You're listening to Business English Pod, the Business English podcast for professionals on the move.
Hello, and welcome back to Business English Pod.
My name's Edwin, and I'll be your host for today's lesson on strategic negotiations.
This is actually the third part in our ongoing series on advanced negotiations and follows on from what we covered in BEP 241 and 242.
Business is a competitive game, but companies don't always have to work against each other.
Sometimes they work with each other to form strategic partnerships.
By combining forces, they can often make more money than they would working alone.
But forming a good partnership isn't easy.
It involves getting together and working out an arrangement that makes sense for both parties.
And that means both companies are going to have to give something to get something.
This give and take is established in the strategic negotiation, which is what we'll look at today.
We'll cover some useful techniques for negotiations, including laying out an opening position, presenting a counter position and emphasizing a deal breaker.
We'll also cover how to use strategic tentativeness and make a strategic threat.
As you may remember, the discussion centers around a US auto parts company called Sigma, an MVP, a Japanese distributor, who are trying to establish a strategic partnership.
Previously we heard Mike from Sigma map out a negotiating position with his colleagues back in the US.
Now he's going to talk to Lisa, who is a lead negotiator for MVP.
Through this negotiation, Mike and Lisa are trying to work out a deal for MVP to distribute Sigma's products in Asia.
As you listen, try to answer the following questions.
1.
What part of the deal does Lisa emphasize is essential for her company?
2.
Which aspects of business does Mike want to share costs on?
3.
What does Mike say at the end of the dialogue that might worry Lisa?
Alright Lisa, maybe we should jump right into things here.
Yes, right.
So, as I've said, Mike, we would love the chance to represent Sigma in Asia.
And for us, that means a deal that includes all of Asia.
I see.
Well, that might be Yeah, so what this means is that we'd have your products moving through our entire distribution network, including China.
Well, Lisa, okay.
I know you want to talk about China.
But first, we really need to lay out some cost issues on the table.
We're going to need to work out an arrangement for shared staffing and marketing, amongst other things.
Well, for sure, Mike.
We can definitely go over some ideas there.
I get that staffing and marketing are important considerations.
Yeah, very important on our end.
But I have to say that the scope is pretty much non-negotiable for us.
For this to work, we need all of Asia.
I mean, if there's no China, there's no deal.
No China, no deal, huh?
Okay, I get what you're saying here, Lisa, but it's not a simple issue for us.
Going in on China would mean we'd have to get out of an existing partnership.
A good one at that.
And you know, we've been taking a long hard look at the costs involved here.
Well, okay, as long as we're talking money, I honestly believe that Sigma has a lot to gain here.
We've got a solid footing in China and our sales there are really good, not to mention the rest of Asia.
You've seen the numbers.
For sure, I have.
And yeah, they're impressive.
But we've actually been looking at a few different possibilities for Asia.
And finding the right deal means finding a partner that we can work well with.
Now let's go through the dialogue again and look at the language and techniques Mike and Lisa used during their negotiations.
All right, Lisa.
Maybe we should jump right into things here.
Yes, right.
So, as I've said, Mike, we would love the chance to represent Sigma in Asia.
And for us, that means a deal that includes all of Asia.
We join the discussion.
As Mike says, he wants to jump right into things or get the negotiation started.
And how does Lisa start?
Well, she wants to make her company's position very clear right at the beginning.
She starts on a positive note, saying they would love to represent Sigma in Asia.
But Lisa then lays out an opening position very clearly by saying that a deal would include all of Asia.
Laying out a clear opening position is a great way to get a negotiation started.
So let's practice a few more examples.
Okay, what we're really looking for is a long-term deal that gives us exclusive rights.
What we would like to see is stronger co-branding and a joint marketing effort.
We're going to need access to your entire North American service network.
A deal for us would have to include the use of your Mexican production facilities.
Now, let's hear how Mike responds to Lisa's opening position.
I see.
Well, that might be Yeah, so what this means is that we'd have your products moving through our entire distribution network, including China.
Well, Lisa, okay.
I know you want to talk about China.
But first we really need to lay out some cost issues on the table.
We're going to need to work out an arrangement for shared staffing and marketing, amongst other things.
Just to be sure, Mike is perfectly clear on her position.
Lisa explains that her company would want to move Sigma's products throughout their whole network, including China.
Lisa is emphasizing this at the beginning because they've already discussed aspects of the partnership before the actual negotiation and she understands that China may be a sticking point.
But does Mike respond directly to the China issue?
Well, he acknowledges the fact that Lisa wants to talk about China, but he's not quite ready for that yet.
He wants to bring forward or lay out his company's position on shared costs.
In this case, because Lisa has already presented a negotiating position, we can say that Mike is presenting a counterposition.
So now both companies have some demands on the table, as Mike describes it.
Let's go over some more ways of presenting a counterposition during a negotiation.
To make this happen, I think we're looking for a little more leeway on pricing.
On our side, we'll need a share of profits on every new client contract.
We're prepared to go in on this, but we need to be your sole supplier.
For us, transport and logistics costs need to be fully covered.
Now, back to the dialogue as we hear Lisa continue to stress the importance of China.
Well, for sure, Mike.
We can definitely go over some ideas there.
I get that staffing and marketing are important considerations.
Yeah, very important on our end.
But I have to say that the scope is pretty much non-negotiable for us.
For this to work, we need all of Asia.
I mean, if there's no China, there's no deal.
Initially, Lisa sounds positive and cooperative in response to Mike's counterposition.
