Multiparity Negotiation
Autor: neeraj1509 • March 16, 2015 • Case Study • 657 Words (3 Pages) • 1,479 Views
Page 1 of 3
Submitted by: Neeraj Jain
Subject:NS Contact 5: Assignment No.: 2
Read page 1-4, Sarah Talley & Frey Farms Produce: Negotiating with Wal-Mart and answer the following questions regarding ‘Negotiating 4th of July Watermelon prices:
Frey Farms Overview:
- Family-owned suppliers of fresh fruits & vegetables.
- Frey Farms supplied to local & regional customers in 1980 through independent grocers.
- “Homegrown freshness” emphasis; direct delivery ensures freshness.
- In 1997, Sarah approached Wal-Mart with aim of converting Division One stores into “supercenters”.
Wal-Mart Overview:
- Wal-Mart Stores – one stop convineant destination for consumer needs.
- Wal-Mart strictly follows “EDLP”.
- Wal-Mart is a market leader in the multi-chain retail business.
- Largest retailer, the biggest private employer & second largest public corporation in the world.
- Walton Family owns 50% of Wal-Mart.
- Wal-Mart has 11000 stores in 27 countries under 55 different names.
- How do you describe their current negotiation situation?
- The negotiations have hit the deadlock.
- Wal-Mart needs a price lower than that can be offered by Frey Farms & therefore this situation.
- Wal-Mart needs “EDLP” which due to the current unfavorable situation is not possible for Frey Farms.
- Frey Farms is a small company with limited resources & narrow product range & therefore relative power lies with Wal-Mart.
- Frey Farms has two options: 1. Agree to Wal-Mart’s low price & manage to equate supply with demand. 2. Sell produce to other regional stores, alternative super centers.
- How did they land there?
- Due to bad weather conditions & pest diseases, Frey Farms was unable to produce enough watermelons to cater Wal-Mart’s needs.
- 4th of July priority; demand>supply.
- Unable to meet Wal-Mart’s low price.
- Procuring from western markets to supply to regional markets would result in increased transportation needs.
3. What advice would you offer Sarah Talley?
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