Case Study #2

Going A Long Way to Make a Deal Based on an interview with Howard Sheer

Source: Weiss, J. (2020). The Book of Real-World Negotiations. John Wiley & Sons, Inc.: New Jersey, USA.

The Conflict The company, called Ecru, is a small clothing company based in New York City. Ecrus CEO, Howard Sheer, led the negotiations with a potentially new supplier based in India, called Indegopro. Sheer began looking to India as more and more unfavorable changes were taking place in China where his previous supplier base existed. Indegopro was a large factory group based primarily in India with facilities in other countries. Sheer very much wanted to work with Indegopro for a multitude of reasons, but he feared that they held all the cards in the negotiation, and it would be a difficult process to meet his goals and make the deal profitable for the much smaller Ecru. Sheer came to know about Endegopro through other textile mills he was working with on related projects. Sheer did his due diligence and investigated Indegopro thoroughly. As he did, he found that they served small entities similar to Ecru, but also big department stores like Gap and Banana Republic. He also found that Endegopro had a great track record of working with all the different stores. Their quality, value, and public relations all checked out. Ecru managed to engage Indegopro on one order, and Sheer was very happy with how they performed. The terms under which that first deal was done, however, were not at all ideal for Ecru. They were working under a Letter of Credit (LC), which they could manage, but LCs tend to be expensive, and Ecru did not have the ability to engage this way in the future. Ecru needed to the ability to finance the business, and the bank would only issue a limited number of LCs. Sheer also knew that in Indian culture, having a strong relationship mattered a great deal when it came to doing business. That previous arrangement (one order) did not help in establishing a strong relationship with Endogopro. Sheers challenge was that Ecru was tiny in comparison with the other companies that partnered with Endogopro. How would he find a way to show Endogopro his seriousness and commitment to build a productive and lasting relationship with them? How would he persuade Endogopro that doing business with Ecru was worthwhile to them?

question 1.

a. Identify the key problems and issues in the case study. b. Formulate a thesis statement, summarizing the problems and issues you have identified in 1-2 sentences.