Wal-Mart Negotiations with Talley

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Communication Problems/issue Identification ---------------------------------1-2

Analysis Section ----------------------------------------------------------------------2-4

Recommendations -------------------------------------------------------------------4-6

References ----------------------------------------------------------------------------7

Communication Problem/Issue Identification

Effective communication strategies and a well thought out plan of attack are essential elements to any negotiation. Incorporating these two elements will significantly improve the chances of the negotiation ending in favor of the terms sought. Alas, in this day in age negotiators are finding themselves too busy to devote the necessary time to ensure proper preparation of the basics causing results to occur more so by chance rather than negotiator effort (Lewicki, 85). Fortunately, for Frey Farms they have an outstanding negotiator in Sarah Talley. Frey Farms faces a major issue in being such a small company attempting to compete with such big players like Wal-Mart and its contingent co-managed mega stores. That is why it is so important that Sarah incorporates an intelligent strategy, takes the time to do her homework on Wal-Mart, and devises an effective plan for the negotiation.

Negotiation Strategy and Planning

Sarah Talley is faced with convincing one of America’s biggest corporations to conduct business with a small, local business while competing against other “mega-store” competitors. Sarah knew what she wanted, she wanted her company to expand its business, serving more customers and gaining more profit. Sarah had successfully established a goal, which is the “first step in developing and executing a negotiation strategy” (Lewicki, 86). Sarah knew that her company was less strategically positioned than its competitors in terms of product differentiation and available resources. Sarah states that “As a young company, what Frey had to offer really wasn’t a whole of different than [her] competitors.” She also mentions that as a 19 year old CEO, she was afraid of how Wal-Mart might view her company’s leadership. Nevertheless, Sarah had the knowhow to establish “the pattern or plan that integrates an organization’s major targets, policies and action sequences into a cohesive whole” (Lewicki, 88), also known as strategy. A successful strategy used by Sarah was to ensure Frey Farms understood Wal-Mart’s culture, emphasizing Every Day Low Pricing as the syntax of her negotiation approach. Lewicki states that “If negotiators have not done their homework, they may not understand the strengths and weaknesses in the other party’s arguments” (85). Sarah understood that her company could save a significant amount of money by using school buses to transport produce instead of tractor trailers. Implementing this source of transportation, Frey Farms was able to offer lower prices than its competitors to Wal-Mart and allow Wal-Mart to continue its promise of Every Day Low Prices.

Structured and Creative Problem Solving

Another major issue faced by Frey Farms was their unsuccessful negotiation for a bid as a co-managed supplier. This loss forced Sarah’s company to deal with Wal-Mart as a third party supplier, which cost Wal-Mart and Frey Farms more money. This went completely against Wal-Marts culture and was strong negotiation point for Sarah to point out during the second negotiation for co-management. Sarah knew that Wal-Mart’s mission was to offer the lowest price to their customers and the way they were conducting business was going against Wal-Mart’s culture. Sarah brought up the issue in a Single Question Format. The problem was that unnecessary expenses were being made and everyday low prices were not available to Wal-Mart’s customers as promised. Sarah got together with one of Wal-Mart’s regional buyers and solved the problem though model known as the standard agenda. E&W describe the 7...
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