Introduction to Negotiation Strategy
At Oak Spring University, we provide corporate level professional Negotiation Strategy and other business case study solution. WHEN DIGITAL DAVID MEETS PHYSICAL GOLIATH: THE CASE OF BROCKHAUS VS. WIKIPEDIA case study is a Harvard Business School (HBR) case study written by Enders Albrecht, Andreas Konig, Harald Hungenberg, Johannes Muck. The WHEN DIGITAL DAVID MEETS PHYSICAL GOLIATH: THE CASE OF BROCKHAUS VS. WIKIPEDIA (referred as “Encyclopedias Brockhaus” from here on) case study provides evaluation & decision scenario in field of Leadership & Managing People. It also touches upon business topics such as - negotiation strategy, negotiation framework, Strategy.
Negotiation strategy solution for case study WHEN DIGITAL DAVID MEETS PHYSICAL GOLIATH: THE CASE OF BROCKHAUS VS. WIKIPEDIA ” 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?
This case study shows the struggle of Brockhaus, publisher of Germany's best-known encyclopedia, to survive two major challenges: (1) the advent of digital encyclopedias marketed on CD-ROM and (2) the rise of online encyclopedias which are accessible free of charge. While Brockhaus was able to successfully deal with the emergence digital encyclopedias in its war against Microsoft, the company stumbled over the rise of digital encyclopedias and ultimately had to abandon the market for encyclopedias which it had dominated for over a century.The case is structured in three sections. Section one describes Brockhaus' response to the emergence of digital encyclopedias and identifies the main reasons for why the company was able to successfully deal with this innovation. At the end of section one, participants are asked to analyze (1) the strategic situation Brockhaus faced when dealing with digital encyclopedias; (2) the actions of Brockhaus in response to the advent of digital encyclopedias; and (3) the reasons for why Brockhaus successfully dealt with this strategic challenge. Section two contains a review of two theoretical concepts: disruptive innovation theory and the value curve. This theory section should provide the participants with the tools necessary to understand radical innovations and to successfully respond to them. Section three describes Brockhaus' war against Wikipedia and the actions Brockhaus took to deal with online ecyclopedias. At the end of the section, participants are asked (1) to analyze how the strategic challenge brought about by online encyclopedias differs from the challenge resulting from the rise of digital encyclopedias; and (2) to use the value curve concept to design possible strategies in response to the emergence of online encyclopedias. In a wrap-up following section three, the case describes that Brockhaus ultimately failed at successfully dealing with the emergence of online encyclopedias and had to leave the market. Learning objectives: The aim of the case is to enable participants to understand that the emergence of Microsoft's Encarta and Wikipedia both represented major challenges for Brockhaus, but that they differed in a very important aspect: While the emergence of digital encyclopedias was a continuous change, the emergence of online encyclopedias was a discontinuous one. This fundamental difference lies at the heart of Brockhaus's failure since the company tried to tackle both situations with the same strategic approach. In addition, participants will learn to assess whether a strategic challenge is discontinuous or not, to recognize typical behavioral patterns in response to discontinuous change and how these can be overcome.
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 “WHEN DIGITAL DAVID MEETS PHYSICAL GOLIATH: THE CASE OF BROCKHAUS VS. WIKIPEDIA” 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 “Enders Albrecht, Andreas Konig, Harald Hungenberg, Johannes Muck”, 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 “WHEN DIGITAL DAVID MEETS PHYSICAL GOLIATH: THE CASE OF BROCKHAUS VS. WIKIPEDIA ”, 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 “WHEN DIGITAL DAVID MEETS PHYSICAL GOLIATH: THE CASE OF BROCKHAUS VS. WIKIPEDIA” can make for an effective negotiation strategy and will make it easier to negotiate with this party the next time as well.
Enders Albrecht, Andreas Konig, Harald Hungenberg, Johannes Muck (2018), "WHEN DIGITAL DAVID MEETS PHYSICAL GOLIATH: THE CASE OF BROCKHAUS VS. WIKIPEDIA Harvard Business Review Case Study. Published by HBR Publications.
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