Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. Shaping an Industry in Your Favor case study is a Harvard Business School (HBR) case study written by Fabrizio Ferraro. The Shaping an Industry in Your Favor (referred as “Architectural Wasserman” from here on) case study provides evaluation & decision scenario in field of Innovation & Entrepreneurship. It also touches upon business topics such as - negotiation strategy, negotiation framework, Change management, Manufacturing.
Negotiation strategy solution for case study Shaping an Industry in Your Favor ” 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 1939, at the age of 26, Lew Wasserman arrived in Los Angeles with the talent agency MCA. Over the next three decades, he took MCA from a peripheral player to becoming the dominant studio in Hollywood. How did an outsider manage to change the competitive landscape of the entire moviemaking industry so completely? A study of this fascinating historical account reveals the process by which a firm can achieve "architectural advantage." Managers may be familiar with the idea that "shocks" brought on by technological and regulatory changes can trigger the emergence of novel industry structures. The Wasserman case shows there is more to it than that. An innovative business model, by itself, is not sufficient. Rather, the acquisition of mispriced resources by newcomers and the incumbents' (in)action are also critical for newcomers to enter the industry, redraw its boundaries and achieve architectural advantage. Are there opportunities for your company to position itself in segments that would put it in the dominant position? Wasserman's experience in the movie and television business, as well as other timely examples drawn from music and publishing, provide useful insights for managers operating in industries with unstable, contested architectures; entrepreneurial firms trying to develop architectural advantage in an emerging industry; and venture capitalists trying to identify investment opportunities.
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 “Shaping an Industry in Your Favor” 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 “Fabrizio Ferraro”, 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 “Shaping an Industry in Your Favor ”, 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 “Shaping an Industry in Your Favor” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
Fabrizio Ferraro (2018), "Shaping an Industry in Your Favor 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 Shaping an Industry in Your Favor
Basic Materials , Metal Mining
Financial , Misc. Financial Services
Financial , Regional Banks
Technology , Electronic Instr. & Controls
Technology , Electronic Instr. & Controls
Consumer/Non-Cyclical , Food Processing
Technology , Computer Services
Consumer Cyclical , Auto & Truck Parts
Consumer/Non-Cyclical , Personal & Household Prods.
Services , Real Estate Operations
Financial , Regional Banks
