Proc 5840 Case 2 Pacific Oil Company

WEEK 7: CASE 2 PACIFIC OIL COMPANY

1. Identify the strengths and weaknesses of Fontaine's and Gaudin's negotiating strategy in their deliberations with Reliant Chemical Company.

Strengths:

Fontaine and Gaudin clearly defined their relationship strategy. They emphasized the need for a lasting relationship with Reliant. They stressed that the present and future quality of their relationship with the Reliant Chemical Company was essential to maintain. They identified important issues concerning Pacific’s long-term future with Reliant. Gaudin attempted to assure Hauptmann about the continued reliability of the market and how Pacific would ensure protection against drastic changes.

Weaknesses:

They did not expect any problems and therefore were not prepared for different potential outcomes. Their strategy was more accommodating rather than collaborative. They had to react defensively because of a lack of targets. They failed to do a comprehensive analysis of Reliant’s needs and interests. If they would have covered all of the issues, they would have been in a better position to negotiate a contract agreement. There was not adequate preparation. Coming to the table with as much information as possible will give you leverage. This is something they desperately lacked. They failed to discuss or plan an agenda. In addition, there was no exchanging of information about targets prior to actual negotiation. They did not research about Reliant’s possible strategies, and they just assumed it would go smoothly like the past contract negotiations. There were no limits or BATNA’s established. They just expected it would be an easy process. They did some research but they did not weigh all the alternatives. They were also not aware of the negotiating style by Hauptmann or Reliant. Hauptmann was brought into the senior purchasing manager position only 4 weeks prior to the negotiations. Gaudin and Fontaine gave Hauptmann control at times by letting him...