Sales Management, Digital and the Bank - Assignment Example

Running head: SALES MANAGEMENT Sales Management - Digital and the Bank - Student’s Name Student Number Course Name and Number Name of Professor Date of Submission Number of Words: 2,509 Introduction A good negotiation is not only focused on trying to win more than the party being negotiated with but to enter into a business agreement wherein both the negotiator and the person being negotiated with feels satisfied with the agreement (Reck & Long, p. 13). Given that the negotiator and the person being dealt with are both satisfied with the common grounds they have agreed with, there is a strong possibility for both parties to be able to establish a stronger and long-term business relationship as compared with a situation wherein the negotiation was done on a one-sided basis. Digital is the authorized supplier of hardware and software computer system of the Bank. Although the Bank’s IT system is still efficient in terms of satisfying the needs of the banking operations, the Bank is considering replacing the IT system soon. Given that Digital has recently developed a new IT system that is specially designed to support the specific needs of the banks, Digital is being challenged to convince the Bank to prolong their business relationship by continuously patronizing Digital’s IT system technology. In response to the Bank’s dilemma about the need to change its IT system soon, the initial meeting with the bank concerning Digital’s newly developed IT system will be tackled in details. As part of going through the pre-negotiation process, Digital will introduced its newly developed IT system to the stakeholders of the Bank followed by making a comparison between the product features and selling price offered by Digital and its competitors. To encourage the Bank to maintain its long-term business relationship with Digital, Digital management team will exert extra effort in terms of making their offer more feasible as compared to its competitors. Aims for the Meeting To be able to convince the Bank to maintain its long-term business relationship with Digital by introducing Digital’s newly developed IT system together with the comparison between the advantages and disadvantages of investing the Bank’s new IT system from Digital and its competitors. Opening Stance Good morning everyone. We are glad that the members of the Bank’s stakeholders were able to participate in today’s pre-negotiation meeting. On behalf of Digital, we are here to present to you the special features of our newly developed IT system. Eventually, we are going to provide you a comparison between the advantages and disadvantages of investing on Digital’s newly developed IT system and other related IT products offered by Digital’s competitors. After going through our product presentation, we are confident to conclude that investing on Digital’s newly developed IT system has a lot of benefits to offer the Bank in terms of improving the Bank’s long-term IT system requirements. Pre-Negotiation Planning Process Listen to the Bank’s Reason for their Decision to Replace Its Existing IT System During the early stage of the pre-negotiation process, it is advantageous on the part of Digital to listen to the reasons why the Bank has decided to replace its existing IT system. Basically, hearing out the main concern of the Bank will enable the team members of Digital know what they should offer to the Bank in terms of improving the quality and efficiency of its existing IT system. Gathering this information directly from the stakeholders of the Bank will increase Digital’s ability and potential of being able to deliver IT technology as preferred by the Bank. Introduction of Digital’s Newly Developed IT System Aiming to retain the Bank’s business by ensuring that the company purchase its new IT system from Digital, the top management team behind Digital will first introduce the development of its new IT system. Before the start of the product introductory phase, the top management team of Digital will not only invite the decision-makers of the Bank but also the IT experts who are currently working with the Bank. The rationale for inviting the decision-makers of the Bank and the IT experts who are currently working with the Bank is to enable Digital management team to have a better chance of convincing the Bank to retain its business with the company. In line with this, the presence of decision-makers is necessary since these are the group of people has the authoritative power to decide on which IT company they will purchase their next set of IT system. On the other hand, the presence of the Bank’s IT experts is equally important since these are the group of people who are already familiar with Digital’s previous IT System and its flaws. By convincing these people about the improvements in Digital’s newly developed IT system, there is a better chance for the Bank to reconsider their business relationship with Digital. During the introduction of Digital’s newly developed IT system, the person who is in-charge of conducting the product introduction should focus on discussing the special features of its newly developed IT