Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. 7 Days Inn: Operations Strategy case study is a Harvard Business School (HBR) case study written by Gang Chen, Liang Xu. The 7 Days Inn: Operations Strategy (referred as “Inn Hotel” 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, Operations management.
Negotiation strategy solution for case study 7 Days Inn: Operations Strategy ” 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?
7 Days Inn, a leading hotel group in China, was established in 2005 and was listed on the New York Stock Exchange in 2009. It now operates more than 1,000 hotels in 168 major Chinese cities and has enrolled more than 30 million customers in its membership club. Its success is largely due to its innovative business model and operations strategy, which includes designing product services with the vertical cutting approach, enhancing customer loyalty through a membership system and direct sales, managing a hotel chain with different governance structures and expanding a hotel chain with an innovative franchised-and-managed model. In particular, the case introduces the company's shepherd management philosophy. However, as the company expands, it has become difficult for headquarters to manage and supervise all the hotels. In addition, the resignation rate of hotel managers has gone up to 30 per cent in the past few years. What should 7 Days Inn do to deal with these challenges? Does the company need to break the rules again and innovate its business model, operations strategy or operating model - or all of them?
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 “7 Days Inn: Operations Strategy” 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 “Gang Chen, Liang Xu”, 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 “7 Days Inn: Operations Strategy ”, 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 “7 Days Inn: Operations Strategy” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
Gang Chen, Liang Xu (2018), "7 Days Inn: Operations Strategy 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 7 Days Inn: Operations Strategy
Healthcare , Biotechnology & Drugs
Consumer Cyclical , Audio & Video Equipment
Technology , Computer Services
Consumer/Non-Cyclical , Food Processing
Consumer Cyclical , Auto & Truck Parts
Technology , Communications Equipment
Basic Materials , Gold & Silver
Capital Goods , Construction Services
Consumer Cyclical , Apparel/Accessories
Transportation , Trucking
Consumer/Non-Cyclical , Food Processing