International Negotiation, Case Study Example

What are the items to be negotiated?

Alex’s Peugeot 206

What interests might Michèle have in buying the car from Alex?

Michèle’s interests are buying a suitable vehicle which she may need to use in order to travel to and from work once she finishes her studies.

What interests might Alex have in selling the car to Michèle?

Alex’s interest in selling his car is that he can have enough money in order to buy his dream car from a nearby dealer.

What alternatives does Michèle have if she doesn’t buy the car from Alex?

At present she does not have any other alternatives as she has been too busy finding the right job and completing her studies.

What alternatives does Alex have if he doesn’t sell the car to Michèle?

His only alternative is to trade in the car to the dealer, but the price offered is far lower than what he is expecting.

What is the ideal price that Michèle would like to pay for the car?

Michèle’s ideal price is to pay Alex 1950 euros.

What is the highest that Michèle is willing/ able to pay for the car?

Michèle’s budget is a maximum 2750 euros (including repairs).

What is the ideal price that Alex would like to get for the car?

Alex’s ideal price he wants for his car is 2900 euros.

What is the lowest price that you think he is willing to accept?

His absolute lowest price would be 2300 euros.

Do you see an overlap between the Alex’s lowest selling price and Michèle’s highest buying price? If so, how much is the overlap? 

There appears to be an overlap of 600 euros (2900 – 2300)

Indicate the price range at which you think the transaction will be made (in Euros). Why?

2300 to 2400 euros will be my thoughts on the eventual price range. Alex has his absolute minimum of 2300 to consider, and Michèle will need extra money for any repairs or maintenance once she does purchase it. Any figure above 2300 will be a bonus for Alex.

Indicate 3 or 4 main elements which, according to you, may influence the negotiation and it’s outcome. Why?

The current mileage clocked on the car is detrimental to Alex,

The body work/ appearance issues on the car is detrimental to Alex,

The fact that Alex needs the money urgently from the sale of the car,

Currently Michèle has no other options with which to compare against and drive a harder negotiation with Alex.

Who do you believe has more power in this negotiation—Alex or Michèle? Why?

Clearly Michèle has more power in the negotiation – she has done some homework on the type of car and its current worth in the market, she has the monies up front, in cash, to waive under Alex’s nose, and she might even have some inside knowledge form her mother that Alex needs to sell the Peugeot quite quickly. If she looked elsewhere she could find alternatives whereas Alex does not have any other prospective buyers.