Job Offer and Used Car Negotiations - Assignment Example

Negotiations Used Car Negotiation 10/12 After some long thoughts I have decided to change my current car, which is a Volkswagen Jetta. However, this is not due to any problems associated with the Jetta but I feel that a change would be appropriate. Additionally, it is will be easier to sell it now while still in a good condition than later where its lifespan will have reduced significantly hence making it harder to sell. As a result, I have advertised the Jetta online and also in the newspaper and I am already getting some calls. Nevertheless, I am still faced with the task of deciding on which car to purchase. This requires an in-depth research on the various cars available that will suit my preference. Later….. After some critical research online I have narrowed down the possibilities and there is particularly one that has interested me the most. It is a Subaru and after some extensive research on Subarus in relation to performance and the general lifespan, it is seemingly the best option for me at the moment. Additionally, the dealer selling the car allows for a trade in and also payment in instalments with a significant down payment depending on the car. Therefore, there seems to be several available options for me from the dealer hence prompting the need to go and check it out and have a further discussion with the dealer regarding the Subaru. Later again….. After a relatively long talk with the dealer on the available deals regarding the Subaru and also other available cars in the yard, I have decided to buy the new Subaru I had earlier on spotted during my search. In the course of our talk, the dealer presented the current offers available ranging from cash to a trade in to paying in instalments after a down payment. Based on my current financial position the only offers suitable are either a trade in or paying in instalments. In both options I have to part with the Jetta, which is a decision I had already made. If I settle for a trade in the dealer has agreed to give me $8800 for the Jetta and paying in instalments requires me to first pay a down payment of $9400. With the down payment, I will get a loan with some manageable though steep monthly payments. However, with this option I have to settle for a buyer of the Jetta from among those who had been contacting me in order to give the down payment failure to which I will be forced to take the loan at prime with an increment of 5% interest. From among the earlier calls there is particularly one seemingly good prospect with whom I have agreed to meet for a discussion on the Jetta sale at 1300 hrs. That day afternoon….. What I expected in the situation On meeting with the potential buyer of the Jetta, we discussed several issues revolving around it and negotiated the price. My main expectations from the discussion were to get the buyer to settle for my target price of $5500. Since this was a one-time negotiation and did not require establishment of a relationship, I was more concerned about my target price. How I prepared for the negotiation To successfully engage in the negotiations I had to do some research on how to appropriately carry out negotiations. As such, I engaged on extensive research from a number of sources such as the text, Kelley Bluebook and dealers offer as starting points. From the text I learnt that I needed to have clear facts and vast knowledge of the Jetta so as to make a solid argument and consequently convince the buyer to settle for my price. This prompted me to log on to Edmonds.com to carry out research on various important aspects of the Jetta. Here I learnt that a Jetta’s life expectancy was over 300000 miles while mine was at 57000. As a result, this could be one of my strong argument points to show the buyer that my offer was the best. Additionally, I got some facts about fuel efficiency and the cost of repairing an exhaust as well as the cost for purchasing a new one. How the others and I in the group behaved However, before reaching an agreed price, De Leon, the buyer, wanted to know more about the Jetta such as the year of manufacture, mileage reading and the overall condition. In relation to condition of the Jetta there was particularly one minor problem with the exhaust but since it is repairable it did not hinder the negotiations. He seemed particularly keen on these specifics which implies that he had done some extensive research and that he was serious about the purchase. Nevertheless, he seemed rather pleased with the most of the key elements and the overall condition of the car hence he would probably be willing to give a good deal. For instance, he seemed pleased about the mileage which is at 57000 given that a Jetta’s life expectancy is at over 300000. I was rather settled throughout the negotiation process and did not want to make any mistakes so I was keen as well. This enabled me to stay in control of the negotiations. What I learned about my skills Mainly judging from the outcome of the negotiations I was quite pleased with my negotiation skills. I was able to hit my target price implying that my skills are relatively excellent. What I would do differently the next time around Generally I would have a repeat of the steps I followed during this particular negotiation any other time I am faced with a similar situation. However, next time I would offer an opening price that wholly covers any discounts I am seemingly offering such as the $250 for the exhaust. This is because I was short of $50 from my target price and making accurate additions would have avoided this. My analysis and outcome of the negotiations After about half an hour into the negotiations we were finally able to reach a consensus with the agreed price being $5450. From my part, I was extremely satisfied with the negotiations since my target price was $5500. Additionally, this meant that I could be able to pay the down payment for the Subaru without having to incur some extra costs from an increased loan interest. On beginning the negotiations, I stated my starting price as $5700, which is a value higher than my target price in order to give room for negotiations. A high of $200 is seemingly realistic since it does not go so far from the price neither is it too near the target the target price. As such, the chances of getting my target price were relatively high. On the other hand, the buyer’s opening price was $5200, which was $300 from my target price implying that I had to do some convincing to get him to my target price. Comparing both the buyer’s opening price and mine, there is difference of $250 from the settlement price hence the situation is seemingly at a balance. In such a scenario the negotiation can be considered a win-win for both of us. However, there