system. Aside from discussing how the newly developed IT system differs from Digital’s previous IT system, the IT experts who are currently working with the Bank will have a better idea on how the newly developed IT system could increase the efficiency of the Bank’s daily operational transaction. Other than discussing the special features of the new IT system, the management team of Digital will also present how the Bank will be able to enjoy enormous benefits by purchasing Digital’s newly developed product. As a result of discussing how the Bank’s could benefit from Digital’s newly developed IT system twenty to twenty-five years from now, there is a higher chance that the Bank would reconsider the qualifications of Digital in terms of maintaining its relationship with the company as its main IT supplier. Discussing the Advantages and Disadvantages of Purchasing Digital’s New IT System as Compared to its Previous and Its Competitors’ IT System After discussing the product introduction, Digital should focus on discussing the advantages and disadvantages of Digital’s new IT system as compared to its previous IT system and the IT system offered by its competitors. The main purpose of comparing Digital’s newly developed IT system as compared to its competitors is to enable the Bank’s decision makers and its IT experts to have a better understanding on how they can benefit from investing on Digital’s newly developed IT system. Since Digital has been the only IT supplier of the Bank, Digital has the competitive advantage of knowing exactly the specific IT technology the Bank needed in order to improve its operational system. As part of the product comparison report, Digital management team will discuss not only the product features and its long-term benefit in terms of increasing the Bank’s operational efficiency but also the price. Digital is planning to sell the newly developed IT system at the price of $4.5 million for a fully installed system. Even though the market price of purchasing Digital’s newly developed IT system is a little higher as compared to the market price of IT system offered by other IT companies, the fact that the team members of Digital knows exactly what the Bank needs in its IT system should be enough to convince the Bank to retain its business relationship with Digital. On top of knowing the specific IT needs of the Bank, Digital is offering new IT technology which could last for more than 20 to 25 years from now. Given that Digital’s newly developed IT system is readily available two to three months from now, the company will be able to deliver the product within the shortest possible time. Since the newly developed IT system is still in the final stage of completion, Digital could offer the Bank the benefits of personalizing the newly IT system based on the specific needs and requirements of the Bank. (See Table I – Comparison between Purchasing a New IT System from Digital and Its Competitors on page 7) Table I – Comparison between Purchasing a New IT System from Digital and Its Competitors Digital Competitors Advantages Familiar with the specific IT requirements of the Bank. Digital’s software is powerful enough to support the IT requirements of the Bank. Offers special features needed by the Bank for the next 20 to 25 years from now. Product is readily available 2 to 3 months from now. Has the option to offer the Bank to personalize the IT system based on the needs and requirements of the Bank. Proven quality service. Selling price is lower than Digital’s newly developed IT system. Disadvantages Selling price is $4.5 million (relatively high compared to its competitors). Digital’s powerful software is applicable only to Digital’s hardware. Less familiar with the IT requirements of the Bank. IT system of competitors is based on ‘old’ technology. Quality service is not proven. Anticipated Questions / Objections and Digital’s Plan for Countering Considering the fact that Digital is planning to sell its newly developed IT system at the price of $4.5 million, I expect the Bank to enter into a negotiating process with Digital in terms of lowering down the selling price of the newly innovated IT system. In line with this, it is possible for Digital to offer the Bank three options including: (1) a new system at 5 million pound or get the system at annual premium of one million pound for a period of seven years; (2) improve the current system at 2 million pound; or (3) purchase another IT system that was introduced in the market two years ago. Expected Outcome of the Meeting Given that Digital is the only IT company that could offer the Bank a newly innovated technology that will meet the bank’s current and long-term IT requirements, Digital expects the bank to accept Digital’s discount and free IT service offer. Basically, one reason why the Bank is planning to change its existing IT system it to ensure that the company’s IT system will remain updated. Given that the Bank will decide to invest on the IT system offered by Digital’s competitors, it is likely that the Bank would violate its objective of upgrading its IT system. Critical Analysis of the Actual Negotiation As a result of discussing the advantages and