Direction. You report directly to the President of XContraption and you discussed this opportunity with
the President. She said that “this is exactly the sort of opportunity we hired you to deliver – so make it happen.”
You raised some of the logistical issues with her, shipping, Spanish language issues, and price.” Her response:
We hired you to grow unit sales and revenue and you have some leeway here to make that happen.
We invested a lot in the design of the Traption ATV and the new factory and we need to increase
sales to recoup that investment and to get the plant operating at full capacity. The Board, however,
is used to a 10% margin so it makes sense to keep our wholesale discount the same or maybe even
increase the wholesale cost a bit to cover the extra logistical costs and work of selling to Mexico. We
certainly do not want to lose money on the deal so if you have to give at all on price don’t go below
our fixed cost. This had better be big to make it worth it, a 1,000 or more units a year. And
remember, we’re a relationship company so anything we do we do with a focus on the long term.
Make sure this is the type of company we want to work with for many years. You’re in charge. Good
luck.
Criteria
Level 3
Level 2
Level 1
Criterion Score
7.5 points
7 points
O points
/ 7.5
Negotiation
Strategy
No or weak goals.
Comprehensive
strategy with
multiple counter
options (moves) and
approaches.
Adequate strategy
with some
negotiating
techniques and
counter moves.
10 points
9 points
O points
/ 10
Negotiation
Goals
No or weak goals.
Clear goals with
detail providing a
measuring point for
success.
Clear goals with
some detail provided
explaining goal and
measuring success.
7.5 points
7 points
O points
/7.5
Cultural
Approach
Limited or no cross-
cultural negotiation
techniques.
Thoughtful and
logical cross-cultural
negotiation strategy
with detail on how
to implement the
techniques.
Good cross cultural
negotiation strategy
which reflect
understanding of the
other cultural and
appreciation of how
to approach the
negotiation.
Criteria
Level 3
Level 2
Level 1
Criterion Score
7.5 points
7 points
O points
/ 7.5
Negotiation
Strategy
No or weak goals.
Comprehensive
strategy with
multiple counter
options (moves) and
approaches.
Adequate strategy
with some
negotiating
techniques and
counter moves.
10 points
9 points
O points
/ 10
Negotiation
Goals
No or weak goals.
Clear goals with
detail providing a
measuring point for
success.
Clear goals with
some detail provided
explaining goal and
measuring success.
7.5 points
7 points
O points
/7.5
Cultural
Approach
Limited or no cross-
cultural negotiation
techniques.
Thoughtful and
logical cross-cultural
negotiation strategy
with detail on how
to implement the
techniques.
Good cross cultural
negotiation strategy
which reflect
understanding of the
other cultural and
appreciation of how
to approach the
negotiation.
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