IPK COLLEGE: Facebook & Instagram - Negotiation Context & Strategies

This report evaluates the context of a negotiation, identifying the information required to prepare for a negotiation, using Facebook's acquisition of Instagram as a case study. It begins with company overviews, legal structures, and mission statements of both companies. The report determines what negotiation is, why it occurs, and who the key stakeholders are, emphasizing the importance of negotiation skills in business relationships. Furthermore, it evaluates the key steps for negotiating and generating deals, including preparation, opening phase, bargaining phase, and closure phase, highlighting the importance of understanding customers and incentivizing existing ones to achieve successful deals. This document is available on Desklib, where students can find a wealth of resources, including past papers and solved assignments.

IPK COLLEGE
LO1 Evaluate the context of a negotiation and identify the information required to prepare for
a negotiation
a) Company overview
Facebook is a American company which operates as an online social networking service throughout
the world, this app allows the users to tag other users in their own content , the others function of
Facebook was Facebook messenger,Facebook story. It was founded in 2004 by Mark Zuckerberg,
and the co-founder were Eduardo Saverin, Dustin Moskovitz, and Chris Hughes, its headquarters are
in Palo Alto, California. Facebook delivered to the public in 2012 and has become one of the world's
largest companies with a market share of $507.92 and a net income of $18.5 billion on $70.7 billion
of revenue.(Hall, 2019).
Instagram is a American company which operates as a photo and video-sharing social networking
service throughout the world. Instagram was founded by Kevin Systrom, Mike Krieger in 2010 .It is
a photo and video-sharing social networking service that launched in October 2010 on IOS devices
after that the service of Android devices was released in April 2012. It is a mobile app platform that
allows users to upload photos and videos to share about their daily life.
In addition,the account's posts can be shared publicly or with the close followers/friend setting. In
order to make closer friendship with sharing interactive ,this app allows the users to tag other users
in their own content, the others function of Instagram was IGTV, IG STORY, IG HIGHLIGHT.
Instagram’s headquarters are in Menlo Park, New York and San Francisco(About Us • Instagram,
n.d.).
b) Legal structure and ownership
Facebook was a partnership business ,the founders were Mark Zuckerberg(CEO )， Eduardo
Saverin, Dustin Moskovitz, and Chris Hughes,all of there were students at Harvard
University, they were roommates while they found Facebook in their dome. Four of these
shareholders are investment management companies and one is Facebook
co-founder(Hall, 2019).
Instagram was a partnership business ,the founders were Kevin Systrom and Mike Krieger. Kevin
Systrom served as CEO for 8 years,he graduated from Stanford University, and Mike Krieger is the
co-founded Instagram and served as Instagram's Head of Engineering for 8 years(About Us •
Instagram, n.d.).
c) Mission statement
The Mission of facebook is to give people the power to build community and bring the world closer
together, while their vision is to make people use Facebook to stay connected with friends and
family, to discover what’s going on in the world, and to share and express what matters to
them(Skrabanek, 2020). The mission statement Instagram is to capture and share the world’s
moments, by the reason of the mission Instagram leading the world of creating visual impressions
that make all its users with long-lasting memories(MSA, 2019).
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IPK COLLEGE
P1 Determine what is a negotiation, why it occurs and who the key stakeholders are
during a negotiation process.
Negotiation is the decision-making process among interdependent parties, the best of
negotiation relationships that they are willing to give and take. It is a process by which compromise
or come out an agreement while avoiding argument and dispute. In addition, negotiation is a process
in which two or more parties solve a dispute in the process of collaboration or misunderstanding of
business affairs, and come to a finalized mutual agreement , its aim is to promote peace rather than
create fight.
Negotiation can occur in any business situation. It occurs when there is more than one possible
outcome, the beneficial of profit in business, and from a situation in which two or more parties have
an interest. Negotiation occurs among a buyer and seller. For example facebook company willing to
spend $1 billion in cash and stock to buy instagram, the owner will need to conduct the negotiation
during the process.
Business negotiations can occur between partners in business or business owner with customers,
inter-departmental or team discussions inside the company in order to determine and clarify the
same aims, identify the process of task and allocate the limited resources. In addition, it can occur
during management and staff,or even the discussions between collaboration from a company to
outside suppliers. Moreover, it can happen when discussions between management and trade
unions, for example, the dispute of wages, and during the recruitment and selection process from
HR manager with the candidate to the business until the interviews session(Michael, 2007).
Besides, both business relationships will determine through the process of negotiation. A successful
business depends on having good negotiation skills. In order words, personal negotiation was very
important during business negotiations. For example, the Facebook company negotiating with
Instagram and agreed to become a business partner in 2012, they have the good negotiation skill
therefore they can join together without any dispute or legal problem during negotiation and known
both of them have many users as their company advantage and strong capital base in order to make
their business journey smoothly.
Another example,Mark Zuckerberg was a very good model as a negotiator because he promised to
Instagram that build and grow Instagram independently, and provide the service that not share the
Instagrams on Facebook, while to have followers and follow people separately from the friends on
Facebook(Contributor, 2012).

