Section 13 - Negotiation Tactics & Competitive Strategies Flashcards
(39 cards)
Negotiation Barriers
Four general sources of cultural conflicts:
- Language: ineffective translators (or none).
- Nonverbal behaviour: conflicting signals.
- Values: ethic standards, short-term vs long-term goals.
- Thinking and decision making processes: linear or parallel evaluation.
Linguistic Aspects and Nonverbal Behaviours (videotaped negotiations).
It went over the bargaining behaviours of different cultures during negotiations and the frequency of behaviours that occur across cultures and countries.
Negotiating Styles: Japan
Their style of interaction is among the least aggressive (or most polite).
Facial gazing, touching or the use of “no” are the least among all sampled groups.
Threats, commands, and warnings are avoided; positive promises and recommendations (for agreement) and silence (for disagreement) are the more common responses.
Frequent use of silent periods.
Negotiating Styles: South Korea
Negotiators used considerably more threats and commands than did the Japanese.
Silent periods are not used; “no” is often used; interrupting is acceptable.
Negotiating Styles: China
There is an emphasis on asking questions, but little information is offered.
Most statements made by Chinese negotiators were classified as information-exchange tactics (but without the follow-through).
Other behavioural aspects of their behaviour were quite similar to the Japanese, particularly the use of silent periods.
Negotiating Styles: Taiwan
The behaviour of the businesspeople in Taiwan is similar to that in South Korea.
The Chinese in Taiwan were exceptional with the time duration of facial gazing; almost 20 or 30 minutes.
They ask fewer questions but provide more information (self-disclosures) than did any of the Asian groups.
Negotiating Styles: Russia
The Russians’ style was quite similar in many respects to that of the Japanese.
Only the Russians used more silent periods than did the Japanese.
They used “no” and “you” infrequently and used the most silent periods of any group.
Only the Japanese did less facial gazing, and only the Chinese asked a greater percentage of questions.
But during intense negotiations, they became vocal and aggressive (similar to Spanish negotiators).
Negotiating Styles: Germany
The behaviours of the Germans fell toward the centre of almost all the categories.
Germans demonstrated a high percentage of self-disclosures (47%) and a low percentage of questions (11%).
Negotiating Styles: US, UK
Like the Germans, the U.S. and British managers fell in the middle of most categories.
They interrupted less frequently than all the others, but that was their only unique distinction.
Negotiating Styles: Spain
The Spanish used the highest percentage of commands (17%) of any of the groups.
They gave comparatively little information (self-disclosures, only 34%).
They interrupted more frequently than any other group and used the terms “no” and “you” very frequently.
Negotiating Styles: France
French negotiators were the most aggressive of all the groups.
They used the highest percentage of threats and warnings.
They also used interruptions, facial gazing, and “no” and “you” very frequently as compared with the other groups.
Negotiating Styles: Brazil
Brazilian businesspeople, like the French and Spanish, were quite aggressive.
They used the second-highest percentage of commands of all the groups. On average, the Brazilians said the word “no” 42 times, “you” 90 times, and touched one another on the arm about 5 times during 30 minutes of negotiation.
Facial gazing was also high.
Negotiating Styles: Mexico
Both verbal and nonverbal behaviours were quite different than those of their Latin American (Brazilian) or continental (Spanish) cousins.
In many respects, the Mexican behaviour was very similar to that of the negotiators from the United States.
Negotiating Styles: French-Speaking Canadians
French-speaking Canadians behaved quite similarly to negotiators from France; they used a high percentage of threats and warnings, and were comfortable with interrupting and maintaining extended (aggressive by some cultural standards) eye contact. This style does not work well with English-speaking Canadians.
Negotiating Styles: English-Speaking Canadians
If English is their first language, they used the lowest percentage of aggressive tactics (threats and warnings) of all groups.
However, they used noticeable more interruptions and “no’s” than negotiators from either of their major trading partners: the United States and Japan.
Differences in Decision-Making Processes
When faced with a complex negotiation task, most Westerners divide the large task into a series of smaller tasks (linear, monochronic).
Asians prefer all issues to be discussed at once (parallel, polychronic).
Negotiation Process Overview
- Selection of the appropriate negotiation team
- Management of preliminaries such as training, preparations, and manipulations of negotiation settings.
- Management of the negotiation process (the planned negotiation agenda).
- Appropriate follow-up procedures and practices.
Aspects of the Negotiation Setting to be Manipulated Ahead of Time
- Location: The Russians who wanted to spend their winter in southern France and so took a couple months to negotiate with the Americans who wanted to get the deal done.
- Physical arrangements: shape of the table and lucky numbers based on the culture and their preferences.
- Skill sets of participants
- Number of participants
- Audiences (news media, stakeholders, junior managers, etc.)
- Preferred communication format
- Time limit
Theory #1: Porter’s Five Forces on Competition:
Porter’s Force 1: Threat of New Entrants: Barriers to Entry
- Economies of Scale
- Production Differentiation
- Capital Requirements
- Switching Costs
- Distribution Channels
- Government Policy
- Competitor response
Porter’s Force 2: Threat of Substitute Products
Availability of substitute products places limits on the prices market leaders can change. High prices (or quality/reliability issues) may induce buyers to switch to a substitute.
Porter’s Force 3: Bargaining Power of Buyers
The most influential buyers are manufacturers and retailers, not consumers.
Buyers seek to pay the lowest possible price. They have leverage over suppliers when:
-They purchase in quantities large enough to ensure that an order cancellation can threaten the seller’s future.
-They are allowed ‘backward integration’; they gain partial control of the manufacturing process in terms of specific features and quality.
Porter’s Force 4: Bargaining Power of Suppliers
When suppliers have leverage, they can raise prices high enough that they will control the profit margins of the sellers. This occurs when:
- Suppliers are large and few in number.
- Supplier’s products are critical inputs, are highly differentiated, or carry substantial switching costs.
- Few substitutes exist.
- Suppliers are capable of selling the product themselves.
Porter’s Force 5: Rivalry Among Competitors
This feature refers to all actions taken by firms to improve their positions and gain advantage over each other. It is usually a function of:
- Price competition
- Advertising battles
- Product positioning
- Differentiation
Theory #2: The Competitive Advantage
A competitive advantage will exist when there is a match between a firm’s distinctive competences and the factors critical for success within its industry.
There are two marketing/prices concepts that will achieve competitive advantage:
-A low-cost strategy that enables it to offer products at lower prices than competitors.
-Differentiating products so that customers perceive unique benefits, often accompanied by a premium price.
