7 Business Negotiation Examples You Can Learn From

Business negotiation is a skill that can help you achieve your goals, resolve conflicts, and build better relationships. Whether you are negotiating with customers, suppliers, employees, or investors, you need to know how to communicate effectively and persuasively. Here are some business negotiation examples from various industries and contexts that can inspire you to improve your own negotiation skills.

Key Takeaways

Business negotiation is a skill that can help you achieve your goals, resolve conflicts, and build better relationships.

Business negotiation examples from various industries and contexts can inspire you to improve your own negotiation skills.

Business negotiation requires clear and enforceable contracts, amicable dispute resolution, balanced competitive and cooperative interests, respect for intellectual property rights, and effective communication and persuasion skills.

1. Starbucks and Kraft Foods: How to Avoid Costly Arbitration

In 2010, Starbucks decided to end its 12-year partnership with Kraft Foods, which distributed its packaged coffee to grocery stores. Starbucks claimed that Kraft had breached the contract by mismanaging the brand and failing to meet sales targets. Kraft denied the allegations and demanded fair compensation for the termination of the deal. The dispute escalated to arbitration, where a third-party judge ruled in favor of Kraft and ordered Starbucks to pay $2.75 billion in damages. This case shows the importance of having clear and enforceable contracts, as well as trying to resolve disputes amicably before resorting to arbitration, which can be expensive and unpredictable.

2. Apple and Samsung: How to Manage a Complex Relationship

Apple and Samsung have been involved in a long-running patent war over their smartphone and tablet designs. The two tech giants have sued each other in multiple countries, seeking injunctions, damages, and royalties. However, they also have a symbiotic relationship, as Samsung is one of Apple’s largest suppliers of components. The two companies have tried to balance their competitive and cooperative interests by reducing the number of contentious patents, engaging in settlement talks, and focusing on innovation. This case illustrates the challenges and opportunities of negotiating in a complex and dynamic environment, where parties have both conflicting and complementary goals.

3. Simon & Schuster and Barnes & Noble: How to Use Leverage Wisely

In 2013, Simon & Schuster, one of the largest publishers in the US, faced a standoff with Barnes & Noble, the largest bookstore chain in the country. The two sides disagreed over the terms of their distribution agreement, such as pricing, promotion, and shelf space. Barnes & Noble tried to gain leverage by cutting orders of Simon & Schuster titles and limiting their exposure in stores. Simon & Schuster responded by withholding advertising support and author events. The conflict hurt both parties’ sales and reputation, until they reached a new deal later that year. This case demonstrates the risks of using hardball tactics that can damage the relationship and trust between negotiators, as well as the benefits of finding mutually beneficial solutions.

4. Robin Thicke and Marvin Gaye’s Family: How to Avoid Litigation

In 2013, Robin Thicke, Pharrell Williams, and T.I., the co-writers of the hit song “Blurred Lines”, filed a preemptive lawsuit against Marvin Gaye’s family, seeking a declaration that their song did not infringe on Gaye’s 1977 song “Got to Give It Up”. Gaye’s family counter-sued, claiming that “Blurred Lines” copied the rhythm, melody, harmony, and lyrics of Gaye’s song. The case went to trial, where a jury found Thicke and Williams liable for copyright infringement and awarded Gaye’s family $7.4 million in damages. The verdict was later reduced to $5.3 million on appeal, but the case is still ongoing. This case highlights the costs and uncertainties of litigation, as well as the importance of respecting intellectual property rights.

Tips

Use positive language and tone to create a cooperative atmosphere.

Ask open-ended questions to elicit information and preferences from the other party.

Use silence strategically to let the other party speak or think.

Use anchoring techniques to set high but realistic expectations.

Use concessions wisely to create value and reciprocity.

Use framing techniques to highlight benefits and minimize drawbacks.

Use social proof and testimonials to enhance credibility and trust.

Use deadlines and scarcity to create urgency and motivation.

Business Negotiation Examples and Their Impact on Global Demand

Business negotiation is a process of reaching a mutually beneficial agreement between two or more parties, often involving trade-offs, concessions, and compromises. Business negotiation can have a significant impact on the global demand for products and services, as it can affect the price, quality, quantity, delivery, and reputation of the parties involved. In this report, we will examine three examples of business negotiation in different industries and analyze how they influenced the global demand in their respective markets.

Starbucks vs. Kraft Foods: A Billion-Dollar Dispute over Coffee Distribution

One of the most expensive business disputes in recent history involved Starbucks and Kraft Foods over the distribution of Starbucks packaged coffee in grocery stores. The conflict began in 2010, when Starbucks accused Kraft of breaching their 12-year contract by mismanaging the brand, failing to meet sales targets, and undermining Starbucks’ pricing strategy. Starbucks wanted to terminate the contract and take back the distribution rights, but Kraft refused to accept the termination and demanded fair compensation for its investments and lost profits.