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IPK COLLEGE
Stakeholder is someone with a vested interest into a business. Either they have a financial stake in
the product or holding the stake in the form of money or they are responsible for the output,it is
legal. For example,before 2012 there were only 27 million registered instagram because Instagram
was only open for the IOS users, after Instagram for Android launch, Instagram was going to get to
50 million registered users in the first 24 hours.
In addition, Facebook bought Instagram, they attracted more users to increase their position as a
social network, not just a photo-sharing app and some users were doing more of the daily sharing
activities on Instagram rather than using Facebook.
Besides, the stakeholder can be the customer also for example, the stakeholder during the
collaboration the Facebook and Instagram company, the stakeholders were the customers of both
parties, because the facebook owner Mark Zuckerberg promise the all parties customer for building
the best experience for sharing photos offer the best experiences for sharing beautiful mobile photos
with people(Contributor, 2012).
* Student able to determine what is a negotiation, why it occurs and who the key stakeholders are
during a negotiation process.

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IPK COLLEGE
P2 Evaluate the key steps and information required for negotiating and generating deals.
Stage 1: Preparation
Before starting negotiation with another party, one must have to start the preparation, this is the most
important step for a negotiator because aware and reduce the potential of the conflict, for example,
to understand the history of the people involved and their perception of the conflict expectations
from the negotiations.
In addition, the first stage in a negotiation process relates to planning and preparation. It is also the
stage that the party decides who is the objective, what are the minimum expectations, how much
they will spend and who they are going to proceed the negotiation. Preparation is instrumental to the
negotiation process more smoothly, because as a negotiator that being well-prepared can make the
negotiator become more confident during the negotiation.
Preparations for the negotiations consist of collecting relevant information, obtaining the required
authority or permission and trying to understand the background / history of the objective, having
intense discussions and collecting details of the previous negotiations on similar issues and even to

sketch the question that need to be asked during the process of negotiation.
Stage 2: Opening Phase
In this step, is the beginning of defining the ground rules and procedures with the other party over
the negotiation itself that will do the negotiation. Also, the two parties come face to face. Each party
tries to make a first impression to another party and influence their thinking at the first opportunity,
and impression.This phase is important because it involves both negotiating parties presenting their
case to each other.
However, opening consists of two phases which is the rapport building and probing. Firstly, the
rapport building is the process of knowing each other, two parties are going to sit together to
negotiate. Therefore, introductions need to come out, and names and backgrounds are noted.
Probing means each party tries to know about each other and provide the prepared open-ended
questions. They get to know the needs and expectations of one another, and they often will ask the
question straight to the point. The more they listen and survey, and they will appreciate the other
party’s stand or position. For example the question was “what do you suggest”,‘what is the time
frame for the company..
Stage 3: Bargaining Phase
In this stage, the negotiation process was to enter the actual give and take in trying to hash out an
agreement. During the bargaining phase is to come closer to the objective that intention. In order
words, the two parties will ask lots of questions because they are more interesting for the same aim,
such as the product and service. It is the stage when the negotiating teams really sit down and talk it
out. Therefore, usually in this step the dispute and argument will form because of the different
position, mind set , and viewpoint but it will need to depend on the different culture,lifestyle or
maybe will happen the misunderstanding of expression such as the different language and the way
of talking.
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IPK COLLEGE
Bargaining is about the process of discussion about give and take. Each party will be prepared to
recognize something and provide what will be gained for the desire. In addition, in this step, it needs
to be logical in one‘s approach and frame it clearly and sometimes need to prepare for the
arguments. When both the parties are tough negotiators, deliberations become more challenging and
progress becomes slow.
Stage 4: Closure Phase
This is the final step in the negotiation process, it is formalizing the agreement that has been created
and developing and procedures that are required for implementation and monitoring In order words,
the closing phase of a negotiation represents the opportunity to capitalize on all of the work done in
the earlier phases.
The settlement stage and work the closure which means the negotiating parties come to the stage of
settlement or agreement. The final terms as agreed transfer into document and the agreement gets
signed.It also involves the agreement that is represented in which both parties formalize in a written

