Fontaine and Gaudin’s negotiation strategy focused on dependency on the successful long-term relationship that Pacific and Reliant Oild had developed overtime as well as placing an emphasis on the value of relationship to the success of both stakeholders (Pacific Oil Company Case 2). This approach is appropriate owing to the fact that it creates a platform for both stakeholders to resolve conflicts that may emerge in the process of negotiation amicably. Moreover, their negotiation strategy places emphasis on the projections that have been made globally regarding the shortage of desirability for Reliant Company to assure them of constant supplier (Pacific Oil Company Case 2). The strength of this approach is based on the fact that it ensures that operations within Pacific Oil Company are not jeopardized as a result of shortage of materials or supplies. The reliance of past and future quality relationships to determine what might appear as high prices is also a crucial and effective approach. This is because it facilitates appropriate pricing in a manner that does not expose the company to high levels of expenditures. In their negotiation strategy, Fontaine and Gaudin also rely on information indicating what the competitors of Pacific Oil Company cannot offer. This approach basically provides a platform for determination of the strength of the company, hence, enabling key stakeholders to determine how the company could improve its strengths in order to stay ahead of their competitors. However, Fontaine and Gaudin’s negotiation strategy had certain weaknesses; to begin with, it relies on past data to project probable future negotiations. This is not a recommended approach considering the fact that information indicating global supply shortages may be marred by certain errors, hence leading to inaccurate decision-making, for instance: Stakeholders responsible for the analysis and collection of global supply data may be depend on biased data, hence leading to generation of erroneous information. The dependence on past and future relationships to determine appropriate pricing is also not an effective approach; this is due to the fact that to may create a win-lose situation among the negotiating parties i.e. such negotiation strategies may only favor Pacific Oil Company instead of both the negotiating parties. Consequently, Fontaine and Gaudin’s advanced strategic planning was not adequate to enhance a successful renegotiation with Reliant Chemical Corporation. Their approach to the negotiation appeared casual and that was not based on adequate forethought. Their focused majorly on pricing, forgetting the negotiations are based on give and take. Moreover, Fotaine and Gaudine made an assumption that the contracting/negotiation process would be characterized with quick generation of results or agreements, hence, they failed to engage Reliant Chemical in a consultative forum so that they could clarify any emerging issues.
Strengths and Weaknesses of Hauptman’s and Zinner’s Negotiating Strategy
Hauptaman’s negotiation strategy focused on two key issues; pricing of VCM supplies and minimum quantities. According to Zinner, Reliant Company was willing to maintain a positive rapport with Pacific Oil Company, however, he was of the opinion that certain parameters used to determine the pricing of VCM should be adjusted in order to reduce the price of VCM by approximately 2 cents for every pound (Pacific Oil Company Case 2). The strength of this approach is based on the fact that it creates a win-win situation for both the negotiating parties; however, according to Fontaine and Gaudin, this would result to a net reduction of about $4 million annually. On the other hand, the use of minimum quantities is also an effective approach which would ensure that both parties operate under certain minimum agreements that would ensure that none experience loss or interruption of the normal activities. The other negotiation strategy that was applied by Hauptmann and Zinnser is a delay tactic or a salami technique; during each meeting, they gave small details and scheduled another date for negotiation as they wait for Pacific Oil Company to contact them. The strength of this technique obviously benefited Reliant Corporations in the sense that it enabled Hauptmann and Zinnser to drag the negotiation processes, while making new concession during every meeting.
The weakness of Hauptman and Zinner’s negotiation stragey majorly occurs on the use of minimum quantities, that is, depending on the minimum quantity of VCM materials that Reliant should purchase annual depending on the growth and expansion of the PVC market. The reliance of market expansion and growth is not a recommended negotiation approach. This is because markets are usually characterized with economic irregularities and uncertainties that may affect buyer’s purchasing power, for instance: Incidences of economic down-turn may jeopardize the financial capacity of customers to purchase, hence, subjecting business stakeholders to massive losses (Nagel 7).
Works Cited
Nagel, B. W. "The impact op power and dependence in Buyer-Supplier Relationships on the use of electronic reverse auctions. En empirical study among public an private sector procurement professionals in the Netherlands." (2014).
Pacific Oil Company Case 2. Petrolium Supply Contracts: A Technical Note. Print
