Case study 2: Two suppliers X and Y provide your company with critical supplies of starting materials for the manufacturing of a product Z. Last year, you managed through the tender system to procure an engine from supplier X with a dream price equal to 400,000 USD. While you recognize that this price was significantly discounted, you cast doubt over the possibility to replicate that this year as you recently have announced another bid for both suppliers about the need for another similar engine. You discover that you can easily build from scratch that same engineer with a cost equal to 450,000 USD. At the same you managed to know informally that the both suppliers are willing to submit separately an offer with at least 50%, increase the price you had last year due to materials prices mark up in the market. You also know that suppliers X is in great need of this deal this year as it was a stagnant market with no other buyers for 7 months. Supplier Y and X also prefer cash as they had cash flow issues which you can provide for this tender.

Answer all the following:

1- What would be your negotiations strategy? Why?

2- What are your expectations about the negotiations styles from supplier X and Y?

3- What is BATNA for suppliers X and Y

4- What is BATNA for your company?