Reflection On Negotiation Exercise: Supply Of Semiconductors

Reflection on Negotiation Exercise

My Name: YanYan Jiang

My Teammate’s Name: Cody Colvin

Counterparts’ Name: Nick, Nicole

Negotiation Exercise: Supply of Semiconductors

On Thursday, I and Cody, acted as the members of SCS sales team, were negotiating with ADX to make SCS become one of its suppliers who provides a minimum of 350,000 semiconductors annually. Knowing that ADX demanded potential suppliers who could ensure product’s quality as well as frequent and on-time delivery, we felt confident to beat our oversea rivals who had bad delivery services. Hence, we offered an opening bid at $76 and $64 for our current generation and new generation of semiconductors, while targeted to sell them at $73 and $62, and demand reservation prices at $72 and $57, respectively. However, during the negotiation, we surprisingly found that the ADX management were not allowed to accept any deals above $60. Eventually, ADX accepted one of our alternative offers to buy our current generation at a low price of $57, while giving multi-year contracts, less frequent deliveries and a higher annual demand volume of 450,000. In this negotiation, both sides adopted a collaborative strategy as we demand each other and request a good relationship for now and future

While it shows that we value the other’s thoughts, it gives us a method to verify the information that we received. It is complicated for negotiators to correctly interpret information when people have different backgrounds and tacit knowledge. In the semiconductor negotiation, when the ADX management claimed that they could not accept any price that was more than $60, I was confused by if they were simply unwilling to pay this price or they are not allowed to negotiate above it. After asking them the question, I finally understood their limitations and develop other feasible