disadvantages of Digital’s new IT system as compared to its previous IT system and the IT system offered by its competitors with the Bank, the actual negotiation process which is to convince the Bank to invest on Digital’s newly developed IT system is convincing enough to make the stakeholders of the Bank end up patronizing Digital’s new product. Although the initial meeting raised a lot of tension on the part of Digital and the Bank, the ability of Digital’s team members to smoothly communicate the product features and its advantages to the stakeholders of the Bank eases the tension at the middle of the actual negotiation process. Since the stakeholders of the Bank is already aware that only Digital could offer them newly innovated IT system that could work well based on the specific needs and requirements of the Bank, the pre-meeting between the Bank and Digital was successful in terms of convincing the Bank to consider investing on Digital’s newly developed IT system. One of the reasons why Digital was able to successfully convince the Bank to invest on Digital’s newly developed IT system is because of the fact that only Digital could offer new IT technology that can last for 20 to 25 years from now. Other reasons for choosing Digital includes the familiarity between the two business groups. Since the Bank already knows the quality and service efficiency being offered by Digital, the company was able to easily convince the Bank to consider investing on their newly innovated IT product provided that the offer of Digital is attractive on the part of the Bank. In terms of the preparation technique, Digital should have delivered a better presentation quality. With the use of PowerPoint software, Digital is more likely to deliver a better quality presentation as compared to what took place during the actual pre-negotiation meeting. For example: The group could have make use of financial computation to support the Bank’s financial benefit before they accepted Digital’s offer. In terms of negotiation technique, Digital should have given the Bank more time to express their concerns with Digital. By quietly listening to the main concerns of the Bank, the team members of Digital could have the edge of winning the respect the Bank’s stakeholders. Although Digital team members were able to close the negotiation deal with the Bank properly, it will be better if Digital will close the negotiation deal with a confirmation such as the use of a follow-up letter or e-mail (Sloan Brothers with Daniel Kehrer, 2010). Future Activities and Its Likely Outcomes As part of the future negotiating activities, the team members of Digital expect the Bank to decide which among the three options Digital has offered them will be more beneficial on the part of the Bank. Based on the final decision of the Bank, the Bank can anytime close the deal with Digital or further negotiate the selling price offered by Digital. Conclusion The three stages of negotiation model includes: the process wherein Digital will get to know more about the Bank, Digital will make some attempts to establish a range of settlement with the Bank, and eventually come up with a final decision between Digital and the Bank (Rojot, 1991, p. 175). Before making any attempt to establish a wide-range of settlement with the Bank, it is crucial on the part of Digital to determine their competitive advantage as compared to its competitors since knowing this information will increase the bargaining power of Digital when it comes to offering and closing the deal with the Bank. Listening to the main concerns of the Bank is an important factor behind the success of Digital’s negotiation plan. By knowing the reasons behind the Bank’s desire to change its existing IT system, the team members of Digital would know how to attract and convince the stakeholders of the Bank to invest on Digital’s newly developed IT system. Since the Bank is the only company that could offer the Bank with newly innovated IT technology, Digital should not sacrifice its potential earnings by offering the Bank with big discount. The powerful software of Digital is applicable only to Digital made hardware. Considering that one of the major concerns of the Bank is the selling price of Digital’s newly developed IT system, Digital provided three options for the Bank to consider. First, the Bank has the option to choose a new system at 5 million pound or get the system at annual premium of one million pound for a period of seven years. Another option is to improve the current system at 2 million pound. The last option is to purchase another IT system that was introduced in the market two years ago. The Bank needed more time to evaluate the advantages and disadvantages of Digital’s three option plan. For this reason, Digital and the Bank agreed to set another schedule for re-negotiation process next week. *** End *** References Reck, R., & Long, B. (1989). The Win-Win Negotiator: How to Negotiate Favorable Agreements that Last. New York: Pocket Books. Rojot, J. (1991). Negotiation: from theory to practice. Houndmills, Hants: Macmillan. Sloan Brothers with Daniel Kehrer. (2010). 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