contract. Moreover, reviewing the negotiation is as important as the negotiation process itself.
Therefore,it was necessary to take the time to review each element and find out which process was
going well and figure out if anything needed to be improved.
Negotiations often are compromises and sacrifices. Neither party should accept that not every
negotiation will go smoothly as totally as per their expectations by the expect a settlement or deal.In
addition, a good negotiator views the consequences in the proper perspective and takes the gains and
compromises as the opportunity and challenge to enhance their own negotiation skill(Characteristics
of Negotiation and Steps of Negotiation Process | Management Study HQ, 2013).
The key steps of negotiating for generating deals and winning new deals which is to know your
customer because if a company gets to know their customer, they can target them as interested
customers and improve the ability to win new customers, while expanding the future market
opportunity. For example, to understand based of the age, geographic location, education level
and job title of the customer.
Besides, to incentivize existing customers it refers to reward the existing customer such as giving
the discount price of the products and service because the best ambassadors of the business are
the existing customers, their function is to introduce the product and service to the family and
friends, therefore, it will increase to the sale of the products and services,raise the company
growth,and to meet diversity customer while explore various preference.
In addition, is the networking it refers to build the relationship between company and customer.
A company can connect to them through social media , because it is the fastest and most effective
way to understand the customer needs and wants while bringing more related new customers
and expanding the distribution network.
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IPK COLLEGE
Besides, is to explore different pricing models. This method allows all the marketers to explore
different pricing models for every single target market, in order to fulfill the satisfaction of
every customer throughout the world, because different customers have different perspectives and
mindset. In addition, a company should always offer a cheaper price to attract the customer’s
attention, to compete with the competitor, to maintain loyalty from the customer to the company
while it can reinforceable the customer base for the company sustainably in the long term.
*students able to the key steps and information required for negotiating and generating deals.

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IPK COLLEGE
M1 Present a concise rationale for the negotiation process, including detailed steps that
organisations go through during a negotiation process and the information required in
preparation.
The rationale of the negotiation process because it can help the negotiator to identify and plan
every step for negotiation, plan before fail and fail before plan, such as to the way to solve the
conflict, risk management, to understand the cross-culture behavior and language during the
negotiation process in order to prohibition of happening any worst outcome like bias.It also can
guide the both party during the dispute, because before the closure phase for running overall
negotiation process

was required the both parties to sit together and discuss and come out a solution therefore, it can
make both parties to understand each other slowly, and improve the negotiation skill, it beneficial
the both negotiator in currently and future negotiation.
Stage 1: Preparation
Before starting negotiation with another party, one must have to start the preparation, this is the most
important step for a negotiator because aware and reduce the potential of the conflict, for example,
to understand the history of the people/ organization involved and it is related to planning and
preparation. It is also the stage that the party decides who is the objective,who they are going to
proceed the negotiation and what are the minimum expectations, how much they will spend.
Preparations for the negotiations consist of collecting relevant information, and trying to
understand the background / history of the objective, having intense discussions and collecting
details of the previous negotiations on similar issues. For example,Mark Zuckerberg (Facebook
CEO)before decided to spend money for purchases on Instagram, they try to understand the
history and the people inside Instagram company start from 2011,which is the co-founders were
Kevin Systrom and Mike Krieger while the company only has 13 employees.The reason why
Mark Zuckerberg need to know the owner of Instagram is because he can realise who is going to
proceed the negotiation together.
In addition, the expectation is depend on the great revenue potential of Instagram with many
opportunities to get public attention and other tools that match with Facebook. Also, Facebook is
likely hoping Instagram can grow into its fourth billion-user platform that can beyond the
expectations from Facebook itself, and Messenger while Facebook also hopes Instagram can stand
as the backbone for helping Facebook to grow in the future.
Moreover, Facebook is willing to spend $1 Billion to make a deal with Instagram, in order to gain
photo sharing service. In addition, in the aspect of collecting the related information on instagram, it
was superior as a social network platform for phone devices and it had a very good interface to
the user. In addition, it was the preference of more celebrities to contain the expansion potential to
attract new users. Besides, Instagram had the potential to become one of the competitors to
Facebook in the future therefore it is a best strategy for buying instagram while avoiding the
uncertainty. Furthermore,Instagram was the new trend of social networks application with a fast
growth rate of 1 million users each day and according to the analysis,Instagram enjoys more than 1
billion users and surprisingly among them more than 500 million was using the feature of IG Stories
daily, it is a competitive advantage(Malik, 2019a).
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IPK COLLEGE
Stage 2: Opening Phase
In this step, is the beginning of defining the ground rules and procedures with the other party over
the negotiation itself that will do the negotiation. Also, the two parties come face to face. Each party
tries to make a first impression on another party and influence their thinking at the first opportunity.
.This phase is important because it involves both negotiating parties presenting their case to each
other.
However, opening consists of two phases which is the rapport building and probing. Firstly, the

