21st CENTURY NEGOTIATIONS
The course focuses on 15 key objectives, including the use of tools such as SWOT and Porter’s Five Forces Model, establishing the theme (objective), understanding 22 skill sets, utilizing tactics and preparing a Negotiation Plan with fundamental exercises and case studies.
Negotiation is defined as “conferring, discussing or bargaining to reach agreement or the process of working out a mutually satisfactory agreement.” This outcome is also referred to as a “win-win (cooperative)” result. Another outcome of the Negotiation can be a “win-lose (competitive)” result. This is where one party benefits at the expense of the other. This is referred to as the Lopez Approach advocated by Ignacio Lopez in the early 1990s. If his name does not “ring a bell’’ with you – he was a senior executive with General Motors and during this time, he ran their multi-billion dollar purchasing operations.
One of his first actions was to have his hundreds of buyers slash pricing with their thousands of suppliers. This resulted in short-term savings for GM but in the long term – the strained customer-supplier relationships hurt GM as they could not depend on their key suppliers for valuable development inputs. A third outcome can be a “lose-lose (controversial)” result. This is where an impasse or stalemate results and the buyer does not get the product or service their firm requires nor does the supplier make the sale with the resulting revenue. This can be especially detrimental if the supplier is a sole source (the only one available).
Negotiation is the one of the most popular topics covered in not only Supply Management venues but also in sales training. There are numerous trainers running around the country with seminars on how to outsmart your supplier, how to advance some sneaky tactics, or as one so-called expert on Negotiation used to advocate, “HAVE YOU KICKED YOUR SUPPLIER TODAY?”
How does this course differ from the above? In the founder of SCE’s 30 years of experience in purchasing and negotiating with a world-wide supply base, he has found that the old saying holds true, “what goes around, comes around.”
In other words, you, the customer may win the Negotiation session, but in the long run, if the supplier feels that they have been KICKED, they will get it back from you, either with future price increases or through short-cuts in quality, delivery or customer service. This course advocates that in the 21st century, a balance between maximizing return for your firm as well as allowing a good deal for your supplier. The course is dividing into two main parts – preparing for the Negotiation (which involves a detailed plan) and executing the Negotiation.
To support all of the above, this course will be featured in SCE’s virtual classroom with all of the functionality featured in our DEMO and based on our teams working with major corporations in BIC-Best-In-Class practices. It will be a blend of educational topics, pertinent case studies, and practical stories based on past practices. You will learn vital skill sets but also have fun!
Upon completion of the 21st Century Negotiations course, the participant will:
- conduct a SWOT analysis which focuses on both the buyer’s and seller’s strengths, weaknesses, opportunities and threats
- incorporate Dr. Michael Porter’s Five Forces Model to determine whether it is a buyer’s or seller’s market
- understand the importance of good negotiation preparation and key preparation factors
- analyze the supplier’s position including desire for and certainty of a contract, available options, skill levels and cost modeling (for more on this, see the Applications in Cost Modeling course)
- incorporate the BATNA – Best Alternative To A Negotiated Agreement
- determine which objective(s) to set which makes up the theme of the negotiation
- review 22 skill sets of good negotiators
- compare and contrast the three outcomes of negotiation as referenced above
- incorporate the key tactic called the Caucus (time-out)
- incorporate the key tactic called Challenging The Deadline (such as an immediate price increase)
- incorporate the key tactic called Missing Person (appealing to a higher authority)
- incorporate the key tactic called BAFO – Best and Final Offer (take-it-or-leave-it)
- incorporate the key tactic called the Bogey (an appeal to the emotion of the other party)
- review two special negotiation situations – (1) with HUBS – Historically Underutilized Businesses and (2) Consortiums (different buying companies joining to leverage)
- create a detailed negotiation plan with a focus in the Introductory Summary, Particulars, Procurement Situation and Negotiation Summary
Depending on the learning style of the participant, this course is designed to be approximately 15 hours in the e-Learning – virtual classroom. Additionally, at the end of the course – you will take an on-line quiz to make sure you have grasped the key points.
Upon completion of the 21st Century Negotiations course, the participant will receive a certificate of completion with 15 ceus of credit.
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