Test for Negotiation Skills
Answer the following questions (total 70 points to complete).
Q1 The following descriptions represent the strengths and weaknesses of the purchasing side. Select all the descriptions belong to the strengths.
Since Manufacturer △△, XX possesses the important patent in Component A in terms of the technical aspect, no other companies are able to manufacture it. Therefore, it is practically dominated by the XX company.
Since Unit Component B is designed by incorporating our own specifications, it is difficult to switch suppliers.
Semiconductor C is a common product being manufactured by 10 companies worldwide. Our company approved 2 companies in the light of BCP [Business Continuity Plan] so that we can order every month by share allocation.
Even though our factory's purchasing volume of Electronic Component D is no more than 1% of total supply volume of Manufacturer , the purchasing volume of the entire Hitachi Group occupies 60% of the supply volume in Manufacturer △△. Therefore, Electronics Component D can be a pool-purchasing item, which is usually negotiated by Hitachi HQ.
Although it is amid of price negotiation for Semiconductor E, our customer has requested to pull in the delivery. Taking the opportunity, we have requested our supplier to secure the quantity together with price negotiation. In fact, there is no increase / decrease in the total demand over this fiscal year.
The market price of copper which is the raw material of Structural Component F has been significantly dropped compared to the last period.
Q2 Select description(s) from below that you think is correct during negotiation.
It is better not to talk too much with your negotiation counterpart on a routine basis so that he/she is not able to know what you are thinking.
In order to conduct the negotiation round to your benefit, it is wise to use different attitudes between oppressive and humble.
During negotiation, it is important to prepare well in advance by doing homework such as the management situation of the negotiation counterpart, demand trend of the items for negotiation, market situation of the raw materials, who is the key person to make a final decision, and so on.
It is not advisable to talk about the negotiation counterpart's personal information such as his/her hometown, hobbies, or favorite sport during negotiation.
In order to proceed with negotiation to our benefit, it is favorable to develop multiple vendors in order to create a competitive environment. To do so, you should work/discuss with your Design / Development Division on a daily basis to eliminate special specifications and adopt standard items.
During negotiation, you must keep on negotiating until you have satisfied 100% and achieved your target price set by yourself without compromising at all. It does not matter how long it will take.
During negotiation, try not to let your counterpart talk but you keep talking so that you can proceed with the negotiation to your benefit.
In order to avoid any vague reply, it is advisable to ask questions that make your counterpart no choice but to reply in Yes/No only.
When answering your counterpart's question, it is effective to answer more than what is being asked for in order to get them to understand your situation better.
Try not to be late for negotiation appointment. Also, be duly mindful of the language that you use during phone negotiation. Ensure to send email to correct recipients and assume that any attachment you send may be forwarded to someone else.