Negotiation and Leadership: The LVMH-Tiffany & Co. Case Study

This presentation examines the crucial role of leadership in negotiation, using the LVMH and Tiffany & Co. acquisition as a case study. It defines leadership as a process of guiding a group toward goals and highlights how Bernard Arnault, the leader of LVMH, employed his negotiation skills to secure a favorable deal. The presentation details the negotiation process, including initial offers and counteroffers, emphasizing the importance of negotiation theories such as compromising, collaboration, accommodation and active listening. It analyzes Arnault's leadership style, identifying him as an authoritarian and transformational leader. The presentation also discusses the 7 C’s of communication model. The document concludes by emphasizing the importance of leadership skills such as communication, critical thinking, emotional intelligence, and value creation in successful negotiation, using the LVMH-Tiffany case to illustrate these points. It provides a self-reflection on the increased knowledge regarding leadership skills.

Leadership and Leading

INTRODUCTION.
 Leadership can be defined as a process and action that leaders do for leading a group of people on right
direction with the main aim of making them able to accomplish their goals.
 This presentation is going to discuss negotiation case of LVMH and Tiffany & Co in which the great
leader of LVMH company played a masterstroke and by using his leadership skills, he made negotiation
case in his favour.

Negotiation case by considering ethics
In the case of LVMH & Tiffany: Master negotiator and leader of LVMH, Mr Arnault played very interesting
play in negotiation process with Tiffany.
In this case, LVMH that is known as the world leading luxury group, announced to acquire globally known
luxury jewellery brand Tiffany & Co shared for $135 per share in cash and this announcement was done in
the year of 2019. This deal was much larger than US$13 billion as share value as per $135 was approximate
value of US$16.2 billion.

CONT...
 Mr. Arnault the best negotiator knew that this negotiation is going to be long and he used his skills of
negotiation and said that now he will buy each share at the price of US$130 and it binds Tiffany to
open their books.
 Both boards agreed that LVMH will purchase shares of Tiffany for US$135.
 Now, by comparing its actual value of US$140-160, it can be said that, LVMH made great negotiation
and made a deal of profit.

Role of leaders in negotiation
In regard to leaders, it can be said that they play a vital role in negotiation process. Their skills and
experience make companies able in winning negotiation and making profitable deal.
In regard to Bernard Arnault, it can be said that he is an authoritarian and transformational leader who
made beneficial to LVMH by making a deal of acquiring Tiffany at US$135 per share but its actual price
was US$140-160 as per the analysis and reports.
On the basis of this, it can be said that he shown his responsibility as a leader.

Cont...
In regard to communication, it is found that Bernard Arnault communicated information to
stakeholders in concise and clear manner that made everyone able in knowing what they need to do and
what is going on.
Overall, it can be said that leader is responsible in success of negotiation process. Leaders must
consider 7 C’s of communication model so that they can deliver message and important information to
stakeholders and involved parties in an effective and clear manner.

Role play of this study
VLMH: We are thinking to acquire globally known luxury jewellery brand Tiffany & Co.
Tiffany & Co.: What will be your acquisition price of our shares.
VLMH: We are thinking to acquire for US$135 with an equality value of around US$16.2 billion.
Sources: It would be a great acquisition for both LVMH and Tiffany as LVMH can become the market leader and
Tiffany can protect it against financial crisis.
LVMH: On the basis of evaluation, we thought to give you proposal of buying your shares for US$120 per share.
Tiffany & Co: I have discussed with my shareholders and they denied to accept this proposal as they think that this
price is too low.

Negotiation theories
There are 4 types by which people can negotiate with other parties and people such as: compromising,
collaborative, accommodation and avoiding.
An active listening is the main skill that both parties need to possess while involving in negotiation process
otherwise, negotiation may lead conflicts.
Negotiation theory believes that cooperative approach is one of the best ways by which people can understand
other parties and can discover new sources of value. As per this theory, people needs to focus on three main aspects
such as:
Focus on interests: As per this solution, leaders need to focus on interest on both parties as it can help them out in
identifying potential trade off as well as opportunities for joint gains.

Cont...
Value creation in negotiation: Value theories also play a vital role in negotiation process. People often see this negotiation
process as win loss or they think that one party will win and other will bear loss.
But it does not happen all the time both parties can reach to an agreement that can make beneficial to both parties to some
extent.
Value creation allow both parties to integrate more than 1 sources of value via trade-offs and other deal making strategies.
Some value creation strategies that have used in negotiation process of LVMH and Tiffany & Co include: asking lots of
questions to know about what actually matters and shar8ing information about interest as well as priorities.
Overall, it can be said that vision, values and persuasion are important in negotiation and all these can be considered by
making use of effective theories.

Self-reflection
On the basis of above case and secondary information, I can say that it increased my knowledge regarding leadership and
skills that required in making negotiation process successful.
Some common and important leadership skills that can make a leader successful include: communication, critical thinking,
emotional intelligence, planning, value creation, patience, reflection and adaptability.
These skills made Bernard Arnault successful and he did a great job in negotiation with Tiffany & Co for acquisition of its
goods.

CONCLUSION
It has been summarised from the above presentation that leadership plays a vital role in negotiation. They
possess number of skills and abilities that make them able in making negotiation related case in their
favour.
Further, it has shown effectiveness of Bernard Arnault who was great leader.
Transformational and authoritarian styles of leadership also play a vital role as it makes discipline and keep
everyone on track.
Compromising, collaborative, accommodation and competing are some common ways of negotiation. As
per the case and on the basis of critical analysis, leaders make decision regarding selecting effective ways
of negotiation.

REFERENCES
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Baoming, S., 2020. Research on the China's Motivation on Promoting the RCEP Negotiation.
Brunelli, M., 2021. The acquisition of Tiffany by Lvmh (Doctoral dissertation).