1、L/O/G/O1International Business Negotiation2 Chapter5 Offer of international business negotiation3Teaching Objectives After studying this module,you should be able to After studying this module,you should be able to know:know:1.What are inquiry and offer；2.Forms and basic contents of offers 3.Strateg
2、ies for making offers 4.Who should make the first offer and defence for the first offer4 IntroductionOffer Strategies for making offers 4123Contents Inquiry5Introduction:distributive stage-Inquiry and Introduction:distributive offer Near the conclusion of the Information Exchange,the focus changes f
3、rom the other side back to our own sides.Negotiators stop asking the other party what it wants and begin to state what they must obtain or what they are willing to give the other side.At this point they enter the Distributive Stage.8 5.2.2 The basic conditions of an offer(1)The offer shall be made t
4、o one or more specific persons(2)Contents of the offer shall be sufficiently definite (3)Time of validity or duration of offer9 5.2.3 Forms of offer (1)Oral offer (2)Written offer (3)Combination oral and written offer105.3Strategies for making offers 5.3.1Getting your first offer ready For every neg
5、otiation you plan to enter,your initial offer should stand on its own merit within the prevailing context surrounding the discussions.Entering the negotiations under false pretences or unfounded premises can prove costly or result in deadlocks.Make your first offer competitive in the eyes of the oth
6、er party and be ready to defend it with valid arguments.11 5.3.2 Dont be afraid to be aggressiveHow extreme should your first offer be?A research suggests that first offers should be quite aggressive but not absurdly so.Many negotiators fear that an aggressive first offer will scare or annoy the oth
7、er side and perhaps even cause him to walk away in disgust.However,research shows that this fear is typically exaggerated.In fact,most negotiators make first offers that are not aggressive enough.12 5.3.3 Should you make the first offer?Yes,if you wish to take the initiative and set the tone of the
8、discussions.In numerous studies sellers making a first offer have been found to achieve higher negotiated prices than buyers making first offers.Making the first offer anchored the negotiation in the favour of the sellers.13 No,if you are not familiar with the market in which you are trying to do bu
9、siness.Making an offer without adequate information or a clear understanding of what the other side wants places you in a risky position.For example,having your first offer accepted means that you have underestimated the market.14 5.3.4 Should you open high?Yes,if you can justify the level of your o
10、ffer.At this early phase of the discussions,any objections to your high offer should be dealt with through questions,not by making concessions.Your best approach to objections is to find out which part of your proposal is acceptable and which elements are considered objectionable.Only by acquiring t
11、his additional knowledge will you be in a position to justify your initial offer or eventually make a counterproposal.15 5.3.5 Should you make a low offer?Yes,in special situations.Skilled negotiators may make a low initial offer,near the bottom line not so much to get the business,but to be invited
12、 to the negotiations.In some industries and markets,your product is sold at a going price and at predetermined conditions,leaving you with little choice in setting your opening offer.When facing strong competition,your offer should be more or less in line with theirs.16 5.3.6 How a first offer shoul
13、d be constructed Although it is clear that first offers should be strong,negotiators should always guard against becoming so aggressive that they move outside the range of what would be acceptable to the other party.The fear that many negotiators have concerning the possibility that aggressive first
14、 offers may scare or annoy the other party to the extent that it would break off the negotiation is often highly exaggerated.It causes most negotiators to err on the side of being overly-cautious and therefore to forgo optimal agreements.17 5.3.7 A defence against first offers When a negotiator does
15、 not have the opportunity to make the first offer,their protection against anchoring lies in making an aggressive counter-offer firmly based on the other partys BATNA,real base and aspiration base.The best way to present such an offer is in a way that creates a positive climate and blunts the other
16、partys first offer.The key to protection lies in a negotiator knowing his/her aspiration base and the limitations of the other party.18 5.3.7 What should you do if your first offer is rejected?React positively.A rejection should be regarded as the beginning of the negotiations,not the time to make concessions or take a defensive attitude.19Thanks!
