Luna Case Study: Negotiating with Global Services

This case study involves Luna pens that were manufactured by Global Services without DGG's permission. Erika, a new employee at DGG, is tasked with negotiating with Mr. Feng to address the issue. The study explores the negotiation approach and conflict resolution methods to be used.

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LUNA PENA CASE STUDY
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Executive summary
The case study involves Luna pens that were abandoned by DGG, but later on, it was
discovered that the pens were manufactured by Global Service a company in Thailand that was
led by Mr. Feng in selling fake products. The case study entails analyzing the negotiation
strategy to be employed by Erika to enter into negotiations with Mr. Feng who is the head of
Global Services.

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Table of Contents
References.................................................................................................................................................14

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1.0 Introduction
The case study entails Erika who is a new employee at DGG tasked with negotiating on
behalf of the company following some findings she had unearthed while working.DGG had
acquired Luna, and until the death of the owner of Luna, Luna pens were being manufactured
under DGG in a different department. However, DGG decided to close the department for
manufacturing Luna as it found it unprofitable and that is how Luna ceased the market for pens.
However, as it was discovered later, Global services was making Luna pens which were deemed
fake and was thus to be sued or enter into negotiations with DGG to pay for using the Luna
brand.
2.0 Approach to negotiation with Feng
Fax Feng requesting a meeting with him in Taipei next week. Outline your understanding
that Global Service Company has built a considerable business using the Luna name
without DGG's permission. Raise the issue of back payments for past misuse of the name,
and a possible license or sale for future use
Writing to Feng and informing him of a meeting in a week would be appropriate. It
would also follow giving comprehension of the Global Service Company with regards to the
reputable business the company has made using the Luna brand without seeking DGG’s
permission.
Though Mann asserted is showing the unwillingness of his seniors at DGG to resurrect
the business of business pens, DGG would be happier if it got value for having its Luna brand
used. According to Schmidt, he found some of the files that confirmed the Luna brand had been
registered globally though this would have great significance in regions such as Europe, North
America and in particular Asian nations. Schmidt also found that some companies that had been
popular for counterfeiting had now begun to a crackdown in a bid to become transformed into

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being better trading partners though there were several differences in different places.
Specifically, there would be the question of Luna name whether it had been abandoned and if
another company could use it.
There is also the room for some punitive damages that could be won. Furthermore,
prosecuting such a suit was considered to be an expensive affair as asserted by Schmidt. It would
be appropriate to recruit the local counsel according to each country where the Lunas had been
traded illegally. However, the advocates would command to be appropriated an upfront fee while
the possibility of getting any award and collection of damages is an affair that would take years
to materialize. Making matters worse, lack of DGG to have its issues resolved through the courts,
it could lead to the company being liable for incurring the legal expenses of the winning
companies.
However, Schmidt affirmed that the threat of litigation was the only option that could be
used to lure Feng to come to the bargaining table. Erika thus was not surprised by the tone of
such a memo though it improved her judgment into understanding that she was not the robust
bargaining individual either with Global or any other potential customers who may be concerned
about the legitimacy of the Luna brand. The option to provide support for advancing an
aggressive legal suit aiming to vindicate DGG’s exclusive rights were not, and Erika could not
even recommend such a course of action.
It was reported that Alven Feng was a 58-year-old who managed the company as the
managing director of Global and was the eldest son of the pioneer of the company. Also, other
members of the family were part of the business dealings, for instance, Feng’s brother who
situated in Malaysia though Alven Feng was said to be managing the company like a dictator. In
one of the newspapers, Feng was photographed being awarded a community service award for

