You will be supplied with an information brief describing the confidential negotiation positions and interests of two international organisations about to engage in negotiations. You have been engaged by both parties to the negotiation to prepare an independent detailed report advising them on a recommended approach to the negotiation. This should include a recommended negotiation strategy, negotiation best practices and an appraisal of the potential risks that may contribute to the conclusion of a suboptimal agreement or no agreement being reached. In preparing your report, you should consider all the relevant factors that may have a bearing on the negotiations. Whilst most of the report would apply to both organisations, you may wish to include separate confidential briefings for both parties on issues which are specific to them. In particular, you should make reference to relevant literature and concepts studied within the module.
Table of Contents
- Chemical Company International (CCI) Overview
- Confidential Instructions: Chemical Company International (CCI)
- Dragon Manufacturing (DM) Overview
- Confidential Instructions: Dragon Manufacturing (DM)
Objectives and Key Themes
The objective of this case study is to analyze a negotiation between Chemical Company International (CCI) and Dragon Manufacturing (DM) regarding an exclusive supply agreement for a key chemical compound. The report aims to advise both parties on a recommended negotiation strategy, best practices, and potential risks to achieving a mutually beneficial agreement.
- International Negotiation Strategies
- Exclusive Supply Agreements
- Cross-Cultural Negotiation
- Risk Management in International Business
- Supply Chain Management
Chapter Summaries
Chemical Company International (CCI) Overview: This section provides background information on CCI, a UK-based pharmaceutical company with significant global revenue. It highlights CCI's strengths in strategic industry understanding, engineering, and research, and its recent development of a potentially blockbuster new product line (TGB lenses) dependent on a specific chemical compound (VBY) supplied by Dragon Manufacturing (DM). The section also notes CCI's reputation as a strong negotiator and its key competitive advantage in supply chain management. The potential for increased revenue with the TGB lenses and the need to protect its investment through exclusive supplier agreements are emphasized.
Confidential Instructions: Chemical Company International (CCI): This section details CCI's internal mandate for the negotiation with DM. CCI seeks a 10-year supply contract, with a preference for 3-5 years of exclusivity. The desired minimum supply level is $30 million annually, with payment terms of 30-60 days. Concerns are raised regarding DM's quality guarantees for the VBY compound and its limited international experience, along with the need to manage cultural differences in the ongoing relationship.
Dragon Manufacturing (DM) Overview: This section introduces DM, a Chinese chemical compound manufacturer with primarily domestic clients. The potential contract with CCI represents a significant opportunity for revenue growth and expansion into international markets. The appointment of Chris Waters, an experienced expatriate, as lead negotiator reflects DM's strategy of leveraging his expertise in bridging Western and Chinese business practices. The section highlights DM's desire to establish a permanent presence in London to expand export markets.
Confidential Instructions: Dragon Manufacturing (DM): This section outlines DM's internal negotiation mandate, emphasizing the substantial opportunity presented by the CCI deal. The key objectives for DM include securing an 8-10 year supply contract with 3-5 years of exclusivity, a minimum contract value of $200 million over the first 5 years, and 60-day payment terms. The section also stresses the importance of establishing a cultural fit with CCI and successfully navigating the cultural differences between the two companies.
Keywords
International negotiation, exclusive supply agreements, cross-cultural negotiation, risk management, supply chain management, pharmaceutical industry, chemical manufacturing, contract negotiation, strategic partnerships, international business.
Chemical Company International (CCI) & Dragon Manufacturing (DM) Case Study: FAQ
What is the main topic of this case study?
This case study analyzes a negotiation between Chemical Company International (CCI), a UK-based pharmaceutical company, and Dragon Manufacturing (DM), a Chinese chemical compound manufacturer, regarding an exclusive supply agreement for a key chemical compound (VBY) crucial to CCI's new product line.
What are the objectives of the case study?
The case study aims to analyze the negotiation process, advise both parties on optimal negotiation strategies and best practices, and identify potential risks to achieving a mutually beneficial agreement. It explores international negotiation strategies, exclusive supply agreements, cross-cultural negotiation, risk management in international business, and supply chain management.
What are the key themes explored in the case study?
Key themes include international negotiation strategies, the intricacies of exclusive supply agreements, navigating cross-cultural differences in business negotiations, managing risks in international business dealings, and effective supply chain management. The case also highlights the importance of understanding each company's internal objectives and mandates.
What is Chemical Company International (CCI)?
CCI is a UK-based pharmaceutical company with substantial global revenue. They possess strong expertise in strategic industry understanding, engineering, and research. Their new product line (TGB lenses) is heavily reliant on the VBY compound supplied by DM. CCI is known for its strong negotiating skills and efficient supply chain management.
What are CCI's negotiation objectives?
CCI seeks a 10-year supply contract with a preference for 3-5 years of exclusivity. They aim for a minimum annual supply of $30 million, with payment terms of 30-60 days. CCI is concerned about DM's quality guarantees and limited international experience, and needs to manage cultural differences.
What is Dragon Manufacturing (DM)?
DM is a Chinese chemical compound manufacturer with primarily domestic clients. The CCI contract represents a major opportunity for revenue growth and international expansion. They've appointed an experienced expatriate, Chris Waters, to lead the negotiations, aiming to bridge Western and Chinese business practices. DM wants to establish a London presence to expand exports.
What are DM's negotiation objectives?
DM aims for an 8-10 year supply contract with 3-5 years of exclusivity, a minimum contract value of $200 million over the first 5 years, and 60-day payment terms. They emphasize establishing a cultural fit with CCI and successfully managing cross-cultural differences.
What are the key chapters in the case study?
The case study includes sections on CCI overview, CCI's confidential instructions, DM overview, and DM's confidential instructions. Each section provides crucial background information and outlines the specific goals of each company in the negotiation.
What are the key words associated with this case study?
Key words include international negotiation, exclusive supply agreements, cross-cultural negotiation, risk management, supply chain management, pharmaceutical industry, chemical manufacturing, contract negotiation, strategic partnerships, and international business.
- Citar trabajo
- Jochen Kasper (Autor), 2014, Negotiation Management. A Case Study on Strategy Selection, Múnich, GRIN Verlag, https://www.grin.com/document/293243
