Business Negotiation Strategies: A Comprehensive Guide

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Table of Contents
INTRODUCTION............................................................................................................................. 3
TASK 1............................................................................................................................................ 4
1. WHAT IS A NEGOTIATION IN THE BUSINESS CONTEXT..........................................................4
2. THE KEY STEPS FOR NEGOTIATING AND GENERATING BUSINESS DEALS...............................5
3. THE CONTEXT OF NEGOTIATION AND THE IMPORTANCE OF KEY INDIVIDUALS IN A
NEGOTIATION............................................................................................................................ 7
4. HOW TO GAIN THE BEST DEALS/CONTRACT..........................................................................9
5. HOW TO GENERATE NEW BUSINESS AND WIN DEALS.........................................................11
6. TENDERING FOR CONTRACTS.............................................................................................. 12
7. PREPARING FOR NEGOTIATION THROUGH A REQUEST FOR PROPOSAL (RFP) FORM.........13
8. RESPONDING TO RFP – CREATING A BUSINESS PROPOSAL.................................................14
9. THE CONTRACTUAL PROCESS AND AGREEMENTS...............................................................15
CONCLUSIONS..............................................................................................................................16
REFERENCES.................................................................................................................................17
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INTRODUCTION
In an organizational context, the deals and the contracts have their own importance which can
be understood from the fact that the deals and the contracts are the deciding processes which
result in the effective conduction of business process and statements which are made during
the business (Mejia-Arauz et al., 2018). In this unit, the pitching and negotiation will be studied
from different aspects in order to enable the learners to win contracts on agreeable terms. The
pitching and negotiation skills are essential in order to convince the customers and business
partners regarding business decisions. These are helpful and used at the time of making deals
with the officials in an organizational context. In this report, the skills required for the
successful conduction of the negotiation process will be studied. Along with that the main
elements and key steps for the successful conduction of the negotiation and pitching process
will also be studied.
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TASK 1
1. WHAT IS A NEGOTIATION IN THE BUSINESS CONTEXT
In an organizational context, there are various kinds of dealing and agreements which takes
place for the effective conduction of the business process. While conducting the business
process the personnel of the organization put forward their opinions and viewpoints which
results in disputes and arguments (Coppens et al., 2014). In order to avoid these disputes and
arguments, the negotiation is the process in which the officials of the organization compromise
to the agreeable term and make decisions which are termed as a negotiation process. Through
the negotiation process the officials settle their differences and agree on a decided term and
according to that, the operations of the organization are carried out further.
The need of negotiation is for the effective conduction of the business process as the business
in any organizational context can be flourished with the mutual support of the both the
organisation’s end and the customers’ end (O'Rourke, 2010). The negotiation is carried out in
different fields of business such as at the time of buying raw materials from the suppliers and
also at the time of deciding prices of the goods and products to the customers. As a business
start-up advisor, the effective advice to the small business organizations is that the
entrepreneurs must be able to pitch the investors in order to invest money in their business
venture.
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2. THE KEY STEPS FOR NEGOTIATING AND GENERATING BUSINESS DEALS
There are five main and key stages for negotiating and generating the business deals which are
stated and explained below:
Stage 1 – Prepare
Preparation is the initial stage negotiating as well as other things also. In spite of that, it has
been seen that people often skip this stage and jump to information exchange and bargaining.
Preparation is the stage where the strategy of negotiation is made and according to that the
progression can be made effective (Frankel and Forman, 2017).
Stage 2 – Information Exchange
This is the process which takes place when the person moves forward for the negotiation and
begin to engage with the other party with which the negotiation is to be carried out.In this
stage, the information is exchanged regarding the needs of both parties. Mutual interests and
positional agendas are discussed in this stage by exchanging the required information which
helps in the bargaining process (Frankel and Forman, 2017).
Stage 3 – Bargain
This is the essential part of the negotiation process in which the demands are discussed from
both the sides and various facts are presented to each other and bargaining is carried out by
both the sides. In the process bargaining give and take methodology is used and the person
with the point of view of just taking without giving fails in the process of bargaining and it also
can put the negotiation to an end.
Stage 4 – Conclude
This is the stage where the agreement is made according to the confirmation of the demands of
both the parties. In this stage, it must be made sure that to what extent the opposite party can
fulfil the demands as decided and follow the agreement. The insurance is made in this stage
regarding the capacity of the other party to complete the agreement. It is essential and
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mandatory in this stage to thank the other party for showing interest in negotiation and it is
irrelevant to the agreement (Frankel and Forman, 2017).
Stage 5 – Execute
In this process, the agreements which are made on the demands are to be executed. The
execution process is the stage in which the chances for the future negotiation are made by
completing the promises as decided in the negotiation. It is necessary for both the parties to
carry out the actions as decided in agreement in order to strengthen the relationship between
each other (Frankel and Forman, 2017).
