Coffee Contract

Coffee Contract

Kyle Heuer

Wednesday Night Gwinnett

• My party’s:

•       BATNA: Anderson’s best alternative would be to continue to nurture Anderson Coffees current contracted customers to uphold our reputation as a company that is fair and reliable. Even though our costs are somewhat higher than other companies, it is because we support extensive research on the growing, processing and brewing of coffee.

•       RP: Our reservation point on this bid is $6.50. Even though it will represent a loss of $.20/lb; it is a worthwhile investment for a positive growth opportunity in the form of positive publicity.

•       Target: Our target price is $8.10/lb, which is our standard restaurant price. This would add a great deal of profit to personal commission and open up the range to ensure a higher compromised price. Also, because this is a standard price used in past transactions it should alleviate the thought of a chill factor occurring.

•       Interests in priority order:

1. Publicity. This deal could expand Anderson’s reputation within new markets and all but guarantee an increase in future purchases. Anderson is willing to take a small loss financially to publicize the company in a positive way.
2. The sale. As VP of sales, it is always in my best interest to develop relationships and close deals. Even though publicity is important, the company runs off the profit earned.
3. Face. With any deal, we have to make sure not to enter the bid with the outcome of a chill factor. We have to be fair and willing to negotiate, however stand tall in regard the positive reputation we currently have in the market.
4. Future Opportunities. As a VP of sales, I have to think about the big picture and how each deal can send our company into an upward or downward projecting slope. I have to think about my position and make sure I come to the negation prepared.

•       Other considerations, if any: Personal relationships. At my level, a lot of business is generated through non-work related activities. I believe having a friendly meeting to introduce the company and talk about things other than the deal is always a good idea to ensure our reputation is a good one in the minds of other parties.

•      Other party’s:

•       BATNA / RP: The company with the lowest bid; keeping in mind the quality of the coffee provided. Their job is to provide their customers with a quality product however they hold the power of the all mighty dollar.

•       Target: The companies cost, or close to it. Statler Hotel knows every company will have a reservation point, however their target will be the closest price possible to the cost of the coffee they feel is the best quality for the price.

•       Interests in priority order:

        1. Product. A hotel is in the business of customer experience. They understand the affinity some people have for their morning cup of coffee and want to exploit their hotel by providing the best quality product they can.

        2. Price. Although they would love to have the best quality product on the market, they still have a business to run. Like any other business, they have to take into account all expenses and budget accordingly.

        3. Reputation. The Hotel wants to have a good reputation as a Hotel that is fair and easy to do business with. By establishing a good reputation, they might possibly benefit from vendor incentives down the road, which would provide discounts or even free products to generate new business.