Commodity Planning Document

As a buyer for Galaxo, I’m looking to secure 100,000 pheasant eggs for their yolks at the best available price. The broker has all the power in this scenario. There is 1 broker representing the remaining surplus of eggs. There are 5 buyers, Warner-Robbins rival buyer may have an understanding of the source of the fertility compound. They may be interested in securing the eggs for the same reasons creating competition. However the key question is “what part of the egg do the other buyers need?

If other buyers are interested in all parts of the eggs but the yolk, there is the potential to work out a strategic alliance to get the eggs for a lower price working with the other buyers. Rather than create competition we work together to put downward pressure on price. Essentially, we look at the buyers and where in the value chain each firm’s interest sit. For example, buyer 1 may want the shell, buyer 2 may want the white and so forth. Galaxo wants to be in a good position to purchase the yolks.

As a buyer for Galaxo the target is 100,000 pheasant yolks for .50 per yolk. The reservation price is 80,000 pheasant yolks for $2.50 per yolk.

Without knowing other buyers interests it is difficult to understand the positive bargaining zones. I believe there are a few. If we can break the egg into components like the yolk, white, shell, etc.

If we look at just the broker and me as the buyer. The broker has all the power. The bargaining zone is probably $1 to $2.50 per egg. I need these eggs essentially at all cost to do a production run. A year (each spring) is a long time to wait between pheasant egg availability.

There does not seem to be a BATNA that allows me to walk away and purchase from another vendor. Galaxo will have to try really hard to work with other buyers to secure a minimum of 80,000 pheasant egg yolks for less than $2.50 per yolk.