-75%
Solution
Negotiation
Negotiation is a mutual business interaction between or among people and organizations in an attempt to reach desired goals, resolve conflicts or avoid controversy. It encompasses collaboration, negotiation, and part of agreeing to reach agreeable terms that will benefit all persons of interest. In procurement and supply context, negotiation aims at acquiring resources at the best rate, at the same time maintaining and developing supplier relations.
The negotiation model developed by Bailey et al is a strategic model particularly in procurement and supply. The model outlines three key stages: Pre-negotiation Preparation, Negotiation/Interaction, and Post-negotiation Follow-up.
- Pre-negotiation Preparation: This stage is very important since it creates a platform that facilitates negotiations. It covers the collection and evaluation of inside and outside context data including things like suppliers’ capacities, estimate of future demand, historical price information, regulative requirements and the likes (OPR, 2021). There are also the analyses of stakeholders as well as the bargaining power which is done by applying some tools like Mendelow Matrix, Porter’s five forces model and Kraljic Matrix as far as the supplier market power is concerned. Key issues and/ or risks are as follows while strategies are planned as follows. Moreover, the roles in the team are assigned and the schedule for the meeting and its organization is developed.
- Negotiation/Interaction: This is phase involves bargaining such that different parties talk in order to come to the agreement. It entails getting the most out of a situation by controlling confrontation, finding solutions, and cobbling rapport (OPR,2021). The most important requirements are the possibility of continuous, open, and trustful communication in the inter-organizational relationship, market knowledge, and the systematic assessment of the counterparty.
- Post-negotiation Follow-up: This stage keeps the customers on the right track and look at how to resolve any issue that may be remaining after the contract has been signed. The follow-up phase is critical since it preserves the supplier relations, and at the same time deal with contractual issues.
The implementation of the Bailey et al. model in ROSHN itself highlights strong prospects for achieving advanced procurement sourcing strategies by mapping a significant investment in technology and infrastructure into Vision 2030 in Saudi Arabia. This structured approach is helpful to ROSHN of accomplishing its mission of delivering sustainable communities through the strategic positioning of suppliers and management of contracts.
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