Thematic-Based Group Negotiation - Dr Jones-Alpha Pharmaceuticals and Dr Ronald-Beta Pharmaceuticals - Case Study Example

NEGOTIATION REPORT BETWEEN: AXIS CARDOZA (EXPORT AGENCY) AND BUYERS (Dr Jones-Alpha pharmaceuticals and Dr Ronald-Beta pharmaceuticals) Following a critical review of the state of affairs between Tinabul (South America) and Australia and the economic situation within the rivalry of pharmaceutical companies, the management adopted an opinion that there was raising concern to revaluate the economic relation and exclusive standpoints to necessitate fair advantage and super economic endowments. The urgency need of Ugli oranges and cost benefit considerations stipulated long-term pursuit of negotiations. Driven by opportunity cost analysis and economies of scale in obtaining serum concoction, the following negotiation report is adapted and brought forward between Dr Jones (buyer A) and Mr. Axis Cordoza and consequently between Dr Ronald and the same exporter. This follows a realizable marketing channel system which aims at obtaining pareto technical and allocative efficiencies of supply of Ugli oranges. Relying on adoptable channel system with less costly litigation and that which can remove reluctance from the seller (export agency) upon proper negotiation, it was agreed that the following be considered and adopted. An efficient open market channel system with multiplicative transactions which are taken to help keep the marketing relationship. In addition, an evolutionary techno -based channel system be undertaken to initiate unilateral indulgence and to limit technical reluctance from the export agent. Axis Cordoza (export agent) would therefore accept $125,000 for 2 tonnes of Ugli oranges including delivery services. In addition, revolutionary short term intermediary system that limits ill intentions on the business was adopted. The negotiations proceeded as it was considered prudent that the seller could accept $125,000 with delivery for buyer A. In this negotiation too, the buyer a preferred a short term contract under this assignment. For the year. Hence the delivery was to be made via a plane. At this order quantity, the potential transactional cost is measurably checked, and pharmaceutical goals attained at accurate levels. At the same time delivery by plane necessitates opportunistic turnover benefits and scale economies from the relationship in the short run. The idealistic model level is to capture relationship contempt and any reluctance from the export agent (Axis Cardoza). The agreement to effect this economic transaction only in the short run carries with it little self organizational problems and costs and other risky essentials of marketing mix. Similarly, from second years, negotiations proceed with focus on other competitive players and relationship maintenance given that buyer A (Dr Jones) also suffer internal South American trust inconsistencies with Buyer B(Dr Roland) due to espionage and other business violations. Given that the company wants 4 tones of Ugli oranges and the serum is not yet patented, same theory at practice yields results here when cost is absolutely checked and opportunism in the relationship maintained. As an exporter and a monopolist in supply of Ugli, oranges, consideration of the minimum acceptance price of $ 250,000 to $ 300,000 in viable, at a spread of time. 2 tonnes of Ugli orange order at $125,000 from Dr. Jones (Alpha pharmaceuticals) can increase total cash holdings after evaluating the material value of all the order units. Upon acceptance of this, exporter tends to minimize the loses that could occur should he transact fully with an unreliable buyer. Based on past interactions, past relationship record breeds ill intentions and can threaten successful negotiation. This is because it stimulates corporate reluctance and sets pace for mentality of ill opportunism. For instance, Buyer A wanted 4 tonnes of Ugli oranges to obtain serum in the Alpha pharmaceutical. On the other hand the Export agency has set reservation as per quantity and cost. In the cost benefit analysis, the adoption process will be faster if both consider long-term negotiations for a contract to ensure financial and economic stability. But based on mistrust, this cannot proceed since significant opportunity cost bracket is threatened to results into rebadging exercise. However, the scale volume for the monopolist who is also the price setter (Axis Cardoze) will result into increase in market share profits and significance in the economic transactions including benefits of brand name and other business protocols. This shows the extent of ill opportunism. It was conceivably agreed that The buyer A and seller was to consider long-term interaction that could yield much multiplicative business process of economics of scale and keep the viability of the relationship. The delivery option by airplane explores the cost of benefit in the technological life cycle of both the products. (Serum and the Ugli oranges) consequently, significant economic of scale and profitability occur for them after striking as spirit of relationship and mutual adaptations. To continue playing, it is agreed to offer at $300,000 with delivery and hence viable for the alpha pharmaceutical company and the export as both stand to economically gain at a mutual trade isoquant. An argument made by the buyer A and by the seller (axis cardoza) is on a proposition that buyer A should pay and accept four tones and this increases their participation opportunity set. This creates a contract.