is a deficit of $50 on my part between my target price and the settlement price. Nevertheless, I consider the overall negotiation a success since the deficit was as a discount for the repair of the exhaust which costs around $250 to buy a new one. This implies that I was able to include the greatest part of the expenses of the exhaust system repair in the selling price. Theories, concepts or principles and course discussions I arrived at my target price because I wanted to purchase a new car using the value of my trade in as the down payment and only having to borrow money towards the purchase of the new car only. My target price of $5500 was the dealer’s negotiation price implying that I had to hit this level. This is the bracket technique “Power Negotiating” and offering incentives such as full tank of gas and the valve efficiency would certainly give my negotiations an advantage. Techniques to be applied in a negotiation are further determined by the nature of the negotiation and the time period of the negotiation. For instance, when the negotiations are between parties that will constantly meet over and over, either for the same product or a different one, it is important to try and win the goodwill of the other party. Conversely, if the deal is one time only there is no need to concentrate on making a strong relationship hence the key focus should be on getting the best price. In my case this was a one-time deal hence there was no need to establish a relationship thereby my main attention was on getting the best price possible. Additionally, making an argument that I would exclude the exhaust cost from my price made it easier to convince the buyer. In fact, the deductions made to my opening price are exactly $250, which is the cost of the exhaust. Additionally, although I knew I was supposed to sell the Jetta that day, I did not reveal any deadlines to avoid showing desperation and consequently losing negotiation advantage. In such a negotiation it is best to give the first offer since it gives seemingly gives control of the negotiation. It is expected that the buyer will try to negotiate the price hence in order to keep the numbers close to the target price it is best to be the first to make the offer. This is what prompted me to make the first offer in order to ensure that the figures were within range of the target price. The first offer arguably determines the range of prices being negotiated hence in such a scenario where there is a target price it is best to make the first offer. Allowing the buyer to make the first offer, perhaps, would have gone far below my target price hence making it extremely hard to convince him to make increments until my target is acquired. Additionally, making the first offer allows one make considerations of the possible discounts you want to give. For example in my case I used replacement of the exhaust as my key discount point hence prompting the buyer to raise his price. Therefore, I is in order to conclude that making the first offer is the best way to go when negotiating. However, not all negotiations work out the best with making the first offer and therefore there is need to first examine the nature of the negotiation. For instance, I would not make the first offer in a situation where I do not have all the necessary information about the particular product in play. Some of the necessary information in this context is for example the actual price of the product. This would prevent me from making the first offer so as not to state a price that is already too high in case of a purchase and or too low in case of a sale. Job Offer Negotiation 25/ 08/ 2013 It is during the first weeks of the second year of MBA after the relatively long summer break that saw me enroll for an internship position at Robust Routers (RR). I have just received a letter with terms of a job offer at RR and I am particularly happy since my experience during the internship was quite memorable hence I would like to get a position at RR. However, after going through the letter I have noted some key issues of concern. The main issue I have noted is that RR is offering me a position as an associate product manager yet my main interests are becoming a product manager. However, since a response is not required immediately until at least March 1 2014, I have time to explore other options including job positions at other firms before I make up my mind on what to do next. Moreover, the letter has come at a seemingly favorable time since it is during the business school recruiting season hence I have a better opportunity of exploring other options that perhaps could give me better satisfaction. 20 / 02/ 2014 After a significantly long period of exploring all available opportunities in different firms, I have to make up my mind on which job offer to take since I only have a few days before the deadline of most responses. This is especially paying more attention to RR since they are expecting my response before March 1st. During the search period I managed to narrow down the options to only three firms. All the three firms are technology oriented but their terms of employment are different. Additionally, they are different levels in relation to the overall company performance. The firms I narrowed down to are RR, FourCom and another start-up Internet company. My decision will be based upon several factors such as salary and other employment related benefits but my main focus is the position being offered. In relation to the position, I am seeking a business development position, preferably from an established Internet backbone company. Additionally, I need an opportunity that will provide me with a mix of progressive responsibility, training, and security. Comparing my three current options, RR and FourCom are seemingly at a better position of giving me satisfaction in relation to my career goals and aspirations. However, I have a greater preference for RR since I am already familiar with their systems and they are at a better position in relation to performance but the main problem is that they are not offering my preferred position. Nevertheless, RR is better compared to FourCom judging from a performance platform since it leads the market in technology and sales. I have also been assured, though informally, that I can move to the business development department within a year or two especially with a good performance. Moreover, analysts say that RR’s excellent performance is expected to be even better in the coming years and it was recently named one of the top 50 U.S. companies to work for in a major business magazine survey. Conversely, FourCom is seemingly on an edge with market surveys showing that it has been losing market share to RR in the last two years. However, on a brighter note FourCom is offering me a product manager position in business development hence making me consider their offer. Additionally, they are offering a salary of $101000 and a signing bonus of $20000, which is relatively higher than RR is offering with a difference of $13000 and $5000 respectively. Additionally, FourCom’s options package and benefits are much better that those being offered by RR. Still on income issues, the start-up company is offering better offers than both RR and FourCom but the main problem is that their performance is a lot is relatively low hence constituting my reasons for eliminating them. With these evaluations, the odds seem to lie more in favor of RR but I will need to negotiate the terms before accepting the offer. As such I have resulted to contacting Bultema, my manager during the internship period, to discuss the terms of the employment and see if I can negotiate the terms a bit to give me more satisfaction. 