Considering the peculiarities of the current order and contract, there are two key negotiation fundamentals that should be employed during the meeting with subcontractors.
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First, despite all problems and hardships that might occur, the contract term should not be changed. It is one of the first fundamentals that should be taken into account. The fact is that the company has already established the terms of the agreement which state that there is a certain period of time needed to accomplish the task and provide CSD to the government. In such a way, the firm has a certain responsibilities and binds itself to them. Alterations in terms will corrupt the companys image and result in the deterioration of relations between the partners. It is unacceptable as a multi-year contract presupposes long-term cooperation between these two agents and the level of trust should remain high for the partnership to be successful. That is why the first fundamental is the impossibility of the final contract terms change and prolongation of time needed to accomplish the task. It is crucial to demonstrate the high level of reliability since the first stages of the cooperation.
The second fundamental is the cost of the subcontractors quote. The fact is that in accordance with the terms of the agreement, the partner should be provided with the 25% of the whole income. However, new conditions that have been discovered recently introduce additional demands that come from the necessity to improve the technology and eliminate the obsolescence. For this reason, it is crucial to estimate the new quote and assure that the partners motifs are fare. Moreover, additional payment could be received only in case the first fundamental is taken into account. In such a way, the Subcontractor could be provided with 30% of income but only if it guarantees that the terms of the agreement will not be changed. In such a way, there will be no need in additional six months and the partners will be able to start cooperation and accomplish their main task. This fundamental is crucial as it states that the increased quote will serve as the warranty of CSDs timely delivery and preservation of the companys image.
At the same time, there are also several activities that should be performed to guarantee the success of the negotiation with the Subcontractor.
First of all, it is crucial to look for an appropriate alternative that is currently presented in the market. The fact is that rivalry is one of the best stimulators which means that the Subcontractor could be afraid of losing the advantageous position in case a new potential partner has been found. At the moment, asking a new quote and insisting on additional six months, the Subcontractor is sure that there is no other variant but to agree with the new terms. However, the firm should investigate the market and look for some other companies that could accomplish the same task. It is essential to create the list of potential partners and outline their advantages and disadvantages. If the Subcontractor refuses to accept the firms proposal and insists on its own conditions, the firm should provide the information about other agents that are ready to participate and make a deal. Under these conditions, the subcontractor will have to come to terms if it wants to preserve the current position and remain in business relationships with the main firm.
The second crucial subprocess is data collection. It is extremely important to be informed about the current state of issues that are going to be discussed. For this reason, the firm should comprehensively investigate the functioning of its Subcontractor to assure that the discovered obsolescence is not a fiction created to increase the quote and make the firm accept the new terms of the agreement. The investigation of the process of production will provide the credible information about the current state of affairs and the Subcontractors ability to meet the requirements of the new contract. Additionally, it will also help to determine whether the existing term is enough or it should be extended. Possessing the given information, the firm will be able to hold more advantageous position and dictate its terms to the Subcontractor. In case it disagrees to accept a certain suggestion, the main company will demonstrate the collected data and its competence in the sphere. In such a way, this ground work will help to attain the positive result of negotiations and guarantee the advantageous position to the firm.
Altogether, the given case demonstrates the unique significance of business negotiations which provide partners with the opportunity to discuss the terms of their cooperation and look for a solution that will be able to satisfy all parties. At the same time, it is crucial to prepare for these negotiations as the advantageous position will provide a partner with the ability to dictate its terms. For this reason, business partners should be ready to engage in the negotiation process to maintain their positions.