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3. THE CONTEXT OF NEGOTIATION AND THE IMPORTANCE OF KEY
INDIVIDUALS IN A NEGOTIATION
The importance of key individuals in the context of negotiation can be understood from the fact
that the roles are to be played by the stakeholders of the organization which are the employees
and the customers of the organization. The importance of the individuals in a negotiation can
be understood with the help of studying the roles which are stated below:
Leader
This role is played by both the parties such as the employee from the organizational end and a
customer on behalf of the customers. There are two main tasks of the leader which are
coordinating with the people and to be the face of the negotiating party (DeMarr et al., 2013).
Critic
This is the role of seeing flaws and negative points in the deal which can result in the frustration
of the other party. But on the contrary, this role is also important as the critic can be right and
at that point, the leader intervenes and sometimes agrees with the critic on any point.
Related
The role of relater is to maintain a friendly relationship between both the parties. The task of
relater is to maintain peace while the deal goes on by establishing friendly relations between
the members of the opposite team. Relater often neglects the harsh and negative elements in
the dealing (DeMarr et al., 2013).
Expert
This is the role which is also played by both the parties as the expert analyze the agreement and
inform its respective party about the positive and negative points of the agreement in the near
future.
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Recorder
The role of the recorder is to take notes of the statements which are being made by both the
parties. Both the parties have their own recorder for the sake of authenticity of the
statements. The recorder reminds both the parties regarding the statements made (DeMarr et
al., 2013).
Builder
The builder is the person who ensures the successful conduction of the deal by providing the
facts and figures to the leader thereby assisting the leader in order to enable him/her to make
effective decisions.
Observer
The observer watches the actions of the opposite party which are made by the members on
each and every point of the deal (DeMarr et al., 2013). It is the duty of the observer to present
each and every aspects of the deal to the leader once the agreement is made.
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4. HOW TO GAIN THE BEST DEALS/CONTRACT
In order to get the best of the deals or the contract there are following points which are too
focus:
Setting objectives when negotiating with suppliers
First and foremost essential step of the successful and best deal is to set objectives for the
negotiation before starting the process of negotiation.
Understand the supplier
After that, it is mandatory to understand the different aspects of the supplier or the opposite
party (Wellin, 2016).
Developing a negotiating strategy
In order to initiate the negotiation an effective and useful strategy is to be developed by both
the parties.
Negotiating team
This is an important and effective process of each and every task to make an effective
negotiating team with the members having the required skills in each and every area.
Conduct negotiations
After the formation of a negotiating team, the conduction of negotiation is carried out in which
the demands are put forth to the opposite and the use of bargaining power is done (Wellin,
2016).
Negotiating on price
Since the process is being carried out in a business context pricing strategy hold precise
importance. In order to make sure the effective conduction of the negotiation process the price
must be negotiated to prevent the future possible barriers (Wellin, 2016).
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Running checks on your supplier
Before confirming the agreement it is important to make sure about the capacity of the
opposite party to complete the agreed actions and demands. This process is deciding on the
successful conduction of the negotiation process (Wellin, 2016).
Drawing up a contract for your purchase
Once all the steps are carried out an official document is made for the signing of both the
parties in order to confirm their approval. Typically the document contains the following
informational data:
 Details of the price and the demands.
 The description of the rights of both the parties while being in the agreement (Wellin,
2016).
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5. HOW TO GENERATE NEW BUSINESS AND WIN DEALS
For the generation of the new business, the first and foremost procedure is to make a plan
containing information about the suppliers and the customers. The planning of purchasing of
the raw materials from the suppliers is made and meeting with the different suppliers are held
and one of the suppliers is chosen based on the suitability (Werbach and Hunter, 2012). Once
the information of the suppliers are gathered and the selection of the supplying party is made
the next procedure is to gather informational data regarding the customers. There are different
methods of data gathering such as the interview of the customers and the surveying method.
After the collection of data, the deal with the supplier is made regarding the raw materials and
the pricing of the raw material. In order to make the deal successful, it is important the
negotiation team plays its role in each and every aspects of the business. The supplier must be
made to felt reliable regarding the possibility of success of the business which will appeal them
to establish relations with the party carrying out business and that can result in an agreement
of the suppliers to the demands thereby resulting in the successful agreement and deal.
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6. TENDERING FOR CONTRACTS
For successful tendering for the contracts there are following steps which are to be carried out
by the entrepreneurs:
Finding out about contracts
This is the process in which the information is gathered regarding the tenders as the
information of the private sector tender can be made available by establishing contacts with
the potential customers (Schilizzi and Latacz-Lohmann, 2016).
Should you bid for a tender
As the bidding of the tenders is carried out and according to that, the tender is assigned. In
order to make sure about the bidding of the tender it is important that the confirmation and
calculation of the profit in the tender is to be calculated than only the bidding must be
proceeding.
Find out what the client wants
In order to confirm the demands and the needs of the clients the meeting with the customers
must be held or at least they are to be talked about once. The information regarding the
demands of the customer can add value to the tender (Schilizzi and Latacz-Lohmann, 2016).
What to put in your tender
In order to make sure about the assigning of the tender it is important to add various elements
and policies in the tender so that the assigning party finds it to be right and profitable to assign
the tender (Schilizzi and Latacz-Lohmann, 2016).
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