The Commodity Purchase Negotiation

1. What are your goals in this case? Why?

My main goal in this case is to acquire all 100,000 pheasant eggs for Warner-Robbins. There is one commodity broker; as the agent I need to purchase the eggs, otherwise Warner-Robbins is unable to produce the product. I have to keep in mind, that Warner-Robbins is creating a vaccine to save babies who have low birth weight or other birth risk. If I lose this bid, the company will be at a great loss.

The price is also a major factor-I must stay under $2, but also negotiating the lowest price possible. Purchasing the pheasant eggs from the broker will also provide me with a compensation of $5,000 if I buy at least 70,000 eggs. Less than the minimum would not be able to produce enough to run the compound commercially.

2. What concerns do you have going into the negotiation? Why?

My main concern is my competitor Galaxo- they may have learned of the source of the infant hardiness compound, and is about to bring a competing product to the market.

Galaxo might be willing to pay more than $2 per egg in order to market the drug before Warner-Robbins. Since, I have a limited budget of $2 per eggs; this will hinder my ability to buy the eggs. Galaxo may have the purchasing power if their budget is higher.

3. What will be my opening strategy? Why?

It’s imperative to listen to all the parties that are interested in buying the pheasant eggs. The buyers have different motives, so it’s important to listen first to build a strong negotiation stance.

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It’s extremely important to listen to Galaxo’s reason for wanting the eggs. After hearing all the reasons and interests from the other buyers, I will explain the reason I need the pheasant eggs to the broker. Informing the broker that the eggs are needed to save babies lives might give an advantage over the other buyers. Another important factor is allowing the other buyers to bid first, so I can bid higher, while keeping the unit price of $2 or less per egg.

4. Are there ethical considerations in this case? Why or why not?

Commodity Purchasing

I don’t think there are ethical considerations in this case because Warner-Robbins is trying to create a compound that has been approved by the U.S. Food and Drug Administration to save babies who have low birth weight or other risks.