rapport building is the process of knowing each other, two parties are going to sit together to
negotiate. Therefore, introductions , and names and backgrounds need to come out and make sure
each other are noted.
Probing means the two parties get to know the needs and expectations of one another because
the more they listen and survey, and they will appreciate the other party’s stand or position. For
example, Mark Zuckerberg (Facebook CEO) met the co-founders Kevin Systrom and Mike
Kriegerthe for negotiation regarding the acquisition of Instagram in 2012 but all the process just
under the discussion. Mark Zuckerberg told the reason for acquisition of Instagram to the owner
that he has the expectation is depend on the great revenue potential of Instagram with many
opportunities to get public attention.
Also, Facebook is likely hoping Instagram can grow into its fourth billion-user platform that can
beyond the expectations from Facebook itself, and Messenger while Facebook also hopes Instagram
can stand as the backbone for helping Facebook to grow in the future. In the aspect of
Instagram,they also have the interests to join and expand their business larger to become the sister
app to Facebook.
Stage 3: Bargaining Phase
In this stage, the negotiation process was to enter the actual give and take in trying to hash out an
agreement. During the bargaining phase is to come closer to the objective that intention. In order
words, the two parties will ask lots of questions or the binding condition will come out because they
are more interesting for the same aim, such as the product and service. It is the stage when the
negotiating teams really sit down and talk it out. Therefore, usually in this step the dispute and
argument will form because of the different position, mind set , and viewpoint.
Bargaining is about the process of discussion about give and take. Each party will be prepared to
recognize something and provide what will be gained for the desire while in this step, it needs to be
logical in one‘s approach and frame it clearly. For example, Mark. Zuckerberg, CEO of Facebook is
willing to spend $1 Billion to make a deal with Instagram, therefore he met the co-founders Kevin
Systrom and Mike Kriegerthe for negotiation regarding the acquisition of Instagram in April, 2012
while all these processes are called bargaining by the viewpoint and give and take by each other.
Mark Zuckerberg told the reason for acquisition of Instagram to the owner that he has the
expectation is depend on the great revenue potential of Instagram with many opportunities to get
public attention therefore, he offered Instagram in exchange with added significant function which
is the profiles of Instagram have been add-on the feature to show the contact information of
businesses,and even allow users to put the facebook personal account link for the job
requirement and this function also work in Instagram story.
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IPK COLLEGE
Moreover, Facebook company in order to persuasive instagram to join them even add-on another
feature to Insta-gram which including link-backs when someone posted a photo on Insta-gram,
which is allow the instagram user once they posted in instagram automatically can enjoy the cross
published function while published the post through Facebook News Feed, and allowing Insta-gram
to access a new user’s Facebook connections in order to recommend people to follow with the