( Barnett,1998) As the negotiations proceeds between Axis Cardoza (the seller) and buyer A, the proposition was to accept two tones for $125,000 only including delivery. This meant that some of the Ugli oranges had to be left and to be sold later at competitive monopoly price against any probability of unilateral indulgence in the short run behavior model both in Tunable and Australia. If he doubles the tonnage, he will still achieve the reservation limit of AUD $250,000-$ 300,000 and remaining with an extra tonnage of Ugli oranges with prospects of higher yield the long-term option is to strategize along the monopolist market structure to outwit any competitor. Consequently, a contractual capacity at $300, 000 for 4 tonnes between the seller and buyer A was to be adopted to increase their economic propensities. However, this agreement is based on effect that long term relationship is considered and domestication of potential market realized. For both players(seller and buyer A), economic benefit in return is yielded and the seller cultivates much from the spirit of relationship and the opportunist position of the urgent need of oranges and possibility of future prospects in production. He (seller) benefits from the rebadging exercise of setting prices remaining in opportunistic price cells with maximum economic gains. The export agency also obtains higher margins at this point with limited short comings in the Ugli orange industry. The seller’s opinion of two year delivery is necessary to keep him up to the economically viable alternatives of stability in the market place where price per tone yields marginal technical pare to efficiencies in the re-restructuring stage and in the long run.( Barnett,1998) Basing on the mutualism between the seller and buyer B (Dr.Ronald), contractual capacity possibility valid. Since an economic based relationship proceeds from a multiplication of transactions over time, the possibility of conflict are logically thin since there will be mutual benefit and trade advantages. Similarly, the seller also postulates that $250,000 for three tones without delivery for buyer B could be a consideration. This could anyway increase his opportunity space and discount rate. With intentions to offer the contract to the highest bidder and considering the reliability of buyers, the seller stands to gain at this amount since the buyer (Dr.Ronald) wishes to have four tonnes at $300,000.However, the monopoly situation due to the seller and the turn over expectation of the serum keeps future forwarded contracts alive as the seller still expects increase in Ugli orange production. The seller also gains and benefits at this point from reduced distribution cost as there is no delivery option for B and the buyer (Beta pharmaceuticals) enjoys relation with trade benefits and the likelihood of selling serum with better market adoption. The possibility of formation of long term contracts with little vitiating elements is also an option and open space that can be explored by the agents. . Contractual capacity here explores a number of mutual benefits and congruency as it is both targeted towards increasing the economic profit share market domination and establishment of adaptable relationship. Additionally, due to possible investment propensities and serum manufacture, the buyer B (Dr. Ronald) agrees to experiment with Axis Cardoza in the deemed future to establish a mutual economic relationship with Ugli orange supplier. On the other hand, the ultimate agreement between Dr Jones (buyer A) and the export agency increases the seller’s participation and the share in the economic market .This is due to added network position enjoyed by the sellers (export agent) and the increased cost of contractual involvement.( Roy,2003) Upon negotiations too, buyer A and the export agency agree on adjusting the amount of tonnage to four tonnes. This agreement has the potential effect of reactivating previous failed transactions and increasing significant opportunities in market rebadging and productivity. The future of Ugli oranges is also re-established in terms of product modification in factor terms, hence increasing the marketability and the distribution ability of the Ugli oranges and the consumer market place. As a result of these negotiations the seller opts to achieve the flexibility in operating in this scarce micro market and can contract wisely upon knowing information about the bidders. Market demand information and series of production and stock related information can be found with little technicalities. Cooperation can therefore be established when the negotiations proceeds at four tonnes at $300,000.Stability for the buyer A (Dr.Jones). At this negotiation level, associated market choice is expanded and both representatives tend to enjoy economic overhead and fringe benefits of mutual trust with little chances of bureaucracy. Similarly, negotiations at $300000 for 4 tonnes for buyer B is deemed fit as the buyer can use the opportunity to produce the required pharmaceuticals and increase trade capacity in south America ( Roy,2003). Cooperation in this relationship will result into short, medium and long term benefits for the Axis Cardoza agency as it will result into committing transaction with certainty of benefit, as an element of at most good faith and optimization will be of no doubts. Dr.Jones upon receiving cooperation can proceed to represent alpha pharmaceuticals and explore mechanisms to recover business reputation it suffered due to lack of patent right. This will allow production of serum with regard to property rights and sensitivity to paradox in production frontiers. Cooperation for Beta pharmaceuticals also borrows economies of scale and market share benefits as it could Open and expand the profit margin and its participation considerably ( Roy,2003). APPENDIX NEGOTIATION GAME –DECISSION ALTERNATIVE SHEET RETAILER REPRESENTATIVE: Axis Cardoza MANUFACTURER REPRESENTATIVE: Alpha and Beta pharmaceuticals NEGOTIATION: between the seller and buyer (A and B) DATE: START TIME; FINISH TIME: DECISSIONS Assumption made The parties in the agreement are aware of all binding rules and set obligations. The ultimate agreement results into mutualism to both parties. There is no apathy of information and conflict of interest of earlier parties. Quantities to be offered Units (tonnes) of Ugli orange four tonnes Expected amount $300000 Minimum quantity of Ugli orange to be ordered for delivery; as per the negotiation Order time: two years for A (short term) Five years for B (long term) Payment discount period; within three years Special delivery : buyer A Cost responsibility: seller On-going commitment and relation adoption Other areas negotiated and decision reached N/A We hereby agree that both parties agree to the decision outlined above Seller ___________________________signature Buyer A___________________sign_________________system Buyer B___________________sign_____________ Work cited Barnett, Randy E. (1986). A Consent Theory of Contracts Columbia Law Review Roy, M. (2003). Business Law Today: The Essentials: South-Western College/West, Ohio Read More