Cts Members Case

CTS’ BATNA would be to either find a new buyer for the company or try to fix the company and invest more time and money into operations.  Currently there are no other known interested buyers and CTS has been unsuccessful in efforts to turn the company around to-date. Therefore, CTS must have a strong desire to forge a deal.

CTS’ primary source of power is their strong internal network. Second to this is their influence over MetroNet due to CTS members serving on the board of directors. If the CMI-CTS relationship were to fall apart, CTS has the potential to persuade MetroNet to no longer support CMI.  Lastly, they know CMI publicly committed to acquiring CTS in an approved proposal. There is pre-negotiation pressure on CMI to deliver on their proposal commitment.  CTS negotiators know that CMI is as desperate to buy as they are to sell.

Proposed Negotiation Solution

For a successful collaborative strategy there must be a high degree of trust, openness and effective communication between all parties. Furthermore, CMI and CTS must be committed to understanding each other’s needs and show sincere flexibility in their approach.  In addition, each party must be willing to redefine its perspective knowing that the whole can be greater than the sum of the parts if they could implement the strategy successfully.

A successful acquisition of CTS by CMI is desired for following reasons:

 CMI must grow their existing business by providing loans to additional high-ratio loan clients.  Thus they need access to the benefits of the MetroNet “old boy” network. CMI could make more revenue for their mortgage insurance business without significantly expanding their cost structure