23/ 02 / 2014 What I expected in the situation, how I prepared for the negotiation and theories, concepts or principles and course discussions The main agenda and points of negotiation on meeting with Bultema include negotiating the position being offered, salary increment, and improved benefits. In relation to the position RR offers better year-end bonuses and options as management levels go higher the ranks. For example, an associate manager’s salary is between $70000 and $100000 while a product manager’s salary is much higher. Considering RR’s policies on bonuses and options it is better to seek a higher position even if it means cutting off a few dollars from the salary. Therefore, at the moment my negotiation point is focused on taking this direction. In fact, I am willing to cut off $5000 from the $88000 offer at the table in return for a position of product manager. However, suppose negotiating a better position fails I can negotiate my salary to at least reach the higher levels of my salary range. With this the salary range will be closer to the salary levels being offered by FourCom. Moreover, I can try to negotiate to get a guaranteed year-end bonus, since it varies from 5-20% of the annual base salary. As at the moment these are my three main possible approaches to the negotiations. To facilitate my negotiations I am thinking of mentioning the other firms giving me offers to Bultema since maybe this might prompt her to agree to my terms. However, I am not certain what the outcome of this approach will be and I fear that it may harden other negotiations. Additionally, Bultema knows of my preference to be in business development hence I am considering giving her the benefit of doubt. In relation to bonuses I learnt in school that the current offer for MBAs is approximately $19500 but this rate is especially for banks and consulting firms. Conversely, technology firms offer relatively lower offers in relation to bonuses hence I would try to negotiate an increment more so considering that RR is located in a relatively expensive location, Silicon Valley. Furthermore I am considering an option of negotiation relocation terms, which are seemingly less compared to FourCom. As such I am thinking of negotiating to get a package covering all costs associated with relocation such as broke, moving, and storage costs while searching for residence. Although, am not likely to touch on stock options, they are at the back of my mind as a final result suppose other options fail. Having a backup plan is seemingly a wise decision while approaching negotiations since it reduces the chances of missing out on all desired offers. On a lighter note, I am also planning to negotiate a push of starting date since I have been planning to take a trip with fiancée after the graduation. However, I do not really think that this will be a problem more so because I had mentioned it to Bultema while ago. With a well laid out plan of the issues I seek to negotiate and a relatively appropriate technique I am positive that my negotiations will turn out as expected. I am relatively fond of Bultema hence I feel comfortable and confident to discuss my main concerns with her. How the others in the group and I behaved In the beginning of the conversation with Bultema, we started off from a less formal note, which I think increased my confidence and comfort towards the negotiation process. In the course of the discussion I did not approach the position issue from the perspective of changing it from the start but rather from the approach of possibilities of changing it at a later date. This seemingly went well with Bultema assuring me of a possible shift if I made an outstanding performance in the associate product manager position. Additionally, Bultema said that there was not much of a difference and that the associate product manager position was also a win for me. Although I did not exactly hit my primary goal, I got a fair deal with a promise of a future shift. On the issue of salary increment I tried to negotiate by stating my starting figure at 100k and also incorporated the other offers I was being offered in other firms. Bultema countered this by arguing that the 88k on the letter was quite fair as a start-up. What I learned about your skills Overall I consider the negotiation at RR satisfying more especially because I was able to get some changes in my offer and will be working at a firm that I am fully comfortable with. What you would do differently the next time around With this I learnt that my negotiation skills are relatively great since I was able to land myself a satisfactory deal hence I would have had it any other way. My analysis and outcome of the negotiations? At the end of the negotiation we agreed on 90k, which is somewhat fair considering it is a start-up and the range is between 70k and 100k. This is above the midpoint and considering that I will be working in my preferred firm, RR, it is a fair deal. I think incorporation of other offers by other firms played a role in increasing the salary hence I consider my approach quite successful. In relation to relocation, I was able to get some assistance with moving and was also awarded an extra week for settlement making a total of three weeks while other employees only get two weeks. I consider this an even greater win in my negotiations. Additionally, I was able to negotiate my starting date to July 15, which is an increment from the initial date July 1st. Although I did not negotiate on the 4501k and the health insurance I learnt that it is a suitable deal that gave me satisfaction. I also did not negotiate the signing bonus since I did not want to pay it back in case I left before the agreed date. In relation to stock issues I was satisfied given the fact that RR holds a great position in the market share. Read More