Question

Scenario

Because of financial problems, Francis is forced to sell his antique car. Last week Francis advertised his 1936 Rolls Royce Silver for sale. Yesterday Francis received a call from Mr. Lee who offered him $500,000 to buy his car. Francis did not accept this offer as he need more time to consider. This morning, another collector of antique cars, Mr. Chan, who specializes in the Rolls Royce and Bentleys cars, phones Francis to make up an appointment to see his car. Before meeting Mr. Chan, Francis determines to set his resistance point at $500,000. Based on this resistance point, he sets his selling price at $520,000.

After inspecting Francis’s car, Mr. Chan is very satisfied with the quality of Francis’s car and determines to buy the car. When Francis indicates his selling price, Mr. Chan responds quickly and says, “Your offer is not acceptable. I could offer you $490,000. Please accept it.” In fact, the resistance point of Mr. Chan is $510,000.

Question 3

Evaluate whether Francis uses a right approach to set his target point and resistance point.       

Question 4

Identify the bargaining range of both parties and the bargaining zone for the above situation. Explain whether there is any possibility for both parties to reach agreement.

Question 5

Identify and explain briefly ONE effective negotiation skill of Mr. Chan.                                            

Answer 1

Answer 3: According to me, Francis uses a right approach to set his target point and resistance point, because if he rejected the $5,00,000 deal in the past, then he must not accept a deal below this mark. Hence his resistance point is valid, and the target point is also above the resistance point, i.e., $5,20,000. Thus, this is also valid.

Answer 4: The bargaining range of Francis is $500,000 - $520,000.

Bargaining range of Chan is $490,000 - $510,000.

The bargaining zone would be $500,000- $510,000 by examining the bottom line or resistance point of both parties.

Yes, there is a possibility to reach the agreement, because there is not a negative bargaining range in two parties. If further tried, they can settle the agreement between the bargaining zone.

Answer 5: Some of the effective negotiation skills of Mr. Chan is he is courteous and straight forward, and confident. He politely used the words like"please". And he straightforwardly, openly, and confidently said no to the offer of $520,000 to the Francis. According to me, these are some effective negotiation skills of Mr. Chan.

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