The Set-up – the all important negotiation approach
With 2012 coming round the corner, just bear in mind as you launch into new deals, that a much overlooked aspect of negotiating in Asia is the deal “set-up”. The set-up is particularly important because if you don’t get this part of it right , no matter what tactics or strategy you use – you won’t be able to make much headway. Here’s an example of a set-up that went wrong:
A local company here wants to negotiate a buy-side deal with a supplier. the
local company sends their top procurement officer to make the purchase. A deal is struck. Sometime later, a similar procurement exercise is done, but the vendor sends a another member of their staff to cut the deal with the top guy in the buyer’s company. The buyer doesn’t know the vendor’s staff very well and initiates a casual conversation. In the conversation, the vendor lets on that he’s leaving the company. The deal goes less well as the procurement pro realises that the the vendor’s staff isn’t fully motivated to get the best possible deal for his company as he is leaving his employer in a matter of weeks. He caves in, and makes too many concessions.
Lesson: The practice of initiating seemingly innocent chit-chat prior to business in Asia is often a great practice in unearthing nuggets of information that can help you make a better deal. In this case, the set-up was all wrong. The vendor should have sent someone with a greater vested interest in the eventual outcome of the sale
Tags: asian deals, set-up
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