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Seltek Nego Plan

In: Business and Management

Submitted By sryu84
Words 497
Pages 2
What issues are the issues in the negotiation? Quantify their value to you.

* Seltek is in desperate situation. They are barely making break even, and want to walk away from this business as soon as possible. * May rebuild the building, but it will require 3M investment and 6months of time. * Patent also can be sold separately. (European company wants to buy it at $4M)

What are your sources of power (and how might your opponent neutralize them)?

* Appraisal price is much higher than what we are intended to receive.
=> They will still want to acquire the plant at the low price . * Biopharm do not have any genetically engineered product.
=> Biopharm also want to emphasize that if they do not buy the patent, then patent will value $0. * Having skilled worker for existing facilities.
=> Job market is good, so Biopharm can say hiring workers will not be a problem.

What is your BATNA?

* Reject the deal, and rebuild the plant for general manufacturing.

Reservation price?

* $11.7M($7M + $4M + $0.5M+$0.2M)

Target price?

* $30M
=> $20.7M ($16M+$4M+$0.5M+$0.2M) + Product development cost spent + all registration fee paid + Time value of money that Biopharm can save from acquiring the plant “turn key”

What issues are most important to your opponent? How does your opponent value them?

* They can produce the genetically engineered product.

What are your opponent's sources of power (and how can you neutralize them)?

* They probably already know that they are the only possible buyer without rebuilding.
=> We have to emphasize that we still can rebuild it and sell it at the higher price than they offered. * Patent value nothing if Seltek do not produce it.
=> We can reveal there is potential buyer for the patent, and emphasize that they will have to search for...

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