Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. Frontier Services Group: Building a Pan-African Logistics Provider (A) case study is a Harvard Business School (HBR) case study written by Hau L. Lee, Laurent De Clara. The Frontier Services Group: Building a Pan-African Logistics Provider (A) (referred as “Fsg Logistics” from here on) case study provides evaluation & decision scenario in field of Strategy & Execution. It also touches upon business topics such as - negotiation strategy , negotiation framework, Emerging markets, Growth strategy, Innovation, Marketing, Supply chain.
Negotiation strategy solution for case study Frontier Services Group: Building a Pan-African Logistics Provider (A) ” provides a comprehensive framework to analyse all issues at hand and reach a unambiguous negotiated agreement. At Oak Spring University, we provide comprehensive negotiation strategies that have proven their worth both in the academic sphere and corporate world.
What’s my BATNA (Best Alternative To a Negotiated Agreement) – my walkaway option if the deal fails?
What are my most important interests, in ranked order?
What is the other side’s BATNA, and what are his interests?
In June 2015, Peter Phillips, Chief Operating Officer of Frontier Services Group (FSG), was preparing an update for the board on how operations would support the company's new strategy. Given the ongoing decline in the price of oil and the extractive industries, the outlook had changed for FSG. His aim was to steer a new course to becoming the leading pan-African logistics provider. Founded in March 2014 by Erik Prince, a former U.S. Navy Seal and ex-CEO of Blackwater, a private security firm, FSG was a logistics and transportation company listed on the Hong Kong Stock Exchange, with a market capitalization in excess of $200 million. Headquartered in Nairobi, Kenya, the company employed more than 340 staff in its head office and regional subsidiaries in Hong Kong, Beijing, Dubai, and Malta. In addition to traditional logistics solutions like transporting personnel, materials, supplies, and humanitarian aid, FSG provided civil engineering and support services such as in-house construction, facilities management, and workforce accommodation. Its mission was to build and maintain the infrastructure, installations and platforms its client organizations required to operate in Africa. Although the new approach would open up significant growth opportunities, a number of operational challenges remained. The lack of trained and skilled labor in Africa, coupled with the limited competence of the logistics sector would, if not addressed, impede the future growth of the company. The case traces the evolution of FSG since its inception in 2014 as a Kenyan air charter and freight services company. It offers an overview of the company's recent development and current strategy, notably how it handles the logistics needs of customers across the vast and very diverse African continent.
By interests, we do not mean the preconceived demands or positions that you or the other party may have, but rather the underlying needs, aims, fears, and concerns that shape what you want. Negotiation is more than getting what you want. It is not winning at all cost. Number of times Win-Win is better option that outright winning or getting what you want.
Options are the solutions you generate that could meet your and your counterpart’s interests . Often people come to negotiations with very fixed ideas and things they want to achieve. This strategy leaves unexplored options which might be even better than the one that one party wanted to achieve. So always try to provide as many options as possible during the negotiation process . The best outcome should be out of many options rather than few options.
When soft bargainers meet hard bargainers there is always the danger of soft bargainers ceding more than what is necessary. To avoid this scenario you should always focus on legitimate standards or expectations, clearly understanding the arbitrage . Standards are often external and objective measures to assess the fairness such as rules and regulations, financial values & resources , market prices etc. If the negotiated agreement is going beyond the industry norms or established standards of fairness then it is prudent to get out of the negotiation.
Every negotiators going into the negotiations should always work out the “what if” scenario. The negotiating parties in the “Frontier Services Group: Building a Pan-African Logistics Provider (A)” has three to four plausible scenarios. The negotiating protagonist needs to have clear idea of – what will happen if the negotiations fail. To put it in the negotiating literature – BATNA - Best Alternative to a Negotiated Agreement. If the negotiated agreement is not better than BATNA (Negotiations options), then there is no point in accepting the negotiated solution.
One of the biggest problems in implementing the negotiated agreements in corporate world is – the ambiguity in the negotiated agreement. Sometimes the negotiated agreements are not realistic or various parties interpret the outcomes based on their understanding of the situation. It is critical to do negotiations as water tight as possible so that there is less scope for ambiguity.
Many negotiators make the mistake of focusing only on the substance of the negotiation (interests, options, standards, and so on). How you communicate about that substance, however, can make all the difference. The language you use and the way that you build understanding, jointly solve problems, and together determine the process of the negotiation with your counterpart make your negotiation more efficient, yield clear agreements that each party understands, and help you build better relationships.
Another critical factor in the success of your negotiation is how you manage your relationship with your counterpart and other people doing the mediation. According to “Hau L. Lee, Laurent De Clara”, the protagonist may want to establish a new connection or repair a damaged one; in any case, you want to build a strong working relationship built on mutual respect, well-established trust, and a side-by-side problem- solving approach.
According to
Harvard Business Review
, there are three types of negotiators – Hard Bargainers, Soft Bargainers, and Principled Bargainers.
Hard Bargainers – These people see negotiations as an activity that they need to win. They are less focused less on the real objectives of the negotiations but more on winning. In the “Frontier Services Group: Building a Pan-African Logistics Provider (A) ”, do you think a hard bargaining strategy will deliver desired results? Hard bargainers are easy to negotiate with as they often have a very
predictable strategy
Soft Bargainers – These people are focused on relationship rather than hard outcomes of the negotiations. It doesn’t mean they are pushovers. These negotiators often scribe to long term relationship rather than immediate bargain.
Principled Bargainers – As explained in the seven elemental tools of negotiations above, these negotiators are more concern about the standards and norms of fairness. They often have inclusive approach to negotiations and like to work on numerous solutions that can improve the BATNA of both parties.
Open lines of communication between parties in the case study “Frontier Services Group: Building a Pan-African Logistics Provider (A)” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
Hau L. Lee, Laurent De Clara (2018), "Frontier Services Group: Building a Pan-African Logistics Provider (A) Harvard Business Review Case Study. Published by HBR Publications.
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