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 and establishing a position.
If you've had to negotiate anything, whether it's a salary, a corporate buyout or a partnership, you're sure to understand the importance of preparation.
You can't head into the room without first figuring out what you want and what you're willing to give up.
And if you're doing the negotiation with a team, it's even more important.
Everyone needs to know the plan and the strategy beforehand.
Otherwise, you'll be looking at each other and wondering, well, what should we do now?
Before a strategic negotiation, your team needs to establish its position.
But what does that involve?
How do we do that?
In today's lesson, we'll look at some useful techniques for this situation.
We'll cover summarizing key benefits, anticipating obstacles, and suggesting ways around obstacles.
We'll also learn how to decide on an initial position and propose a negotiating strategy.
In our last lesson we heard Mike, the VP of Asian Sales for an American auto parts company called Sigma.
He pitched the idea for a partnership to a former colleague who now works for a Japanese company called NVP.
In today's dialogue we'll hear Mike meeting with Grant Sigma's Senior Vice President of Worldwide Sales, and Tess, who looks after the business development and legal departments.
Together they're trying to work out an initial position before heading into the negotiation with MVP.
As you listen, try to answer the following questions.
1.
Why does Mike mention MVP's huge volumes? huge network and strong foothold in Southeast Asia?
2.
What does Mike suggest is a way around the China problem?
3.
Which idea does the team agree to save for later in the negotiations?
Alright folks, let's see what we can work out here.
Tess, jump in whenever.
Uh-huh.
Now I've seen the back and forth on the emails since we kicked this into play.
But Mike, what's your take on all this?
Well, I think we're all agreed that MVP is our best bet in Southeast Asia.
Huge volume, huge network and a really strong foothold in Thailand and Malaysia, which was our original goal in all of this.
Yes, indeed.
Good point.
But I think as you've seen, they're really keen on more than just Southeast Asia.
It's obvious they're pushing for a broader scope.
The whole of Asia, really.
And so the issue there is China?
We're talking about Hangshan Motors, right?
I don't see how we can give that up for something untested.
A bird in the hand, as they say.
Well, I think maybe there is a way around this.
If we buy them out, we should make it back on the MVP deal in three years, just from China alone.
Opening up the rest of Asia on top of that puts us well ahead of the game.
I see.
So you're suggesting we get out of our existing agreement?
You know, if we're talking about a broader partnership, maybe we should be thinking even bigger.
Lots of different possibilities here.
I was thinking South America in particular.
Right.
So let's make sure we've got everything straight.
We're game for a partnership.
We need Southeast Asia for sure.
We'll say we're prepared to buy out Hangchen when they push for that and we'll see if we can get them into our South American channels later.
Yes, I think that's a good way forward.
But we'll have to look into our agreements in Brazil and Argentina more closely first.
I can't pitch that with 100% confidence right now.
Yeah, definitely.
And when we talk with them, let's get on the same page about partnering.
Then wait for Lisa to start pushing the whole Pan-Asian thing.
We can play that a bit slow and see what we can squeeze out of them.
And sit on the South American idea until later.
Sound like a plan?
I think that will work.
We know they want to work with us.
And I think we've got a good plan to see us forward.
Now let's go through the dialogue again and look at the techniques that the team used to work out their initial position.
Alright folks, let's see what we can work out here.
Tess, jump in whenever.
Uh-huh.
Now I've seen the back and forth on the emails since we kicked this into play.
But Mike, what's your take on all this?
Well, I think we're all agreed that MVP is our best bet in Southeast Asia.
Huge volume, huge network and a really strong foothold in Thailand and Malaysia, which was our original goal in all of this.
When we join the conversation, Grant is just getting the discussion going.
There has been some back and forth or conversation by email on the issue since the idea was first kicked into play or initiated.
And what Grant wants to start with in their discussion is Mike's take on the partnership idea.
A person's take on something is their interpretation or opinion on it.
Mike is keen to show that it's a good idea and outlines why MVP is their best bet, which means it's their best option among many.
He mentions MVP's volume, their network and their strong foothold to highlight the key benefits of the potential partnership.
Before you decide on a position, it's a good idea to summarize key benefits like this.
Let's run through some more examples of summarizing the key benefits.
So with Keystone Industries, we'll get greater production capacity and lower operating costs.
A partnership will bring greater market share, a stronger brand image and higher revenues.
A deal with Sweetwater should give us access to Europe and help spread our risk.
This potential partner brings a huge customer base, a ton of online traffic and some key technology.
Mike has pointed out the benefits of the partnership, but that doesn't mean he sees no problems, as we can hear.
Yes, indeed.
Good point.
But, I think as you've seen, they're really keen on more than just Southeast Asia.
It's obvious they're pushing for a broader scope.
The whole of Asia, really.
Mike begins his next statement with, but which tells us he's about to talk about something negative or a potential problem.
The issue he raises is the likelihood that MVP will push for a broader scope, meaning a deal that includes all of Asia, not just Southeast Asia, as Sigma had originally planned.
The key here is that Mike is anticipating an obstacle during the negotiation.
He believes MVP will want a broad deal, which is something the team will have to figure out a response to before the negotiation.
Anticipating obstacles is an important part of good preparation.
So let's practice some more ways of doing this.
I can see the timeline on this being a big issue.
I don't expect they'll be willing to contribute to our upfront costs on this.
They're going to want a long-term commitment which might not work for us.
Mike has raised the scope of the partnership as a potential obstacle.
But what exactly is the problem?
Let's listen.
And so the issue there is China?
We're talking about Hangshan Motors, right?
I don't see how we can give that up for something untested.
A bird in the hand, as they say.
The problem, as Grant and Tess suggest, is that Sigma has a deal with a Chinese company and Tess seems hesitant to give that arrangement up or let it go for this new partnership, which she says is untested.
