Adrian Sanchez

Knight And Excalibur Engines:

Background - From Bargaining to Negotiating:
My group formed by Julian Quiroz and Me (Adrian Sanchez) were defending
Excalibur Engines, a supplier company specialized in pistons.
There were several conditions that we had to maintain in order to be profitable.
After having our latest offer from a Swiss co at $600 per piston we wanted to
have a similar offer from the Buyers formed by Lucas Salles and Alice Caire.
After gathering all the information we set up some goals we wanted to achieve
during the negotiation. Some of them were:
1. Receive more than our minimum cost price. Our production cost per
piston was $480.
2. As we knew they were in a rush we had somehow more power of
decision as we already had the pistons prepared from our nullity
agreement with the Swiss company, for that reason we wanted to receive
a lot of benefits from our negotiation.
3. We wanted to make them on charge of the 10% of the extra cost that
involved the individual testing and we were willing to negotiate the 5%
rush fee, perhaps with a reduction of a fee if they provided us
advertisement.
4. We accorded to make them aware that what they were buying was a
well-done product. As having the testing certification made us excel in
the quality of our pistons.
5. We wanted free advertisement and communication to the government so
they had knowledge from our product usage.
The bargaining started with an early proposal from my part as they asked at
what price could we afford them the 8,000 pistons. Our offer was $560 without
adding the fees. They did not fully agreed on this offer as they already had one
number in their minds. We realised from that when we asked them what did
they think about our offer. Right ahead they said that they had a lower price in
their minds. They ended up proposing us $500 for the delivery.
Once we had already put our offers in the table, we started talking about the
conditions and reasons of why we had to set one or another price. The
discussion was mainly about the fees topic, we wanted free advertisement and
they did not want to pay the fees, so after long talking we arrived to a
conclusion, we paid for the rush fee in exchange for our free advertisement,
maintaining the 10% extra of the testing costs. The price would be $570.
In the negotiation several things came out that we did not approach efficiently.
Our common problem was, we got stuck with our individual goals harming
sometimes the fluency of the negotiation as we did not gave the necessary

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importance to other ideas that were coming up.
The most noticeable ones will be mention now:
-Instead of making them pay 10+5 % fees charges we said they could pay 8%,
we did not give importance to it.
-They told us we could reduce now our prices and if everything worked well
then the next time we were going to be their first option. We did not consider it
neither, mostly because of the uncertainty of the future.
The Feedback we received from our peer Daniel Rodriguez, was very helpful
for our professional career.
On the one hand, some of the good aspects he mentioned were: We all
discussed and worked well together. We all thought in the proposals the other
group made and before answering straight ahead we internally discussed. We
all looked prepared and supported our thoughts with solid arguments. The final
offer was accorded by a both sides agreement.
On the other hand, several aspects we can improve in next negotiations were
revealed. The most important one that has already been referred was, listen to
what the other company has to say and if possible let them go further into
details. Another point was let the pricings, offers and fees apart to try and see
the world, not just those numbers. Putting yourself in their shoes will help things
flow, as you will already know what they are looking to obtain after that meeting.
Conclusion:
This exercise helped me a lot to understand what were the core aspects of a
well-done negotiation, they made me see what I was doing wrong in a nonprofessional environment, making me acquire the necessary knowledge to not
repeat the same mistakes again.
What I enjoyed the most about this negotiation was how we started speaking in
a very informal way and after the first few minutes we suddenly changed our
speeches into professional ones making the fake scenario look like real. In my
point of view, as everyone took it seriously and we defended our thoughts with
very solid arguments, counterattacking was very difficult. That made the
conversation really interesting and challenging.
I learnt that as a team we were well coordinated although we should have been
slightly better prepared for the things they were going to come up with. Thus
that would have been very beneficial for both as the agreement would have
been signed faster, as well as, for future relationship with our buyers.