CASE STUDY 2
Storyboard-Text
- CASE STUDY 2: COMPROMISE STRATEGY IN POLAND
- SWEDISH MANUFACTURER
- POLAND RETAILER
- But miss, we cannot reduce the price for these furniture. If we do so, then we will have to incur losses.
- How is that possible sir? 3 months ago, a German manufacturer offered a better price for the same quality furniture. Why can't you sir?
- Can we negotiate on the price sir? We would appreciate if you agree to reduce the price for the furnitures supplied.
- For your kind information, their offer is still open!
- However miss, the German manufacturers offer was 3 months ago; it's past. Currently, I believe that they won't offer the same price. Better than us, NOT AT ALL!
- In order to solve this problem, shall we compromise the deal miss?
- I suggest that if you agree to buy our shipment at stated price, we will guarantee immediate delivery and also share your retail advertising and promotion costs on our furniture on a 50/50 basis!
- Well...that sounds good and compromising too!
- A Swedish manufacturer of bedroom furniture is holding negotiations with a long-time business associate, a furniture retailer in Poland. At stake is a $2 million export shipment of bedroom furniture manufactured by Swedish company.
- Thank you for accepting my offer miss. Yes, sure we shall proceed with our contract.
- That was a good deal! I'm really satisfied with your deal sir. So, shall we proceed with signing our contract then?
- Early in the negotiation the parties clash on price. The Swedish firm insists that it cannot reduce the price without making a loss. The retailer counters by disclosing that three months ago it was offered a better price for similar-quality furniture by a well-known German manufacturer and that the offer remains open.
- The Swedish export manager points out that, although three months ago the German competitor offered a better price than the Swedish company, that was three months ago. Thus, export manager suggests a compromise. If the retailer will agree to go ahead with purchasing the Swedish shipment at the stated price, the Swedish firm will guarantee immediate delivery and will also agree to share the retailer’s advertising and promotion costs for the Swedish furniture on a 50/50 basis.
- This compromise solution, which creates value for both parties, turns out to be acceptable to the Polish team and the negotiation quickly proceeds to the contract stage.
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