10 Negotiation Situations Examples: How to Negotiate Effectively in Business

Negotiation is a skill that can help you achieve your goals, resolve conflicts, and build better relationships in business. Negotiation involves communicating with others, exchanging information, making proposals, and reaching agreements. In this article, we will look at 10 negotiation situations examples from different domains and industries, and analyze the strategies and techniques used by the negotiators.

Key Takeaways

Negotiation is a skill that can help you achieve your goals, resolve conflicts, and build better relationships in business.

Negotiation involves communicating with others, exchanging information, making proposals, and reaching agreements.

Negotiation requires preparation, research, strategy, tactics, and skills.

Negotiation can be applied to various situations and domains in business.

Negotiation can be improved by learning from examples, experts, and feedback.

1. Disney’s Purchase of Lucasfilm

In 2013, Disney acquired Lucasfilm, the company behind the Star Wars franchise, for $4.05 billion. The deal was the result of a two-year negotiation between Disney’s CEO Robert Iger and Lucasfilm’s founder George Lucas. The negotiation was based on trust and relationship building, as Iger and Lucas shared a common vision for the future of Star Wars and respected each other’s creative input. The deal also involved a mix of cash and stock, which allowed Lucas to benefit from Disney’s growth and diversify his portfolio.

2. U.S. Women’s Hockey and Soccer Teams

In 2017, the U.S. national women’s hockey and soccer teams successfully negotiated new labor contracts with their respective federations, after years of working for low pay and poor conditions. The hockey team used a threat of boycott to gain leverage and public support, while the soccer team used a lawsuit to challenge the pay gap with the men’s team. Both teams also collaborated with each other and other female athletes to create a united front and increase their bargaining power.

3. Starbucks and Kraft Foods

In 2013, Starbucks was ordered to pay Kraft Foods $2.75 billion in damages for breaching a contract that gave Kraft the exclusive right to distribute Starbucks packaged coffee in grocery stores. The dispute started in 2010, when Starbucks tried to terminate the contract early, claiming that Kraft had failed to meet its obligations. Kraft refused to accept the termination and demanded arbitration. The arbitrator ruled in favor of Kraft, finding that Starbucks had violated the contract and owed Kraft a hefty compensation.

4. Apple and Samsung

In 2012, Apple won a landmark patent infringement case against Samsung, which was accused of copying Apple’s iPhone design and features. A jury awarded Apple more than $1 billion in damages, which was later reduced to $600 million by a judge. In 2013, another jury awarded Apple an additional $290 million for the amount overruled by the judge. The case was one of the most expensive and complex legal battles in the history of technology, involving dozens of patents, hundreds of witnesses, and millions of documents.

5. Simon & Schuster versus Barnes & Noble

In 2013, Simon & Schuster, one of the largest publishers in the U.S., had a standoff with Barnes & Noble, one of the largest booksellers in the U.S., over the terms of their distribution agreement. Barnes & Noble tried to gain leverage by cutting its orders of Simon & Schuster titles, refusing to promote them in its stores, and canceling author events. Simon & Schuster resisted Barnes & Noble’s demands for higher discounts and more marketing support. The conflict lasted for several months, hurting both parties’ sales and reputation.

6. Robin Thicke versus Marvin Gaye’s Family

In 2013, Robin Thicke and his co-writers Pharrell Williams and T.I. sued Marvin Gaye’s family for declaratory relief, seeking to prove that their hit song “Blurred Lines” did not infringe on Gaye’s song “Got to Give It Up”. Gaye’s family countersued for copyright infringement, claiming that “Blurred Lines” copied the rhythm, melody, harmony, and lyrics of “Got to Give It Up”. In 2015, a jury sided with Gaye’s family and awarded them $7.4 million in damages.

7. New York City Teachers’ Union versus Mayor Bloomberg

In 2012, New York City failed to reach an agreement with its teachers’ union on a new evaluation system that would link teacher performance to student test scores. The city stood to lose $450 million in state aid and grants if it did not implement the system by a deadline set by the state government. However, the negotiations broke down over issues such as how much weight to give to test scores, how to measure student growth, and how to handle appeals from teachers who received low ratings.

8. Mortgage Foreclosure Settlement

In 2012, after months of negotiations, the attorneys general of 49 states and the Obama administration reached a settlement with five of the largest banks in the U.S., aimed at providing relief to homeowners who suffered from foreclosure abuses during the housing crisis. The settlement required the banks to pay $25 billion in fines and restitution, modify loans for distressed borrowers, reduce principal balances for underwater homeowners, and follow new standards for mortgage servicing.

9. Negotiating a Salary Increase

Negotiating a salary increase with your current employer can be challenging, especially if you are not sure how to justify your request, how to handle objections, and how to avoid damaging your relationship. To prepare for this negotiation, you should research the market value of your skills and experience, document your achievements and contributions, and set a realistic and flexible goal. During the negotiation, you should present your case confidently and respectfully, emphasize the value you bring to the organization, and be ready to compromise and collaborate.