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being beneficial to the community. According to the translation of the publication, it gave a
flattering profile of Feng’s public service that made a good impression about the company, and it
was being said that the company had accumulated vast reserves that it wanted to use for
expansion.
Erika’s is perplexed of how she would begin a conversation with Mr.Feng now that she
was traveling to Southeast Asia and she thought that she would have reasonable time to discuss
some of the arising issues regarding the company. Erika remembers that during her time in
Texas and thought that she should have taken the advice from Schmidt to retain the Taiwanese
lawyer where the lawyer could file the suit regarding the trademark issue even though she did not
mean to have it prosecuted fully. Erika was confident that she could win the support of
Schmidt’s and Mann’s support through the use of such a strategy, specifically if it seemed like
the only appropriate method of gaining Feng’s attention.
However, Erika thought to herself that she should not have been so aggressive. She then
went on drafting various letters which she used for comparison. In one of the letters, it
summarized the situation surrounding Luna as she perceived it and threatened to have legal
action its course if Global failed to pay the damages for the infractions. In another version, it had
a friendly tone and was seeking to provide a business opportunity through a joint venture. Also,
in another letter, there was nothing that talked of the Luna Pen though it recommended that in the
context of DGG’s increasing presence in Asia where it had a presence, Erika wished to propose a
possible association with Global in handling computer products.
Fax Feng, introduce yourself and tell him that you will be in Taipei next week. Ask if there
is any convenient time to discuss your recent discovery that the Luna pen is selling well in

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the Far East, under his company’s marketing strategy. Let him know that DGG is
interested in some form of partnership with Global Services.
This situation calls for a negotiated form of solution and is the other best option. Since
Erika had received authorization from Mann to recruit an investigator in Tapei who could
provide more information regarding Global service and the whereabouts of Alven Feng it would
imbue her with all information needed when she meets Feng. Such an adventure took more than
a week to find an individual to prepare such a report and the other two weeks were used to make
the information available on Erika’s desk. It is through such a report that Erika learned that
Global Service was registered as a legal firm that was established in the late 1950s and was
overseen by Feng family in Taipei. However, the company was still privately owned; thus
financial information was not readily put in the public domain for perusal; however, the
knowledgeable analysts approximated that Global trading operations were more than US$21
million per year. The figures from the profits were a challenge to collect though the investigator
indicated that the returns range between 8% and 12% of the gross revenues.
Global had been in the manufacturing industry for many years though it served as the
intermediary that distributed the products of other companies. It is when an opportunity
presented itself and enable Global to distribute goods overseas in America in the 1970s. For
instance, the company became active in exporting toys to nations such as Taiwan and also in
other parts of the region. However, the company was out of the toy business as the Pacific Rim
was deemed more prosperous where it turned East to conduct its business. One of the most
profitable and lucrative business was said to be in the distribution of Luna pens which the
company both manufacture and distribute. Though there were no accurate statistics, it was

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estimated that Luna pens and other related commodities accounted for 15% of the international
sales.
The thought that Erika had of the advantages that she would be having Feng come to her
with regards to her having familiar territory, perhaps that would come at some later stage. The
thought of being on site to learn more about Global was a noble one. During her interview at
Global for the new position, Mann flattered her for her skills in handling individuals from
diverse cultures. She remarked that in her trip to Asia and other business meetings that she had
attended, they were introductory and no agreements and deals had been negotiated. However,
Erika was confident that this time would have to make business deals with Feng and other parties
that would be involved. However, Erika was not comfortable with the idea that she only knew
less about Mr. Feng and was even dissatisfied that she did not realize how Feng negotiated.
It is even encouraging that Erika had some negotiation books and texts which she used while
schooling in the US regarding working in unfamiliar cultures. Erika was ready to embark on
some cultures to understand how she could deal with Feng now that she had been placed in
charge of negotiating with Mr.Feng. Erika went further and found a book that entailed several
dialogues that demonstrated how individuals from different nations could dominate
conversations without having an understanding. Erika was keen to learn the dynamics involved
in communications such as those of the Chinese. Erika was also eager to learn of body language
which was crucial when dealing with Chinese related cultures.
The least course of action would be writing to Feng and asking not to sell Luna brand and
that DGG was prepared to file a lawsuit against Global Service. This would remove the
possibility of striking a deal and providing room for negotiations which would have more desired

