A Negotiation for Acquiring an Asset Between Two Parties.

The Case:

Mr. Jamal had a clothing shop named ‘Clothing World’ in Metro Shopping Mall in Dhanmondi Commercial zone. He wanted to sell that shop as he needed some immediate cash. As the news was spread out, there were two parties, Mr Rahim and Mr. Jahid expressed their interests to buy that shop. Mr. Jamal faced the problem as both parties wanted to buy that asset, no one wanted to gave up, Mr Rahim, who had a shop just beside ‘Clothing World’ wanted to expand the space by merging two shops. On the other hand, Mr. Jahid, an outsider who wanted to start a new business in that market.

Mr. Jamal set a selling price of TK 4000000 for the shop, but made up mind that at he would sell it if he got TK 3500000. Mr. Jahid came first with an offer of Tk 3500000, though he was ready to pay upto Tk 3800000. On the same day, Mr. Rahim also came with the same offer as Mr. Jamal did.

As Mr. Jahid got the information that Mr. Rahim also offered the same price as he did, then he raised the price to tk 37000000 as he was desperate to start a new business in that market. When Mr. Rahim was informed about new situation, he was not ready to gave up either, he also raised his price to Tk 3700000 and requested to accept his offer as he was his fellow business man. Mr. Jamal fall in a dilemma, if he waited for a longer time he would get higher price than what he anticipated, but he needed immediate cash. In Addition he thought if both parties pulled off themselves from the race, then would be affected negatively.

Though Mr. Rahim was his fellow business man but Mr. Jahid came first with the offer. He requested both parties individually to talk with each other and made a settlement. But they declined to do so.

To resolve the deadlock Mr. Jamal informed Mr. Anwar Hossein, the chairman of the market committee. Then one day he set a negotiation table and all the parties were present there in order to negotiate with the goal of reaching an agreement.

Although both parties were desperate to attain the asset, but both have alternative plans in their respective minds. Mr. Jahid had an alternative plan that he would go to some other market if could not get the shop. On the other hand, Mr. Rahim thought if he would not get the shop he would invest some money to his business and rest of the money would be deposited in the bank in order to capitalize future opportunities.

Though initially they came with a bit tough mindset because they held different power, but ultimately they sought a fair outcome. After an extensive and long discussion, Mr. Rahim 1 | P a g e

admitted that Mr. Jahid’s claim is strong enough as he came first with the offer, but said his own offer was not weak either as he was doing business in that market for a long time. And he was a fellow businessman of Mr. Jamal. To reach into a settlement Mr. Rahim gave an alternative offer to Mr Jahid that if he would gave up his claim then he would sell him his another shop owned by him in the same market at below the market price. He said that Mr. Jahid could buy it as it would be beneficial for him.

Mr. Jamal thought about this offer and decide it would not be wise to make a conflict with an existing business man in that market where he was going to be a newcomer, in addition he was getting a shop with a lower price, which could be beneficial for him, as he could invest the extra money in his new business. Additionally a warm relation with Mr. Rahim would help him to do his business in that market in future.

Finally he decided to accept that offer from Mr. Rahim and gave up the claim about Mr. Jamal’s shop and got ready to start his new business in that market with a new shop, what he wanted. Mr. Rahim aloso finally got what he wanted, an expansion of his existing shop. Mr Jamal also got what he wanted. The negotiation is ended successfully as all the parties benefitted from the negotiation.

From the definition of negotiation we find that it is process that involve between two or more people of equal or unequal power meeting to discuss shared or opposed interests in relation to a particular area or mutual concern. In my case two parson, Mr. Rahim and Mr. jahid were holding unequal power, where Mr Jahid had an advantage that he was the first person to make the offer and Mr. Rahim had an advantage that he was an existing businessman in this market. The issue of the negotiation is to acquire the asset which is in this case, a cloth shop.

This is negotiation rather than selling as the it fulfills the condition that, someone want something from someone else and vice versa. Here Mr. Rahim wanted to to buy the shop, and Mr. Jahid wanted to start a new business in that market. In the process of negotiation Mr. Rahim offered another shop owned by him to Mr. Jahid and wanted his giving up claim about Mr. Jamals shop so that he could get it.

It is an integrative negotiation rather than descriptive one, as it in this negotiation all the parties cooperate to achieve maximum mutual benefit, emphasized on future relationship between them and every one found them in a win-win situation.

Key Characteristics of these negotiations are

- To resolve the deadlock

- Mutual benefit of both parties

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- Involvement of third party

- Willingness of both parties to reach a solution

BATNA

Although both parties were desperate to attain the asset, but both have alternative plans in their respective minds. Mr. Jahid had an alternative plan that he would go to some other market if could not get the shop. On the other hand, Mr. Rahim thought if he would not get the shop he would invest some money to his business and rest of the money would be deposited in the bank in order to capitalize future opportunities.

Sellers Resevation Price was: Tk 3500000 but asking Price was Tk 4000000

Buyers Resevation Price was: Tk 380000 but the was finalize at Tk 3700000

Here the ZOPA is Tk 3500000 to Tk 3800000

Mr. Rahim identified the reasons behind Mr. Jahid’s the interest for buying the shop.

If the negotioan did not happen, then every party would get nothing. And if there would be a successful negotiation then their objectives would be achieved.

In this case the both parties are collaborative in order to achieve mutual benefit.

Though initially they came with a bit tough mindset because they held different power, but ultimately they sought a fair outcome.

In this case Mr Rahim was in the mind set of offering first, and he did so, instead of using his power to prohibit Mr. Jahid from entering in the market as he wanted a good relationship between them.

Mr. Rahim extended his hand by offering an alternative first offer of selling his other shop at a lower price to Mr. Jahid which creates a surplus value.

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