哈佛经典谈判模拟-旅馆搬迁谈判案例

Background information: Hotel Sale
The buyer: Wilson
1. Background
The company Wilson worked for was a construction contractor that had a high engineering quality and good reputation, thus it was a very famous constructor in local area. Recently, the company had contracted some projects of office buildings. These projects had very limited time and should be located in the downtown with convenient traffic. However, there was no empty space in the downtown for such projects unless somebody was willing to remove from here. Through private channel, they heard that a hotel called as Elmutel with the intention to remove and the site of such hotel was just suitable for the site requirement of Wilson’s company. The board of directors of the company immediately decided to dispatch Wilson to negotiate about this transaction, because he was an old hand with rich experience in negotiation.
2. Negotiation Preparation
Firstly, Wilson had market research in order to confirm his own bid and the possible offer of the opposite. Firstly, he thought how much the hotel could get if it was openly auctioned in the market. After investigating the sales prices of the areas nearby and consulting the local real estate brokers, he found that the open sales price of the hotel was USD 110,000---USD145,000. However, via other channels, he knew that the hotel had no such idea of open sale. He was told that this was mainly a financial issue, such as new site fee, removal fee, etc. If the hotel could not sell at a good price, it would not remove easily. After consulting the estate brokers of the areas nearby, he estimated that the offer of seller might be between USD250,000 and 450,000. According to the financial strength of the company and considering that there were another two companies interested in this site, Wilson finally determined his lowest price could not be more than USD350,000.
The seller: Steve
1. Background
Elmutel Hotel mainly served young students at the age of 18-25. The characteristic of this colony was that they had low payment ability but paid attention to living environment. However, the current place where the hotel was located could not meet the requirements of its service objects, because it was located in the downtown of an industrial city and close to the traffic center of the city. Therefore, the hotel had to consider removing out of this city and finding another calm site, but problem came that the hotel currently had no such financial ability to pay such large removal fees.
Several months later, a person called Wilson came to the hotel. He was the representative of a local constructor that wanted to buy the hotel. The manager of the hotel had never thought to sell the hotel. If the price was suitable, this was a suggestion worthy of being considered. Whereupon, the manager suggested the board of directors of the hotel and then the board determined to negotiate with Wilson for this matter.
2. Negotiation Preparation
Firstly, Steve had an investigation into the financial status and credit standing of the company Wilson worked for. He found that the company had high credit standing and trustable payment competence. In order to get well prepared for such negotiation, Steve made out a specific negotiation preparation plan.
Steve spent two weeks on researches and investigations before negotiation. Firstly, he must check the lowest price of the opposite, i.e. the bottom line price, which depended on whether a proper removal site could be found. Via investigation, there were two places worthy of being considered, one was Medford, which would cost USD 175,000, and the other was Alston, which would cost more than the former, up to USD 235,000 due to many aspects such as environment etc better than those of the former. Plus removal fees, decoration fees, insurance premiums and other incidental expenses, it would spend at least USD220,000 on the removal to Medford while at least USD275,000 to Alston. According to the above investigations, Steve decided the lowest sales price to be at least USD220,000. Of course, if negotiation ran smoothly, higher price would have for the hotel, then there would be sufficient fund to buy Alston.
The second thing Steve did was market research, i.e. to understand that how much it would sell if the hotel was openly auctioned in the market. After investigating the sales prices of the areas nearby and consulting the local real estate brokers, he found disappointedly that the hotel only cost USD125,000. At last, Steve needed to estimate the offer of Wilson. The offer of the opposite greatly depended on the intention of the developer and how tall was allowed for the buildings to be constructed on such site and whether they wanted to buy other sites. After consulting the local contractors, Steve estimated that the offer of Wilson might be between USD275,000 and 475,000.
3. Requirements on Negotiation
Four students form one negotiation team, in which, two students represent the seller while the other two represent the buyer. After carefully reading the background information of the party they respectively represent, partners have clear staffing and discuss tactics. Please prepare for the negotiation
The negotiation period is 8 minutes. The following several points are for reference purpose:
(1) Do you want to achieve a win-win result? If so, what are you going to do?
(2) Analyze the benefits of negotiator parties and find the common benefit or complementary benefit of parties.
(3) Determine the primary bid and bottom line price of the opposite.
(4) If the negotiation with the opposite is at a stand, do you plan to consider other proposals or choices?
What are other proposals or choices?。