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effect compared to using threats such as filing a suit where Feng can win as he can use the
premise that DGG abandoned manufacturing Luna brand.
3.0 What Conflict Resolution Method would you prefer to use, and WHY?
Negotiation entails bargaining with the other person directly. In other cases, it may
require hiring an attorney to negotiate directly on behalf of the other side. In negotiation, there
are no particular procedures that are to be followed, and one can adhere to procedures they set
for their own though it works best when all parties have a consensus and agree not to talk at the
same time and always keep calm. Depending on the situation, negotiations can take place in a
boardroom of the company if there is any or in the office. Negotiation enables people to be
involved directly in discussion and in matters that impact the company. It is the negotiated
agreement that becomes an enforceable contract.
The use of face to face method is imperative in this case. Erika has to set a meeting with Mr.
Feng to discuss the terms and conditions regarding the use of Luna.
Litigation
However, the negotiation may fail, and this is the worst possible scenario where Feng and
Global service refuse to negotiate to assert that DGG abandoned Luna and ceased making the
product with the brand name. In such a situation will be left with no option but to file a lawsuit
that is uncertain and this will be time-consuming and costly at the same time. To avoid such
circumstances from occurring, it would be unwise to begin the initial contact with a firm decision
like writing Feng that Global service has to cease its unauthorized utilization of the Luna brand
and that DGG is ready to file a lawsuit where appropriate (Oklahoma Bar Association, 2019).
Instead, it would be wise to state that DGG is aware that Luna pen is being sold under the
marketing and distribution power of Global Service and that DGG would be more than willing to
come to the dining table and negotiate the usage of Luna brand.

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4.0 Erika should adopt Which Conflict Management Style, and WHY?
Accommodating
The accommodating style entails forsaking one's needs or desires in exchange for those
of others. In this regard, one would be putting the concerns of others before theirs. This style
becomes useful when one is persuaded to give in to the demands (Amaresan, 2019). The
accommodating form can be used when one cares less about a particular issue compared to
others or where one feels they have no choice but to agree to other people’s point of view. For
instance, in the case of Erika with Mann where she thought that she did not understand Mann
enough to challenge his statements directly was the right way of managing a disagreement that
would have ensued (joo Kim, et al., 2015). Erika also used the accommodating style when she
thought that might be Mann was right regarding the issue. Erika was able to handle significant
sources that she found through LEXIS/NEXIS that described the burgeoning demand in the US
via fountain pens that had begun reappearing in other parts of the world. The yearly sales in
America had been approximated at 6.4 million units in 1978 following the onslaught with
regards to first, ballpoint pens and then the felt tips. However, in the 1980s, the trend reversed
particularly with the sales of luxury writing products. Erika had a fund that in 1990, more than
25 million fountain pens had been sold in the US market. The Mont Blanc that dominated the
high-end American market with general sales increasing and doubled since 1990. It is from such
information that Mann was concerned whether Luna had got out of business based on the ground
floor. Erika to back the point demonstrated how Luna would probably be in the same segment
with other brands such as Osmirod, Platignum and other Parkers categorized as low priced.
It is during this time that Mann and Erika sketched some options that they ought would
work for DGG. The first entailed DGG filing a suit against Feng and Global a move that could
see the company be compensated for the damages regarding violations of trademarks (Smith,

