●What would be the benefits and drawbacks of reconciling with Sakari?
There are both benefits and drawbacks of reconciling with Sakari for Nora. The benefits are was follows. First, Nora was motivated by Sakari’s advanced technology and the possibility of acquiring it and replicating it in the future. Nora was interested in securing a share of the contract from TMB, as well as the technology to switch from telecom. Second, Compared to other larger size multinational companies, Sakari was prepared to work out customized products according to Nora’s needs, as other larger companies are less willing to provide custom-made products. Sakari’s networks were easily adjustable and could cater to large ex¬changes in urban areas, and small ones in rural areas. Moreover, Sakari has flexible approach to resources that will benefit Nora. In addition, Nora also was looking to expand their R&D department, 5 to 6 percent over the next two to three years. Sakari used about 17 percent of its revenue for R&D and was looking to open research centers in leading markets, including Southeast Asia. The drawbacks are that Nora needs large investment in the building for the joint venture as well as that other companies have more established brands than Sakari.
In the meantime, there are also benefits and disadvantages for Sakari in the joint venture. However, Sakari seems to have more leveraging in this negotiation in terms of the equity ownership. An appropriate leverage equation might be an equity split in 45% for Sakari and 55% for Nora.
●How would you describe the approach to the negotiation?
The approaches to the negotiation are quite different for the two parties. Hard Ball strategy are adopted by the Sakari since their negotiators tend to be very serious, reserve and cold. They are less verbal and do not have much facial expressions. It is difficult to determine whether they are interested in the deal or not. They also have two camps within Sakari-one for the...
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