Assignment #3: Negotiations–
GBD 220 Global Procurement Management
Due: July 6
Read the Following Case and Please Provide Innovative Solutions Following Criteria Below You Will be Presenting this as a live negotiation in class
Imagine that you’ve saved some money and are at the stage in life where you want to buy a vacation home. You’re not looking for anything fancy, just a cabin in the woods, far from the city, where you can get away and relax. The real estate market in your area is soft, so you’re hopeful that you can find something reasonably priced. After thinking carefully about your baseline, you’re prepared to pay around $200,000, though exactly how much you’ll spend will depend on the particular place and how it compares with others.
On recent weekends, you’ve done some prospecting, meeting with real estate agents and looking at properties. These outings were enjoyable at first, but now you’re discouraged. Everything that you’ve liked costs at least $250,000, sometimes more. Even if you negotiate well, a decent place may be beyond your budget. You may have to put this plan on hold.
But on your latest excursion, you spot a hand-painted sign, For Sale by Owner – Inquire Within. You slow down and turn into a gravel driveway. There it is: a well-maintained cabin nestled among tall pines. Off to one side is a glistening pond.
The elderly owner shows you around the place. You accept her invitation to sit down for tea and listen politely to the story of how her family built the cabin almost fifty years ago. You also talk about politics, the latest books, and even sports, yet there’s been no mention of price. You’re careful about spending money, but this place is by far the best you’ve seen. Maybe you should stretch your budget.
The owner finally broaches the topic and says, “It’s always awkward to talk about money, I know, so I hope you won’t be offended if I’m asking too much.” It turns out that she is moving back to the city to be closer to her grandchildren. The cost of living is higher there, so she’ll need to get every penny that she can garner from this sale. That’s why she’s not using a broker.
You brace yourself for a number that’s way out of your price range. But then you’re shocked when she asks only $180,000. As you know from looking at other properties, this figure is way under market value.
How do you respond?
Whatever you decide, there’s no downside. You can draft a simple offer to purchase that gives you complete protection if there’s any problem which legal title to the property or its physical condition. Likewise, you can write a small, fully refundable check to secure the deal. Now taking all that into account, how would you respond to the owner’s $180,000 price?
Headings must be clearly identified in your report as per the Grading Rubric Below. Respond to Each Heading on the Grading Rubric Below. All Headings must be answered (beware the total marks for each heading and answer accordingly). Do Not Add or Changing Headings.
Your written report:
1) Week 9
2) Be written in 12 pt. Times Roman font.
3) Answer questions mentioned above but not limit the ourself to them.
4) Tackle this real case creatively and realistically.
5) Follow the Rubric – Executive Summary, Problem, Situation, Response, Alternatives, Recommendations, Implementation
6) Worth 15% of your Final Grade
Tips for Case Analysis Work
1. Cases in general
• Cases teach not only knowledge about a subject but also how to apply the knowledge learned in courses.
• Cases are based on real-world business situations, bringing, thus, a sense of reality to the classroom.
• Cases encourage risk-taking and learning from mistakes in a setting where risk is lower than in the business world.
• Students are responsible for learning from cases by being highly active, not reactive or passive.
• Students who rely on their classmates or instructors for the -answer-, deny themselves the primary benefit of the case method, doing the critical thinking necessary to reach the answer.
• Students learn to grapple with -messy-, unstructured problems where they often lack all the information needed to make decisions.
2. Specifics on cases
• Identify and state the problem in a short paragraph.
• Identify the real problem in addition to the apparent problem or symptoms.
• Limited information and gaps usually exist, make reasonable assumptions when needed.
• Always deal with the time that the case is written in.
• Use numbers to support your analysis where appropriate.
• Do not limit yourselves to the specific questions stated at the end of some of the cases.
• Be conclusive; precise; specific
• Be objective
• Avoid colloquialism
• Simplify the complex
• Treat hand-in cases the same way you would treat a report to your boss. Respecting deadlines and submitting a quality report are absolutely mandatory.
Be sure that references are cited in text and are included in a Works Cited page (APA style)-To Review:
• GBD220 Course
• APA Tutorial (English) Tab
Assignment #3: Negotiations–