Negotiation: Strategies, BATNA, and ZOPA

Negotiation
Name of the Student
Name of the University
Author Note

NEGOTIATION
Stage 1:
Answer 1:
Batna, the best alternative to a negotiated agreement has an increased effect in the
negotiation process and the power that one party possesses (Pinkley et all 2017) BATNA as a
concept was introduced by Fisher, Ury and Patton in the early 1990s implies the other available
options to negotiating the current agreement, these may or may not be ones lase resort. The
presence of BATNA is what determines the kind of No that one can use in a negotiation
(Sebenius 2017).
In the present case Rory McIllroy’s Batna has a deal with Fitness Plus for a contract fee
of $800,000 after the projected 15% hike. If the contract with DeGrandis fails to be negotiated in
favorable terms Rory can always resort to the contract with Fitness Plus. Even if the projected
15% hike in contract fee is not achieved there is still an offer for $695,650, so in no instance can
a contract be entered with DeGrandis Sporting Goods for lower than this value.
Reservation value is the lowest point of transaction for a party in a negotiation (Jeong
2016), Rory’s reservation value is $800,000 as the contract obtained by Fitness plus is of
$695,650 but they are certain of obtaining a contract over 15% of this value. A further Facebook
post confirms that they expect 15% hike from their offer price. Any offer made lesser than this
sum of $800,000 would be disadvantageous for him. This therefore sets the reservation point for
Rory in the negotiation.
Answer 2:
Based on the interactions and email conversations with Phan Nguyen Ho, the agent of
DeGrandis Sporting Good it can be deciphered that they benefit from a contract signed for a
period longer than 3 months and for a value that is around $700,000 or lesser. This demonstrates
the aspirational level of the company (Barry and Freidman 2006)
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NEGOTIATION
BATNA being the other alternatives available to the Sporting Company can be contract with
another sports star in this case Tiger Woods for an endorsement.
Reservation value for the sellers as per Prado and Martinelli is the point that determines when
the offeror is willing to walk-away. The value quoted by DeGrandis on their website is
$1,058,820. A Facebook post by them additionally states that they can get Tiger Woods with a
15% reduction on his contract fee. This value cannot be conclusively determined.
Answer 3:
ZOPA is the range within which a negotiate can take place. It lies between the
reservation point of both the parties. The ideal ZOPA is a mid-point between these values as it
ensures equal advantage for both. The further away one is from their reservation point the more
valuable the deal is. Any point that does not fall in the ZOPA will be rejected outright (Patel and
Rubin 2016)
In this instance the ZOPA is between $800,000 to $1,058,820 when Elite adapts a goal-
based approach as propounded by Kirk, Oettingen and Gollwitzer. However, it is not easy to
know for sure the reservation point of the other party.
The zone of possible agreement does not exist in negotiations about the period of the
contract. It is determined that at 3 months both the parties are neutral however more than 3
months is advantageous only for Elite and Rory the reverse is true for DeGrandis. There is
therefore no scope for a negotiation on this point unless either party is induced by some other
more lucrative offer.
Strategy:
To have a successful negotiation process negotiation strategy triumphs negotiation skill
(Kennedy 2017). This must be developed keeping in mind the complexity of the scenario and
the related variables and outcomes and their impact. The impact of time and its impact on
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