She uses phrases such as, for sure, and we can definitely go over ideas, to show cooperation.
And she explains that she gets or understands that staffing and marketing are important.
But her attitude of cooperation comes partly to set up a tough stance.
She follows up by saying that the scope, or what the deal includes, is non-negotiable.
And to be perfectly clear, she restates this idea twice.
As Lisa explains, if there's no China, there's no deal.
This is what we call a deal-breaker, an issue that must be agreed to for there to be a broader agreement.
And Lisa wants to emphasize the deal breaker very clearly at the beginning of the negotiation.
Because if Mike doesn't agree to include China, there's no point in negotiating.
What are some other ways we can emphasize a deal breaker?
Let's try a few more.
We simply can't do a deal for anything less than a 30 share in the venture.
If you aren't willing to share your research, I can't see how we can partner.
Any deal that doesn't include your Indian markets just isn't going to work for us.
We can't really settle for anything but full access to your entire content network.
How does Mike respond to Lisa's tough stance No China, no deal huh.
Okay, I get what you're saying here, Lisa, but it's not a simple issue for us.
Going in on China would mean we'd have to get out of an existing partnership.
A good one at that.
And you know, we've been taking a long, hard look at the costs involved here.
Mike understands that excluding China is a deal-breaker for Lisa's company.
But he doesn't want to just agree right away.
The whole point of negotiation is to get something out of the other party for the things we give up.
So how does Mike do this?
Well, at this point, he uses strategic tentativeness.
In other words, he tries to sound unsure or hesitant, saying that it's not a simple issue.
Sigma would have to get out of a partnership in China, and they're looking at the costs involved.
Sounding unsure or tentative may help to soften the other party's position.
If they really want a deal, then maybe they'll agree to include more of what you want.
Let's go through some more ways of showing strategic tentativeness.
Well, we're going to have to think about that some more.
I'm not totally sure about that.
It might work, but it might not.
Transport and logistics costs, huh?
I guess we might consider that.
Co-branding is something we've talked about in the past, but there would be challenges.
Next, we hear Lisa pick up on Mike's mention of costs and money.
Well, okay, as long as we're talking money, I honestly believe that Sigma has a lot to gain here.
We've got a solid footing in China and our sales there are really good, not to mention the rest of Asia.
You've seen the numbers.
For sure I have.
And yeah, they're impressive.
But we've actually been looking at a few different possibilities for Asia.
And finding the right deal means finding a partner that we can work well with.
Because Mike discussed the costs for his company.
Lisa wants to emphasize the other side of the financial equation the benefits.
Remember she appeared quite tough on the China issue, but now, after Mike's tentativeness, it almost sounds like she's pitching the partnership again, talking about her company's solid footing in China and strong sales.
Mike can feel Lisa getting a bit softer, so he follows a similar angle when he says they've been looking at a few different possibilities in Asia and emphasizes the need for a partner they can work well with.
Why would Mike talk about other possibilities and the qualities of a good partner?
Well, he's making a strategic threat.
It's not a direct threat, like if you don't agree with us, we'll find another partner.
It's more of an indirect threat and the purpose is to get Lisa to soften her position even more.
What are some other ways of making good indirect threats in a negotiation?
Let's practice a few more examples.
Of course, we do have other options we're exploring.
The other route here is for us to compete in the same market.
We've actually got a lot of interest from other companies as well.
Without exclusive rights, it might be best if we just go it alone.
Well, Mike has responded to Lisa's strong stance with tentativeness and a strategic threat.
And we'll have to wait until the next lesson to find out how this affects the negotiations.
Now, let's practice some of the language we learned in today's lesson.
Imagine you are negotiating a sales partnership with another company.
I'll give you a cue telling you what you need to do.
Then you'll hear a prompt.
Use the words in the prompt to make an effective statement during the negotiation.
We'll guide you through each step in the practice and play an example answer for each response.
Ready?
Let's give it a go.
Start off by describing an opening position about sharing operating costs.
We need share operating costs project Answer.
We are going to need to share the operating costs of the project.
Next, try explaining a counter position about using the partner's facilities.
Would like Use Facilities Production.
Answer Well, we would like to use your facilities for production.
Now, emphasize a deal breaker about a deal being exclusive.
Answer.
If this arrangement is not exclusive, then there can be no deal.
Next.
Show strategic tentativeness in response to a demand from the other party.
Well, have to, consider, more.
Answer.
Well, we would have to consider that some more.
Finally, make a strategic threat by saying you have other possible partnerships.
We looking into other partnerships.
Answer.
We are actually looking into other possible partnerships as well.
Now, let's practice some of the vocabulary and collocations we've covered in this lesson.
In a moment, you'll hear a series of sentences with a word replaced with a beep.
Repeat each sentence, including the missing word.
For example, if you hear, I'll call you tomorrow to go the framework of the deal.
You can say, I'll call you tomorrow to go over the framework of the deal.
After each response, we'll play the correct answer.
Let's begin.
We really need to have a long, hard look at all the costs involved.
Our company has established a very strong in Europe.
Answer.
Our company has established a very strong foothold in Europe.
We have recently added Australia to our broad distribution.
Answer.
We have recently added Australia to our broad distribution network.
Our products are very effective, not too... well-designed.
Answer.
Our products are very effective, not to mention well-designed.
We've reached the end of this lesson, the third in our series on strategic negotiations.
We've learned how to lay out an opening position, present a counter position and emphasize a deal breaker.
We've also learned how to show strategic tentativeness and make a strategic threat.
Thanks for listening, and see you again soon.
