Negotiation Analysis Form Alpha Beta
1. The Problem: What is the problem that must be solved in this negotiation?
Beta’s , Inc., a robotic manufacturing company had a preliminary discussion with Alpha Inc. about a possible licensing arrangement. In this discussion, the companies agreed to be in a relationship for 5 years, Alpha, Inc. will receive fully assembled Robots from Beta’s In. and will sell under Alpha, Inc.’s name, companies will have a technology exchange, and the agreement will be nonexclusive. In this negotiation the four issues that need to be decided are 1)the number of different models to provide to Alpha, Inc., 2) the number of Beta, Inc. units to be imported by Alpha each year,3) the matter of technology sharing, and 4) the royalty rate.
2. Negotiation goals and decision makers:
a. What was your specific, high expectation in this negotiation?
Our high expectation for this negotiation is to persuade the Alpha team to agree with our needs to attain greater scale economies in production. Specifically, Beta Inc. wants to develop a presence in the rapidly growing Alphan markets and ultimately be the first to market low cost, universal robots with vision. In order to attain this goal, our high expectation of this negotiation is to convince Alpha Inc. to give us access to Alpha’s Inc. artificial vision technology after the first year of our agreement. We will provide four models in production, 300 units of each model, at a 5% royalty rate.
b. What was your BATNA?
The Beta’s best alternative for this negotiation is to offer a compromise solution for this licensing agreement. Beta, Inc. will agree to create up to 6 models as we currently have 8 models in production. We feel that would be a comfortable amount in production while controlling capital expenditures. The Beta team will agreed to increase the number of units imported each year only if royalty rate is increased to 7%-10%. This will be determined based on increased number of units.