The seller (Riggs Engineering) manufactures and services recycling equipment for the computer industry. The buyer (Vericomp) solvent used in the production of chips. Although to put in a high-tech industry, this exercise shows the basic aspects of the analysis, the trial would apply in every situation – especially potential sources of joint gains and the tension between creating and claiming value. While it may be possible to reach an agreement on price alone, doing so is difficult. Students can exp … Read more »

The seller (Riggs Engineering) manufactures and services recycling equipment for the computer industry. The buyer (Vericomp) solvent used in the production of chips. Although to put in a high-tech industry, this exercise shows the basic aspects of the analysis, the trial would apply in every situation – especially potential sources of joint gains and the tension between creating and claiming value. While it may be possible to reach an agreement on price alone, doing so is difficult. Students can extend the zone of possible agreement if they act creatively on other issues, including the scope Riggs supplies, payment plans, timing of the contract and possible guarantees. Even as they jointly expand the pie, of course, they have to pay attention to what disc shall be theirs. All agreements can be expressed in present value, so it is easy to identify which pairs generated the most profit, and people have the best deals for their respective companies. This is a two-party, multi-issue negotiation exercise. Students should read either (A) or (B), but not both, and are then combined to negotiate. Results is according to the simple form (C) case.
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Michael A. Wheeler
Source: exercises
3 pages.
Publication Date: Jul 19, 2000. Prod #: 801 096 PDF-ENG
Riggs Vericomp Negotiation (A): Confidential Information for Riggs Engineering HBR case solution

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