Competitive Negotiation
Negotiation is a process in which two or more parties attempt to come to an agreement with each other in order reach an outcome that is satisfactory to all parties. The process of competitive negotiation can be described as a strategy in which each party pits its interests against the interests of the other parties in an attempt to secure the best possible deal. This type of negotiation is typically used when the parties are trying to reach a commercial agreement such as a business contract or the purchase of goods or services.
In competitive negotiation each party typically has their own goals or interests that they wish to pursue and a limited amount of resources or bargaining power. The goal of competitive negotiation is for each party to use the power of negotiation to their best advantage in order to achieve the desired outcome.
Negotiations typically begin with each party formulating their opposing positions, which represent their interests, goals and objectives as well as the resources that they have available to them. During this phase, each party will make offers and counter offers to one another in what could best be described as a game of brinkmanship. The purpose of this is to establish the position yet unknown, that each party has in the negotiation. As each side begins to understand the other’s positions they can focus on seeking out value and striking deals.
The negotiation process itself typically consists of a series of steps designed to establish the details of the agreement and ultimately reach an agreement that is mutually beneficial. The first step of the negotiation process is to establish the ground rules which will guide the process. This typically includes setting a timeline for the negotiation and agreeing on a format for exchanging information and proposals as well as outlining the final decision making process.
The next step of the process is to develop an understanding of the underlying issues and interests at the heart of the negotiation. This includes understanding the needs, objectives, and desired outcomes of each party. The next step is to explore options and alternatives, allowing each side to see the different ways in which they can gain value in the negotiation. This allows the parties to come to an agreement that is mutually beneficial.
Once all parties have come to an understanding of each other’s interests and explored various options it is then time to move to the bargaining stage. This is where the negotiation begins to take shape and each party’s interests are weighed against the interests of the other parties. The parties must then enter into a give and take process in order for the negotiations to move forward and an agreement to be reached.
The bargaining stage is an important stage of the negotiation and often requires a great deal of negotiation skill. This requires parties to think strategically, understand one another’s interests, and propose solutions that benefit both sides of the negotiation.
Once agreement has been reached the next step is to move to a final agreement stage. This involves the parties coming together to review the details of the agreement, taking into account the interests of both sides, and drafting the final document.
Successful competitive negotiation requires parties to be prepared, have a clear understanding of the interests of the other party, as well as their own interests, develop creative solutions, work together, and remain flexible. By following these steps, parties can come to an agreement that works for both of them.
