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16 Examples Of Negotiation Strategy

April 7, 2021
Bill Kimball

business negotiation strategies

Most negotiators focus exclusively on maximizing the value of the deal at hand. In doing so, they often undermine the success of future negotiations—their own and those of their colleagues.

One electronics company, for example, could leverage the tech firm’s sound and imaging IP in elder-care offerings, and another could enhance its device with the firm’s virtual reality expertise. Those opportunities made it worthwhile for the electronics companies to engage in meaningful negotiations with the team. Though this strategy required a lot of time and effort, the payoff was worth it. Once the negotiation is completed, you want to be able to work effectively with those in the other party during contract performance.

Examples Of Negotiation Strategy

Throughout most of the human history negotiation was a necessary skill, a basic part of life. You had to negotiate for food, transportation, almost anything. Still, even today you have to negotiate in both business and in life. That’s why you’ll want to be equipped with the right negotiating strategies to help you land a better deal.

  • And buyers expect that there will be a counter as they expect that their first offer will likely be rejected.
  • This discussion was held at the 3 day executive education workshop for senior executives at the Program on Negotiation at Harvard Law School.
  • I’m an executive coach, leadership development consultant, speaker and author of The Power of Presence and The Inspiration Code.
  • You want to take all of that and hopefully more, so start lower than the seller expects.
  • Otherwise, you’re conditioning the other party to ask for more while reducing your position and value.

Negotiation can feel somewhat adversarial but it is important to maintain a friendly composure. It often helps to view negotiations with a sense of humor. Avoid negative emotions such as anger, conceit and mistrust. Generally speaking, you are more likely to walk away with a good deal if the other side likes you. Research everything that you can about the other side and their negotiating position before walking into negotiations. Communicate to discover the strength of the other side’s position. For example, a purchasing manager who tries to detect how badly a salesperson needs to close a sale.


Frame it not as a threat, but as a fact; if you don’t reach an agreement, you will be better off. The second strategy is to be the first party to build a draft of the agreement. If you are able to do this, you may benefit from a first-mover advantage. Once you set the conditions , then the basis of the negotiation is bent in your favor.

business negotiation strategies

When that happens, negotiators are more likely to make poor tactical choices, either giving in to pressure from the other side or inadvertently causing their own worst fears to come to pass. After much debate about the trade-offs, the health care company developed a third approach. The health care company’s negotiation team would then simply revert to sending an opening term sheet. When approaching a high-stakes deal with a powerful counterpart, many negotiators debate whether to start by issuing their own proposal or by asking the other side to do so. But such binary thinking blinds us to the many ways we might shape the negotiation process to reduce risk and increase the likelihood of a great outcome. Many technology firms have IP teams that seek to persuade consumer electronics companies such as Apple, Sony, and LG to pay for licenses.

How To Put Together A Successful Team Of Negotiators

You want the best product you can get for the money you have to spend, so employ an approach that maintains the possibility of spending less than you had originally planned. I’m an executive coach, leadership development consultant, speaker and author of The Power of Presence and The Inspiration Code. I’m interested all things at the intersection of leadership and communications. I work with CEOs, senior leaders and teams globally at companies ranging from private businesses to the Fortune 50. I developed a proprietary methodology for executive presence that helps leaders inspire and motivate others. My approach is to take complex leadership concepts and translate them into actionable behaviors that fly in business. You may also want to consider re-anchoring, as Grant puts it.

business negotiation strategies

As technology and automation continue to transform the nature of work, interpersonal skills are becoming increasingly relevant as a way to add a competitive edge in business. Many people fail to achieve their potential because they don’t see the opportunities to negotiate a win/win agreement with their colleagues. In some countries you’re expected to negotiate hotel room prices. In other places you’ll find sprawling bazaars, where half the fun is negotiating everything; in Turkey it’s almost impolite not to haggle. Take it or leave it should be avoided any time this negotiation strategy can poison the well.