‘people you may know’ function. In addition, the aspect of instagram was requested to build and
grow Instagram independently, and provide the service that does not share the Instagrams on
Facebook, while to have followers and follow people separately from the friends on
Facebook(Carman, 2019).
Stage 4: Closure Phase
This is the final step in the negotiation process, it is formalizing the agreement that has been
created and developing and procedures that are required for implementation and monitoring In order
words, the closing phase of a negotiation represents the opportunity to capitalize on all of the work
done in the earlier phases.
The settlement stage and work the closure which means the negotiating parties come to the stage of
settlement or agreement.The final terms as agreed transfer into document and the agreement gets
signed.It also involves the agreement that is represented in which both parties formalize the
agreement in a written contract. For example, Facebook wrapped up its $1 billion acquisition of
Instagram on 9 April, 2012 with the finalized agreement that Mark Zuckerberg CEO of Facebook is
willing to spend $1 Billion to make a deal with Instagram, he offered Instagram in exchange with
added significant function which is the profiles of Instagram have been add-on the feature to show
the contact of businesses,and even allow users to put the facebook personal account link for the job
requirement and this function also work in Instagram story.
Moreover, Facebook company also offer instagram to join them even add-on another feature to
Insta-gram which including link-backs when someone posted a photo on Insta-gram, which is allow
the instagram user once they posted in instagram automatically can enjoy the cross-published
function while published the post through Facebook News Feed, and allowing Insta-gram to access
a new user’s Facebook connections in order to recommend people to follow with the ‘people you
may know’ function.
In addition, Facebook company also accepted the request of Instagram which is to build and grow
Instagram independently, and provide the service that does not share the Instagrams on
Facebook, while to have followers and follow people separately from the friends on
Facebook(Putz, 2018).
*Student able to present a concise rationale for the negotiation process, including detailed steps
that organisations go through during a negotiation process
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IPK COLLEGE
D1 Critically evaluate the steps of the negotiation process and present valid solutions for
dealing with issues that can arise

Stage 1: Preparation
Preparations for the negotiations consist of collecting relevant information, obtaining the
required authority or permission and trying to understand the background / history of the
intention party, while having intense discussions and collecting details of the previous negotiations
on similar issues and even to sketch the question that need to be asked during the process of
negotiation. It is the most important step for a negotiator because aware and reduce the potential of
the conflict, as a well negotiation must have to plan everything in the initial in order to get ready for
facing and settle any issue on the spot confidently.
Stage 2: Opening Phase
In this step, is the turn of defining the ground rules and procedures with the other party over the
negotiation itself that will do the negotiation. Also, the two parties come face to face. Each party
tries to make a first impression to another party and influence their thinking at the first opportunity.
This phase is important because it involves both negotiating parties presenting their case to each
other. Usually the both parties that including in negotiation with try talk open in order to make each
clear about the standpoint, but they are also to make good impression with talk in a very peaceful
way, create friendship while put effort to create the harmony situation by the reason to make the
intention party willing to know more detail information while bring them enter bargaining phase.
Stage 3: Bargaining Phase
In this stage, the negotiation process was to enter the actual give and take in trying to hash out an
agreement. During the bargaining phase is to come closer to the objective that intention. In order
words, the two parties will be more interesting for the same aim, such as the product and service. It
is the stage when the negotiating teams really sit down and talk it out. Therefore, usually in this step
the dispute and argument will be formed.
For example, the solutions for dealing with issues that can arise which is the aspect of give and take
& power dynamic. For example, Mark Zuckerberg was a very good model as a negotiator, because
Instagram company had agreed to become a sister app to Facebook company with agreed all the
offer by Mark Zuckerberg, therefore he will to give and take and avoid public to seem his company
as bigger power that trying to bully the small company in 2012, he promised the request of
Instagram that build and grow Instagram independently, and provide the service that not share the
Instagrams on Facebook, while to have followers and follow people separately from the friends on
Facebook.
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IPK COLLEGE

Stage 4: Closure Phase
This is the final step in the negotiation process, it is formalizing the agreement that has been
created and developing and procedures that are required for implementation and monitoring In order
words, the closing phase of a negotiation represents the opportunity to capitalize on all of the work
done in the earlier phases.
The settlement stage and work the closure which means the negotiating parties come to the stage of
settlement or agreement. The final terms as agreed transfer into document and the agreement gets
signed. It also involves the agreement that is represented in which both parties formalize in a written
contract. All of these was every important because if after conducted all the steps of negotiation
without the agreement that prove by law, the intention party may possible to run away in half of
journey for finding another business partner,, while the intention party has the potential to reveal the
rules and regulations, offered item and the business secret of other parties.
The valid solutions for dealing with issues that can arise such as the communication breakdown
which is always happen when the two parties are come from different country to do negotiation,
which can overcome by understand before enter to negotiate such as to collect data about the
cultural different, or even find a translator or hire the consulter in order to avoid any
misunderstanding. In addition, if the misunderstanding was not about the communication like the
different direction and solution by both parties, therefore all parties should discuss directly to
each other and be prepared to explain problems.
*student lack of explaining negotiation process and present valid solutions for dealing with issues
that can arise in Facebook company.
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