The dispute escalated to arbitration, where a panel of three judges ruled in favor of Kraft in 2013. The arbitrators ordered Starbucks to pay Kraft $2.75 billion in damages, which was one of the largest arbitration awards ever. The award included $527 million in pre-judgment interest and $985 million in attorney fees.

The outcome of this negotiation had a significant impact on the global demand for coffee, as it affected the market share, profitability, and reputation of both companies. Starbucks had to take a huge hit on its earnings and cash flow, which reduced its ability to invest in new products, markets, and innovations. Kraft, on the other hand, gained a substantial amount of cash that it used to spin off its grocery business and focus on its global snacks division. The dispute also damaged the relationship between the two companies, which had been partners for more than a decade. The customers who were loyal to both brands were also affected by the change in distribution channels, availability, and prices.

Apple vs. Samsung: A Patent War over Smartphone Technology

Another example of a high-stakes business negotiation involved Apple and Samsung over the patent infringement of smartphone technology. The conflict started in 2011, when Apple sued Samsung for copying the design and features of its iPhone and iPad products. Samsung countersued Apple for violating its wireless transmission patents. The two companies engaged in a series of lawsuits across multiple countries, involving billions of dollars in damages and injunctions.

The negotiation between Apple and Samsung was complex and challenging, as it involved not only legal issues but also strategic, competitive, and relational factors. The two companies were both rivals and partners, as Samsung was one of Apple’s largest suppliers of components. The two companies also had different cultures, values, and styles of negotiation, which made it difficult to find common ground and trust.

The negotiation between Apple and Samsung had a significant impact on the global demand for smartphones, as it affected the innovation, competition, and consumer choice in the market. The patent war forced both companies to invest heavily in research and development, legal fees, and marketing campaigns, which increased their costs and reduced their profits. The patent war also created uncertainty and confusion among consumers, who faced the risk of buying products that could be banned or modified due to legal rulings. The patent war also influenced the behavior of other players in the industry, such as Google, Microsoft, Nokia, and Huawei, who had to adapt to the changing dynamics and opportunities in the market.

Simon & Schuster vs. Barnes & Noble: A Hardball Negotiation over Book Sales

A third example of a business negotiation involved Simon & Schuster and Barnes & Noble over the sales of books in physical stores. The conflict arose in 2013, when Barnes & Noble tried to gain more leverage by reducing its orders of Simon & Schuster titles and refusing to book its authors for in-store events. Barnes & Noble claimed that Simon & Schuster was not offering enough discounts, co-op payments, and marketing support for its books. Simon & Schuster argued that Barnes & Noble was using unfair tactics to pressure it into accepting unfavorable terms.

The negotiation between Simon & Schuster and Barnes & Noble was tense and hostile, as both parties used hardball tactics to assert their power and interests. Barnes & Noble threatened to cut off Simon & Schuster’s access to its large customer base and shelf space, which could hurt its sales and visibility. Simon & Schuster resisted Barnes & Noble’s demands and tried to appeal to its authors, readers, and other retailers for support.

The outcome of this negotiation had a significant impact on the global demand for books, as it affected the availability, diversity, and quality of books in the market. Barnes & Noble’s actions reduced the exposure and revenue of Simon & Schuster’s books, which could affect its ability to invest in new authors, genres, and formats. Simon & Schuster’s actions increased the competition and cooperation among other publishers and retailers, who could benefit from the gap created by Barnes & Schuster. The customers who were fans of Simon & Schuster’s books were also affected by the limited access and choice they had in Barnes & Noble’s stores.

These examples illustrate how business negotiation can have a significant impact on the global demand for products and services in different industries. Business negotiation can affect the price, quality, quantity, delivery, and reputation of the products and services, as well as the costs, profits, and relationships of the parties involved. Business negotiation can also influence the innovation, competition, and consumer choice in the market, as well as the behavior and opportunities of other players in the industry. Therefore, business negotiation is a critical skill and process that requires careful preparation, analysis, communication, and collaboration.

Frequently Asked Questions

Q: What are some common types of business negotiation?
A: Some common types of business negotiation are sales negotiation, contract negotiation, salary negotiation, partnership negotiation, and merger and acquisition negotiation.

Q: What are some key skills for successful business negotiation?
A: Some key skills for successful business negotiation are preparation, active listening, rapport building, problem solving, creativity, persuasion, and emotional intelligence.

Q: What are some best practices for business negotiation?
A: Some best practices for business negotiation are setting realistic and measurable goals, researching the other party’s interests and alternatives, exploring options for mutual gain, using objective criteria to evaluate offers, being flexible and open-minded, avoiding ultimatums and threats, focusing on interests rather than positions, communicating clearly and respectfully, managing emotions and conflicts, documenting agreements and commitments.

Reference:

https://deepblue.lib.umich.edu/bitstream/2027.42/26263/1/0000344.pdf

https://calhoun.nps.edu/bitstream/10945/40295/6/thomas_conflict_1992.pdf

https://web.archive.org/web/20070926065715/http://home.medewerker.uva.nl/g.a.vankleef/bestanden/Van%20Kleef%20et%20al.%20(2004a%20JPSP).pdf