You are a business negotiations consultant who has been hired by a start-up comp
ID: 358016 • Letter: Y
Question
You are a business negotiations consultant who has been hired by a start-up company to create a training guide for its newly hired procurement specialists.
Write a 1,050- to 1,400-word negotiations training guide that includes:
Elements of business negotiations
Specific negotiation tactics pertaining to purchasing relationships
Importance of supplier relationship management in negotiations
Examples of successful negotiations
Pitfalls to consider when entering into supplier negotiations
The type of negotiations team that the company should develop (i.e. key members)
Financial outlook - the impact on financial results
Format the paper according to APA standards.
Explanation / Answer
7 Elements of Negotiation for a start up company are:
Specific negotiation tactics pertaining to purchasing relationships:
Importance of supplier relationship management in negotiations:
In today’s competitive world, buyers & suppliers are building strategic partnerships battling to reduce everyday transactional exchanges, eliminating any outliers. This is an ongoing challenge with every company and every industry. With everyday changing macroeconomic and microeconomic conditions of any evolving business, focus of negotiations is that suppliers are forging relationships to provide improved quality and services at minimal possible price, thus working as partners in the organizations’ growth story.
Pitfalls to consider when entering into supplier negotiations:
The type of negotiations team that the company should develop (i.e. key members):
Team should be developed for Technical and non Technical material requirements separately. Example- Large Equipment team, daily consumables and overhead materials team, IT Infrastructure and Software development team, HR Strategic team separately for Senior Management/ junior management/ Blue collared workers, Daily material purchase and administration team. Each headed by separate Head of Departments, reporting to a superior for overall Strategic Procurement Activities on a 3-5 year planning. It should be further followed by junior managers and Engineers/ Graduates, depending on their competency and education etc.
Financial outlook - the impact on financial results- Following can have a great good or bad impact, depending on how Procurement for a start up company is done:
Profitability Ratios, costs of goods sold may rise due to wrong procurement practices, decrease in net income due to higher COGS, return on equity could reduce in long and short term hampering business, asset turnover will reduce, current liabilities will increase and high debts will occur, can directly impact the Profit and Loss statements.
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