Scribd Logo
Upload

Welcome to Scribd!

  • 2K views

    Texoil Analysis

    Uploaded by

    Anurag Rakshit
    1) The negotiation simulation involved the sale of a gas station property from the station owner to Texoil. 2) The final negotiated sale price was $500,000 plus a 10% royalty on sales at the station and mini mart for two years, up to an additional $100,000 for the station owner. 3) Although the station owner's goal was $553,000, they viewed the outcome as satisfactory given their need to sell promptly and that it was above their alternative of $400,000. The added royalty fees could also help reach the original goal.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Texoil Analysis

    Uploaded by

    Anurag Rakshit
    2K views3 pages
    1) The negotiation simulation involved the sale of a gas station property from the station owner to Texoil. 2) The final negotiated sale price was $500,000 plus a 10% royalty on sales at the station and mini mart for two years, up to an additional $100,000 for the station owner. 3) Although the station owner's goal was $553,000, they viewed the outcome as satisfactory given their need to sell promptly and that it was above their alternative of $400,000. The added royalty fees could also help reach the original goal.

    Original Description:

    Texoil Negotiation

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1) The negotiation simulation involved the sale of a gas station property from the station owner to Texoil. 2) The final negotiated sale price was $500,000 plus a 10% royalty on sales at the station and mini mart for two years, up to an additional $100,000 for the station owner. 3) Although the station owner's goal was $553,000, they viewed the outcome as satisfactory given their need to sell promptly and that it was above their alternative of $400,000. The added royalty fees could also help reach the original goal.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2K views3 pages

    Texoil Analysis

    Uploaded by

    Anurag Rakshit
    1) The negotiation simulation involved the sale of a gas station property from the station owner to Texoil. 2) The final negotiated sale price was $500,000 plus a 10% royalty on sales at the station and mini mart for two years, up to an additional $100,000 for the station owner. 3) Although the station owner's goal was $553,000, they viewed the outcome as satisfactory given their need to sell promptly and that it was above their alternative of $400,000. The added royalty fees could also help reach the original goal.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 3

    !

    Prof Gavin Kilduff

    Negotiations and Consensus Building

    Anurag Rakshit

    19 April 2017

    Post-Negotiation Analysis for Texoil Case.

    For this negotiation exercise, I played the role of the Station Owner. I think the

    negotiation outcome was generally positive and provided me with a lot of valuable insights about

    the importance of emotional appeals in a negotiation dialogue. The sale of the station was agreed

    upon at a maximum negotiated price of $500,000 pre tax. Texoil has also agreed to pay a 10%

    royalty fee on all their sales at the service station and the mini mart for the first two years.

    However maximum compensation arising from this deal is capped at US 100,000. Even though

    the goal was to achieve a sale amount of $553,000, I believe that with due to Kevins hard

    negotiation tactics and given my urgent need to conduct the sale of the station, it is a satisfactory

    amount as it is still way over my BATNA which is $400,000. Plus, the added royalty fees should

    also allow me to get closer to my goal amount, while retaining a small amount of future cash

    flow.

    My initial strategy was to not hold an aggressive stance since I my spouse was having

    medical issues and my need to sell the property soon superseded my need to make significant a

    profit at the cost of bluffingwhich would increase the risk of having Texoil walk away from
    !2

    the table. Based on this, I started off by explaining why I needed to sell the property prior to

    engaging in

    negotiating any particular terms. Kevin, who was playing the Texoil representative, was very

    astute in assessing my weakness and indicated that he might use that to his advantage. I decided

    to build rapport with him first, so that a personal relationship would make it harder for him to

    present me with a lowball offer. We spent a good portion of the time just talking about the

    business and what me and my spouse would do after retirement, while I tried to capture his

    sympathy by stressing on our dire need to take a break from the Gas Station business. He showed

    positive signs of sympathy towards my situation and proceeded to explain to me his plans on

    building a mini mart on the property to maximize their profit potential.

    After this we went on to begin the actual negotiations. Kevin went first by offering me

    and my spouse a sum of $400,000. This was a surprise to me since I thought we were on the

    same page about the valuation of the property and its future profit potential in the area, however I

    chose not to overreact to this offer and try to understand why he chose the figure so that I can

    understand his reservations about what the appropriate price should be. Based on the discussion

    that followedI deduced that this is because his reservation price is lower than what I might

    have been expecting and the number itself is simply an arbitrary offer motivated by the need to

    report a successful deal to his higher ups at Texoil. This inference made me reveal that we had a

    alternative offer at the table but also state clearly that due to our existing relationship we are

    much more inclined to sell the station to Texoil, instead of an outside party. This resulted in a

    significant rise in his offer to $500,000. While a big jump from the initial amount, this was still
    !3

    lower than my goal of $553,000, so I expressed my concern and proceeded to counter his offer.

    But before I could name an alternative price he indicated that he was not willing to go north of

    the $500,000 figure adamantly. This caused me to switch strategies and ask for some other form

    of compensation instead, which in my case was royalties from the future sale of goods at the

    station. He seemed interested in the idea and we both arrived at a final number of 10% in royalty

    fees over two years with a cap at $100,000. At this point I saw no further room to negotiated and

    decided to shake hands on the deal. Before we signed the agreement, Kevin also insisted that I

    sign a Non-disclosure Agreement about the terms of our deal as he was worried that other

    perspective business partners could potentially use the information to their advantage. I was

    happy to sign the document.

    In the end, what I really learned from this exercise was that revealing your personal

    disadvantage allows the other party to build trust and rapport, and it paves the way for a

    healthier, much forthcoming negotiations.

    You might also like