In other words, they don't know if it's going to work out or not.
It's clear that the scope of the deal is a real obstacle, but let's hear how Mike responds.
Well, I think maybe there is a way around this.
If we buy them out, we should make it back on the MVP deal in three years, just from China alone.
Opening up the rest of Asia on top of that puts us well ahead of the game.
Mike sees a way around this issue.
Another way of saying this is that he sees a way to overcome the obstacle, and his suggestion is to buy the Chinese company out or pay to get them out of their contract.
Mike also outlines why this is a good way around the problem, explaining that the new deal would earn them a lot more money in the long term, putting them ahead of the game.
Negotiations are full of obstacles, but a good negotiator knows how to suggest ways to overcome those obstacles, as you can see in the following examples.
We could possibly give them the timeline they need but ask for more cash.
If we get out of our arrangement with Tech Mob, we could free up the time and money for this.
Maybe we could just do a three-year deal with an option to renew.
Does Tess respond positively to Mike's suggestion?
I see.
So you're suggesting we get out of our existing agreement?
You know, if we're talking about a broader partnership, maybe we should be thinking even bigger.
Lots of different possibilities here.
I was thinking South America in particular.
It sounds like Tess is coming around to Mike's idea, in part because she sees the opportunity of an even broader partnership than MVP might want.
So, after discussing benefits, obstacles, and ways to overcome obstacles, what happens next?
Right.
So let's make sure we've got everything straight.
We're game for a partnership.
We need Southeast Asia for sure.
We'll say we're prepared to buy out Hangchen when they push for that.
And we'll see if we can get them into our South American channels later.
At this point, Grant wants to get everything straight or make sure everyone understands where the discussion is at.
He then outlines the basic idea for everyone, which is that they are game for or interested in a partnership.
That they'll buy out their Chinese partner and pitch an even broader partnership later.
This is the team's initial position, which Grant has summarized very clearly.
What are some other ways we can outline our initial position?
Let's practice a few more.
So here's what it looks like.
We need a 30% stake and we'll lend our marketing expertise to the venture.
Okay, let's push for a five-year deal including all North American operations.
I think the idea here is that we use their production facilities and we can get their products into Asia.
Alright, so we'll commit half the upfront cost and share the facility equally.
Now let's get back to the dialogue as Tess and Mike respond to Grant's outline of their position.
Yes, I think that's a good way forward.
But we'll have to look into our agreements in Brazil and Argentina more closely first.
I can't pitch that with 100% confidence right now.
Yeah, definitely.
And when we talk with them, let's get on the same page about partnering.
Then wait for Lisa to start pushing the whole Pan-Asian thing.
We can play that a bit slow and see what we can squeeze out of them.
And sit on the South American idea until later.
Sound like a plan?
Tess agrees that their initial position is a good way forward or a good plan, and Mike agrees too with the word definitely.
Mike then explains what he thinks they should do when we talk with them.
He's talking about what they should do during the actual negotiation and proposes this strategy with the word let's.
His idea is to get on the same page, which means come to a basic understanding and then to play it slow or not, to be too aggressive or pushy.
Then they can see what they can squeeze out of them.
When we squeeze something out of someone, we use our skills of persuasion and negotiation to gain advantages for ourselves.
As you can hear, Mike isn't talking about what they want, which is the position, but how they can get it, which is the negotiating strategy.
This is a key discussion point in preparation for a negotiation, so let's go through some more ways we can propose a strategy.
Let's just sit back and let them do the talking at first, then lay out our demands one by one.
When we sit down, let's define the scope clearly and make sure they know what's on and off the table.
We just need to play it slow, appear uncommitted, and let them sweeten the deal.
What does Grant think of Mike's proposed strategy?
I think that will work.
We know they want to work with us. and I think we've got a good plan to see us forward.
It sounds like Grant agrees and that the team is now prepared to head into the negotiation with a clear position and strategy in mind.
Now, let's practice some of the language we learned in today's lesson.
Imagine you are part of an internal meeting that is discussing your company's position before a big strategic negotiation.
Your company manufactures clothing, while the other company has retail outlets around the world.
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 meeting.
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.
First, summarize the benefits of the potential partnership.
This deal Increase Revenue.
Strengthen Brand.
This deal would increase our revenue and also strengthen our brand.
Next, anticipate a possible obstacle to the deal.
Problem.
They want exclusive contract.
Answer.
One problem is that they might want an exclusive contract.
Now, suggest a way around the obstacle that you anticipated.
Give rights North America, not Europe.
Answer.
We could give them rights to North America, but not to Europe.
Now state your company's initial position, that you are willing to create a new line if they promote your products.
They promote products, we create new lines.
Answer so they will promote our products and we will create a new line for them.
Finally, propose a strategy for the negotiation let's go slow, but make demands clear Answer.
In the negotiation, let's go slow but make our demands very clear.
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... You can say... After each response, we'll play the correct answer.
Let's begin.
I decided to buy my partner... and run the business myself?
I decided to buy my partner out and run the business myself.
Firstly, let's all get on the same about what we have to discuss.
Answer Firstly, let's all get on the same page about what we have to discuss.
We have a very strong in Europe, but we don't do much business in Asia.
Answer We have a very strong foothold in Europe, but we don't do much business in Asia.
If you sell your stocks while they're high, you'll be way ahead of the Answer.
If you sell your stocks while they're high, you'll be way ahead of the game.
We've reached the end of this lesson, the second in our series on strategic negotiations, in which we focused on establishing an initial position.
We've learned how to summarize key benefits, anticipate obstacles and suggest ways of overcoming those obstacles.
We've also covered how to decide on an initial position and propose a negotiating strategy.
Thanks for listening, and see you again soon.
