Introduction
There is no doubt that a merger remains one of the most difficult operations in the field of business as the creation of one larger company is always related to financial risks and problems that stem from the new division of duties. Nevertheless, considering a wide range of advantages and opportunities for further financial growth, our company (Eurocopter) has decided to enter merger discussions with Enstrom Helicopter Corporation. The given paper presents a discussion of a negotiation strategy that is expected to help our company to improve its financial position and become a stronger business rival for many enterprises in the industry.
The Internal and External Plans
About the plans or our company related to the expected merger, the transaction is supposed to improve our social image due to the presence of products ranked among the safest. Enstrom Helicopter Corporation was chosen as our potential partner for a merger due to numerous reasons. The company belongs to the number of the most famous helicopter designers and manufacturers in the world. The discussed company is headquartered in the United States, and it has a good reputation which acts as an additional advantage for Eurocopter. Another factor that has encouraged us to enter merger discussions with the given company is the range of products that they sell. It designs and manufactures helicopters that can be used for different purposes such as the transportation of goods and specialists to difficult access areas and the provision of emergency medical services. According to the National Transportation Safety Board, air vehicles produced by the company can be listed among the safest in the world due to a small number of fatal accidents (“Safety,” n.d.). The merger with the discussed company will be beneficial for Eurocopter because Enstrom Helicopter Corporation pays focused attention to the quality of its products and flight safety.
The Negotiation Strategy
Considering a great number of problems that can prevent our company from conducting a successful business merger, the right negotiation strategy is to be chosen. As is clear from the nature of the transaction, it is necessary to develop an integrative negotiation strategy that involves working towards mutual goals. Among the internal plans that are shared by our companies, there is a necessity to use new production technologies and improve sales. Despite a great number of foreign clients with whom we collaborate effectively, Eurocopter has to improve its position in an Asian market. Having a Chinese owner, the discussed company acts as a perfect business partner for us.
The negotiation strategy chosen by our company is based on the superiority of mutual benefits for both stakeholders because both parties are interested in presenting their strong points and combining them to improve financial outcomes. To conduct negotiations related to the merger effectively, both companies are required to be sincere and disclose any information that can be relevant in the discussed case. Considering a great number of personal goals that can interfere with the process of negotiation and decrease the effectiveness of the planned transaction, it will be pivotal to establish a committee whose members will be responsible for the analysis and the synthesis of relevant financial data. The establishment of the committee can be regarded as an effective measure because it helps to minimize the impact of personal opinions and avoid the use of subjective statements during the decision-making process. The creation of the discussed committee is supposed to be the first step in helping our companies to prepare for the negotiation process. Both companies need to gain access to new markets; therefore, both partners have to be ready to disclose the most recent financial information.
The Committee
The committee responsible for negotiations needs to include a few representatives of each company; these representatives should have access to any information about production processes, sales, and collaboration. Also, the chosen representatives should not be employees of any company in the industry to avoid the presence of personal interests. The members of the committee should be assigned to different tasks. Thus, some of them will have to analyze the financial data reported by the companies to negotiate prices. Other professionals that will be hired as agents will have to analyze the business strategies of both companies to consider the stakeholders’ strengths and weaknesses and propose changes if necessary. Apart from that, it needs to be said that some members of the committee that will be established will have to review the properties of air vehicles produced and compare production technologies used by the stakeholders. Having analyzed this aspect of companies’ activity, the representatives will be able to design a new product development strategy based on strong and weak points related to the exploitation of air vehicles produced by the stakeholders.
The process of price negotiation needs to include a few important steps. During the preparatory stage, the representatives of both companies should work individually to prepare the analysis of companies’ financial results (the important historical changes and factors causing them should also be considered). Then, the conclusions must be discussed with the CEOs of the companies. Product prices and production costs are to be reviewed together with the plans of the companies. Synthesizing the results of their work, representatives are expected to plan the costs of the transaction to provide the strategy that will be beneficial for both sides. In case of disagreement, the terms may need to be reviewed.
Reference
Safety. (n.d.). Web.