Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. Alibaba - Building a Social Sustainability Ecosystem for E-commerce case study is a Harvard Business School (HBR) case study written by Haritha Saranga, Yanghua Huang. The Alibaba - Building a Social Sustainability Ecosystem for E-commerce (referred as “Alibaba Taobao” 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, Strategy, Sustainability.
Negotiation strategy solution for case study Alibaba - Building a Social Sustainability Ecosystem for E-commerce ” 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?
The case narrates the evolution of the Alibaba Group, starting with Alibaba.com in 1999, in four different phases, with the last phase beginning after its IPO in 2014. The evolution is described from a social sustainability perspective, highlighting Alibaba's initial efforts to help small businesses in China access the world markets and later, its focus on facilitating e-commerce led entrepreneurship in rural parts of China. Not surprisingly, Alibaba Group's evolution coincided with China's economic growth, as the e-commerce platforms have significantly contributed to the growth of businesses and consumerism in China. Specifically, the development of e-commerce ecosystem by Alibaba Group, created a platform where not only retail businesses, but also allied third party service providers could emerge and grow. After its IPO in 2014, Jack Ma, Alibaba Group's chairman, explicitly defined "E-commerce in rural areas" as one of the three strategic directions going forward. The case discusses in detail the two rural initiatives "Taobao Villages" and "Rural Taobao" that the Alibaba group pursued as part of its rural strategy. It is estimated that the e-commerce of Taobao villages created more than 840,000 direct job opportunities and rural Taobao reached 202 counties in 22 provinces and established 9,278 village-level service stations by August 2016. The case also provides a brief overview of the ecommerce industry in India and ends with the questions: if there is a way for e-commerce players to provide socially sustainable business opportunities for the Indian rural population and how Alibaba should plan its entry and growth in the Indian market.
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. 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 “Alibaba - Building a Social Sustainability Ecosystem for E-commerce” 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 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. According to “Haritha Saranga, Yanghua Huang”, 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 “Alibaba - Building a Social Sustainability Ecosystem for E-commerce ”, 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 “Alibaba - Building a Social Sustainability Ecosystem for E-commerce” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
Haritha Saranga, Yanghua Huang (2018), "Alibaba - Building a Social Sustainability Ecosystem for E-commerce Harvard Business Review Case Study. Published by HBR Publications.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Alibaba - Building a Social Sustainability Ecosystem for E-commerce
Services , Real Estate Operations
Technology , Semiconductors
Services , Business Services
Basic Materials , Misc. Fabricated Products
Consumer/Non-Cyclical , Food Processing
Technology , Communications Equipment
Capital Goods , Construction Services
Utilities , Electric Utilities
Financial , Regional Banks
Consumer Cyclical , Auto & Truck Parts
Capital Goods , Construction - Raw Materials