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2015). The second option involved negotiating some settlement with Feng with regards to prior
royalties and also in the right to future use of Luna brand either via some on-going licensing
arrangements. The third option was for DGG to seek some other businesses that would be willing
to purchasing the goodwill of Luna brand.
Collaborating
Collaboration as a style of management aims to find a solution that will anticipate the
demands of all parties. As opposed` to seeking a middle ground remedy, the collaboration seeks
for a solution that leaves all parties satisfied and always leads to a win-win situation (Caputo, et
al., 2018). The partnership is most appropriate when different perspectives demand to be
addressed, and there is an essential relationship between the parties where the final remedy
would be too critical for all parties to be displeased, or where the beliefs of many stakeholders
have to be represented.
It is after traveling to Frankfurt that Erika wrote a postscript asserting that she had
discovered some interesting information with regards to the Luna matter that had been referred to
her. She later met Mann who was impressed with the comprehensive report she had prepared.
Erika waited for the agendas to be covered then brought the topic of Luna regarding the items
she had found particularly from Malaysia and Hong Kong. It is at this time that she produced the
correspondence with Cecil Armstrong. She asserted that her letter was in response to buy some
time so that she could gather some information regarding the whole situation. Mann
recommended that they review some of the DGG’s options in light of affirming that Global had
been involved in some shady business selling counterfeit goods where Erika’s response was that
they ought to bring a lawsuit for Global’s violation of DGG’s trademark though Erika expressed
concerns that such a process would be expensive and time-consuming. However, she remarked

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that they could always use threats in the name of legal suits as bargaining leverage. Erika is
referred to the legal department, and she cooperated as a sign of subduing to the authority above
her.
5.0 What further information might you need before contacting Feng, and how might you
obtain it?
Also when Mann made it clear that his superiors did not want to bring back the fountain
pen business despite DGG wishing to get whatever value it would get from the Global for using
Luna brand, Erika knew she had the best ground that she could use to get the suit or any other
action to enable DGG to get covered for whatever damages required. However, Erika backs
down and follows the orders, and this is a strategy that she has to muster in dealing with her
superiors at DGG.
DGG needs first to figure out the brand value of Luna by conducting brief market
research. It is through doing so that DGG will be better positioned to evaluate the brand power
impacted by the total sale of Luna pen manufactured by Feng and use such information in
developing a plan to guide the negotiation. Such data can be obtained from the knowledge
observers. DGG can also conduct a series of a survey among customers seeking to establish their
willingness to purchase a particular pen with and without the Luna brand. Also, it would be a
brilliant idea to solicit potential investors willing to purchase the Luna trademark. Data regarding
potential buyers could later be employed as a tool to pressure Feng and his company where
deemed necessary.
6.0 Conclusion
It is also imperative to note that selling Luna brand would not harm the company through
contacting a firm in pen manufacturing business, DGG can seek information regarding potential
investors willing to purchase the Luna brand and spread the news that DGG is selling Luna

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brand. As a last resort, DGG should investigate the legal grounds that DGG stands in such a case
particularly regarding the Taiwanese court. It would also be essential to calculate the odds of
winning if DGG filed a lawsuit and how long it would take and the estimated cost of such an
affair. The answers to such questions are crucial factors in determining whether to file such a
lawsuit or not. If the odds are against DGG, it will be prudent to use the negotiation approach
cooperatively. Conversely, if the odds favor DGG, then DGG could go ahead and file a suit to
use it both as a leverage to put pressure on Global Service and as a last resort to settle this issue,
and such information can be sourced from the corporate legal department.
References

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Amaresan, S., 2019. 5 Conflict Management Styles for Every Personality Type. [Online]
Available at: https://blog.hubspot.com/service/conflict-management-styles
[Accessed 9 May 2019].
Caputo, A., Ayoko, O. B. & Amoo, N., 2018. The moderating role of cultural intelligence in the
relationship between cultural orientations and conflict management styles. Journal of Business
Research, 89(13), pp. 10-20.
joo Kim, E., Ayano , Y., Min-Sun , K. & Akira , M., 2015. Effects of taking conflict personally
on conflict management styles across cultures. Personality and Individual Differences , Volume
72, pp. 143-149.
Oklahoma Bar Association, 2019. Methods for Resolving Conflicts and Disputes. [Online]
Available at: https://www.okbar.org/freelegalinfo/disputes/
[Accessed 9 May 2019].
Smith, D. A., 2015. https://www.okbar.org/freelegalinfo/disputes/. [Online]
Available at: https://www.makingbusinessmatter.co.uk/resolving-conflict/
[Accessed 9 May 2019 ].