We either enter into negotiations because we have to or because we want to. Part of our strategy will involve a careful analysis of our BATNA . If an agreement is absolutely essential and we have few alternative options, in the event of talks collapsing, our BATNA will affect our strategy. Most of our business negotiations are likely going to fall in the last two categories. We will be negotiating with regular suppliers or engaging in labor negotiations with the same union reps, for example. While many colleagues, clients, and suppliers will demand your time on a daily basis, very seldom will they remind you to invest more time preparing for your negotiations with them.

Don’t Pay List: Negotiating The Best Deal For Your Money

Always have something to give away without hurting your negotiating position. If you’re submitting a price proposal to a buyer, consider inserting decoys and red herrings for the other party to find. For example, if you are bidding a project, consider including some nice-to-have items that aren’t critical to the success of the project. You could also include spare parts that may or may not be needed in the end. If the buyer takes those items out to reduce the overall cost, you haven’t lost anything but it may help the buyer reach his price target. Such distractions will help to divert the other party from attacking the meat of your proposal. Employing this strategy must be viewed in the context and in consideration of what other bidders may be doing.

Here are the key strategic principles negotiators should apply to their next complex deal. Strategic negotiators look beyond their immediate counterpart for stakeholders who can influence the deal. They intentionally control the scope and timing of talks, search for novel sources of leverage, and seek connections across multiple deals. Dr Cain is an expert in human behavior and decision-making. He specializes in conflicts of interest and the perverse effects of disclosing them, as well as turning altruism on and off.

It learned that it could just keep asking for more unreasonable things, and that the CEO would always eventually cave. Keep the negotiations professional and courteous.This is also known as the “don’t be an asshole rule.” Nobody really wants to do business with a difficult or abusive personality. Establishing a good long-term relationship should be one of the goals in the negotiation. A collaborative, positive tone in negotiations is more likely to result in progress to a closing. Review and understand thoroughly the business of the other party by reviewing their website, their press releases, articles written about their company, and so forth. Two additional strategies could also be used to increase the pressure on the other side to give in to some of your demands and reach an agreement. The first one is rather intuitive but often forgotten – if you have a stronger BATNA than the other side, then you should disclose it.

However, if you badly need a job you may have to accept any reasonable offer. Skilled negotiators will always seek to understand the other side’s batna. They will also try to overstate their batna to the other side. Negotiation strategy is an approach or a plan for negotiations. It is common to prepare a general strategy before walking into a negotiation. It is also common to think through a few tactics as a means of preparation.

The negotiation of IP rights in this market is dauntingly complex. Patent infringement is pervasive—though often unintentional. Legitimate efforts to collect royalties are vastly complicated by the well-known phenomenon of patent trolls. The new contract rebalanced production and supply across multiple plants and delivered substantially more value to both parties.

Poor negotiation can cripple a company just as quickly as losing key customers. While most negotiating strategies seem like common sense, it’s not uncommon for people to get caught up in the emotion of the moment and ignore their basic instincts. Emotion, luck and magic have no place in a successful negotiation. It takes an iron gut, homework, street smarts and unblinking discipline. These keys will unlock your ability to get the best deal possible under any circumstances.

In this video, Professor Guhan Subramanian discusses a real world example of how seating arrangements can influence a negotiator’s success. This discussion was held at the 3 day executive education workshop for senior executives at the Program on Negotiation at Harvard Law School. Such a nice blog on 5 win-win negotiation strategies and I hope you keep update us with such great tips and information in future too. Choreographing the sequence in which you address issues or engage different players is also important. Resolving some issues may reset the stakes or reframe the remainder of the negotiation.

Often we go into negotiations with one or the other – or let our partner start the bidding. We often approach negotiation being very guarded and wary of showing our cards. Yet, while we believe this is a smart approach, it has a negative impact on our outcomes and inhibits trust.

If they are threatened and pounded into submission, they probably won’t negotiate with you again, possibly cutting off any future business. While heated confrontation is a common occurrence during negotiations, at some point collaboration and compromise are needed to get a deal. While you have the power to influence the negotiation process in your favor, your goal should be to secure a good deal without extracting the last pound of flesh from the other party.