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Case 3.1 a Scandinavian Scare

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CASE 3.1 A SCANDINAVIAN SCARE

Discussion Questions

1. Why did Conquip send an RFQ with a 10 percent price-reduction requirement rather than calling de Winter in for negotiation? Is there any downside to having run the negotiation this way?
Conquip was trying to give a time pressure to FD. This can be seen when Conquip sent the RFP (Request for Quote) to FD regarding the product, LEIF filter, which still not even widely adopted by Conquip. This particular pressure functions as an external constraint to FD. Conceptually, the constraint removes what could be the most attractive of options for FD to continue to negotiate in an effort to improve the terms of the agreement. Lacking this option leads FD to face with a twofold choice which they can either agree or refuse the agreement requested by Conquip.

This could appear like a great strategy until Conquip realise that there's no difference between that and FD might also putting on time pressure to them. There could be a situation in which both sides are approaching the same time deadline. And in this particular case, the one that has the greatest power is the one with more alternatives who could use time pressure, but the side with fewer alternatives has the least power should avoid time pressure and negotiate well before the deadline.

2. At the first negotiation meeting, Conquip made a threat disguised within an offer. The offer was to retain FD as a companywide, primary supplier if FD could meet its price demands.
A. What was the threat embedded in this offer?
De Winter was suspicious of this offer because of the close relationship between Conquip and FF. He noticed that although Conquip requested for the quotation, but many of FD’s high-volume products were noticeably missing from the RFQ. This has made de Winter more doubtful as he believed that Conquip just wanted quotes from FD on products that

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