10. Negotiating a Freelance Contract

Negotiating a freelance contract with a client can be tricky, especially if you are not familiar with the scope and expectations of the project, the payment terms and methods, and the legal implications and protections. To prepare for this negotiation, you should clarify your goals and priorities, estimate your costs and fees, and draft a proposal that outlines the deliverables, timeline, and budget. During the negotiation, you should communicate clearly and professionally, address any concerns or questions, and negotiate for the best possible deal.

Tips

Negotiation is not a zero-sum game. Try to find win-win solutions that benefit both parties.

Negotiation is not a one-time event. Try to build long-term relationships that foster trust and cooperation.

Negotiation is not a one-way street. Try to understand the other party’s perspective, needs, and concerns.

Negotiation is not a solo act. Try to involve others who can support your case or offer insights.

Negotiation is not a static process. Try to adapt to changing circumstances and new information.

Negotiation Situations Examples: How They Affect Global Demand in the Industry

Negotiation is a vital skill for any professional, especially in the industry of __ (fill in the blank with your industry). Negotiation can help you achieve your goals, resolve conflicts, and create value for yourself and others. But how do negotiation situations affect the global demand in the industry? Here are some examples of how negotiation can increase or decrease the demand for products or services in different contexts.

Example 1: Negotiating with Customers

One of the most common negotiation situations is when you have to negotiate with customers over the price and terms of a sale. This can have a significant impact on the global demand for your products or services, depending on how you approach the negotiation. For instance, if you use a win-win strategy that focuses on creating value for both parties, you can increase customer satisfaction, loyalty, and referrals, which can boost the demand for your offerings. On the other hand, if you use a win-lose strategy that focuses on claiming value for yourself at the expense of the customer, you can damage your reputation, lose customers, and reduce the demand for your offerings.

Example 2: Negotiating with Suppliers

Another common negotiation situation is when you have to negotiate with suppliers over the quality, quantity, and delivery of goods or services. This can also affect the global demand for your products or services, depending on how you manage the relationship with your suppliers. For example, if you build trust and cooperation with your suppliers, you can ensure a steady supply of high-quality inputs, which can enhance your productivity, efficiency, and competitiveness, which can increase the demand for your products or services. Conversely, if you create distrust and conflict with your suppliers, you can face supply disruptions, quality issues, and higher costs, which can harm your performance, profitability, and competitiveness, which can decrease the demand for your products or services.

Example 3: Negotiating with Competitors

A less common but still important negotiation situation is when you have to negotiate with competitors over market share, pricing, or innovation. This can have a major impact on the global demand for your products or services, depending on how you balance competition and collaboration with your rivals. For instance, if you engage in cooperative negotiation with your competitors, you can find ways to expand the market size, differentiate your offerings, or create new solutions that benefit both parties and customers, which can increase the demand for your products or services. Alternatively, if you engage in competitive negotiation with your competitors, you can find ways to capture more market share, lower your prices, or copy their innovations that benefit yourself but hurt both parties and customers, which can decrease the demand for your products or services.

Negotiation is not only a skill for achieving individual outcomes but also a factor that influences global outcomes. As these examples show, negotiation situations can have positive or negative effects on the global demand in the industry of __ (fill in the blank with your industry), depending on how you negotiate. Therefore, it is important to develop effective negotiation skills that can help you create value for yourself and others in different contexts.

Frequently Asked Questions

Q: What are the benefits of negotiation in business?
A: Negotiation in business can help you achieve your goals, resolve conflicts, create value, build trust, and improve relationships.

Q: What are the key skills for negotiation in business?
A: Some of the key skills for negotiation in business are communication, listening, persuasion, problem-solving, creativity, and emotional intelligence.

Q: What are the common mistakes in negotiation in business?
A: Some of the common mistakes in negotiation in business are failing to prepare, making unrealistic demands, focusing on positions rather than interests, ignoring alternatives, and giving up too easily.

Q: What are the best practices for negotiation in business?
A: Some of the best practices for negotiation in business are doing your homework, setting clear objectives, exploring options, seeking mutual gains, being respectful, and following up.

Q: How can I improve my negotiation skills in business?
A: You can improve your negotiation skills in business by learning from experts, reading books and articles, taking courses and workshops, practicing with peers or mentors, and seeking feedback.

References:

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

http://www.psych.nyu.edu/gollwitzer/771.pdf

http://psych.cf.ac.uk/home2/manstead/Van%20Kleef%20et%20al.%20%282006b%29.pdf

https://www.pon.harvard.edu/daily/negotiation-skills-daily/famous-negotiators-feature-in-top-negotiations-of-2012/

https://www.pon.harvard.edu/daily/business-negotiations/these-examples-illustrate-the-importance-of-negotiation-in-business/

https://www.thebalancemoney.com/negotiation-skills-list-2063760

https://www.wikijob.co.uk/interview-advice/competencies/negotiation-skills