ORGA 314: Applying Negotiation Strategies in Used Car Purchase

This report details a used car negotiation scenario, applying strategies learned in ORGA 314. The buyer aimed to purchase a specific Subaru model within a set budget, employing tactics like appearing powerful and creating value for the dealership. Tensions arose due to price discrepancies and potential disputes, managed through open communication and compromise. Effective techniques included BATNA analysis, understanding resistance points, and strategic timing. The report recommends mastering negotiation techniques, anticipating disappointments, and leveraging the power of silence. Desklib provides access to similar solved assignments and past papers for students.

Running head: MANAGING NEGOTIATIONS 1
Managing Negotiation
Name
Instructors name

MANAGING NEGOTIATIONS 2
Introduction
When negotiating to buy a car, one can enter a dealership to negotiate with the salesperson or put
a request for bids in the website. When the buyer knows what they want is a key factor in the
decision-making process.
Car negotiated
The] buyer wanted a race car, which she has always wanted, she was also looking for the latest
model, which was purchased but shortly returned to the dealers or used for less than a year. The
other factor was that the buyer wanted a race car, preferably a Subaru brand, a used car but a
2017-2018 make. When the price is the main factor to be considered in the negotiation process,
then face to face negotiations with adequate preparations can make the process simpler.
Why the interest in the vehicle?
The buyer wanted a race car, and she knew about Edmonton’s existing Subaru BRZ, 2018. The
buyers budget was around $250,000, which is the cost of the Subaru BRZ. The buyer wanted a
car which was an alternative for the traditional SUV which was mid-sized. The Subaru can also
do most of the things an SUV can do, and more. When it comes to the functionality, it has an
automatic transmission with DOHC engine. It has a system with smartphone integration, built-in
touchscreen, and informant information system. The car has a power liftgate, sunroof, and
activated dual zone to condition the air in the car when it is too sunny. The car has a blind spot
detection as well, rear camera and heated seats.

MANAGING NEGOTIATIONS 3
The strategy used in the negotiations
One strategy used by the buyer was bringing out the big gun- acting like they have power- this
strategy sometimes works because those considered as heavy hitters are left to negotiate the
contract and most of the time they win. When the buyer was not able to strike a deal with the
sales, she avoided a quick fixing and ask them to reconsider their decision she will come back
the following day to hear their decision. The short break was a strategy to allow for review and
reconsideration form the salesperson. The other strategy was creating value in the business where
she said she would also come to buy another car for her daughter’s sixteenth birthday in the next
few months. This helped in building trust, and the dealers could not forego a chance of doing
business with the buyer again (Ross, 2010).
Negotiation tensions and how they were managed
The negotiation tensions between the buyers and the dealers were the sale-persons offered lower
prices to lure the buyer then when the buyer came on-site, they changed the price. The other
tension was the rise of potential disputes which are often inevitable. Also, in a business deal
where the stakes are too high, the consequences can be severe; hence there was tension for both
parties that a wrong decision is not made.
The tensions were managed by creating an open management system of information, where the
parties could build trust and understand each other. The tensions were also managed through
conversations where the parties discussed the burning issues and bending to accommodate each
other.
Effective negotiation techniques and effectiveness

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The BATNA technique used here was that the sales-person had to forego their profits. The buyer
offered $25000 for a second hand Rally Subaru, 2017 and therefore, the manager could choose to
pay them out of their pockets. This made the dealers forego their commission to make a huge
sale. The buyer petered a price where, if they would not accept, she had reached the resistant
point, where only walking away was the other option. The sales side, on the other hand, had a
BATNA, that if the minimum amount required were not offered, they would walk away. They
negotiated a price, and they agreed that the difference of $5000 that the dealers were asking
would be settled in reasonable installments.
Closing the negotiations- While closing the negotiations, the buyer promised to bring more
business to the car dealership. This made them quick also to close the deal with her as they gave
her what she had wanted. It is always important that one enters the negotiation process without
feeling intimidated and it is a win-win for everyone.
The other negotiation technique used in the scenario was that the buyer did not listen to the
problems of the other side, ads to why she could not be given the car at a price she thought was
reasonable for both parties. She cared to listen to them, but she did not absorb what they were
saying and still went ahead to negotiate for what she wanted countering the reasons given by the
other party. The biggest technique was that the negotiator, in this case, paid attention to the other
parties’ concerns, which helped in establishing what the other side was thinking. Afterward, she
paid a lot of attention to timing; she knew when to press and when to wait and give the other side
time to reconsider their position. She was wary of not pushing too hard, thus not compromising
anyone’s position (Siedel, 2014).
Recommendations

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One should master their negotiation techniques so that they can use the techniques to their
advantages. Anticipating disappointments is also a technique which makes one not to
compromise while declining at the right time. When in doubt, one can always put up an offer
which is fairly good, and negotiate the end of the agreement by suggesting arbitration in case of
any misunderstandings. This can mostly be helpful when one is in doubt about one of the party’s
good-faith. The power of silence also remains unbeaten in negotiations. One should draw the
power of silence by asking questions, waiting for the other party to speak and make counter-
offers and ask questions before they make their offer. Sometimes, one can put the other party off-
balance by asking questions, which can give an insight as to how that party might want the
business to be carried out (Schultz & Doerr, 2014).

MANAGING NEGOTIATIONS 6
References
Ross, G. H. (2010). Trump-style negotiation: Powerful strategies and tactics for mastering every
deal. John Wiley & Sons.
Schultz, M., & Doerr, J. E. (2014). Insight selling: surprising research on what sales winners do
differently. John Wiley & Sons.
Siedel, G. J. (2014). Negotiating for Success: Essential Strategies and Skills. Van Rye
Publishing,
LLC.