Friday, March 25, 2011

Negotiations With The World’s Largest And Most Powerful Retail Giant.

HBS Cases: Negotiating with Wal-Mart

Sarah Talley’s Key Negotiation Principles
When you have a Problem when there is something you engage in with Wal-Mart that requires agreement so that it becomes a negotiation, the first advice is to think in partnership terms, really focus on a common goal, of getting costs out. Ask questions? Do not make demands or statements. When the relationship with Wal-Mart is truly a partnership, negotiating to resolve differences should not endanger the tenor of the partnership.
Be problem solvers instead gripers.  Approach Wal-Mart by saying, “Let’s work together and drive costs down and produce it so much cheaper you don’t have to replace me, because if you work with me I could do it better.”
Learn from and lobby with people and their partners who have credibility, and with people having problems in the field.
It’s hard to negotiate with a company that controls your company.  Deicide, never to let any company, including Wal-Mart become more than (20%) twenty percent of your company’s business.
Speak clearly on each issue large or small.
Go into a meeting with a clear specific agenda. Make good use of, show time, the buyers’ face to face time. Bring underling issues to the surface.  Leave with clear answers. Get your point across; remember their time is valuable. Define clearly the challenges and seek solutions face to face.
Communication and compromise are keys; you needed to treat the relationship with this Powerful Company as a marriage. Another company is always willing to do the job cheaper to gain the business.
Most young buyers are very ambitious. The young executives are tough, efficient and the most educated buyers you will encounter. Know your product all the way form the production standpoint to the end use. The young executives will know the product in and out; therefore you must be even more knowledgeable.
Executive Sarah Talley at 19 in 1997 began a majestic task of negotiating with the huge and powerful retail giant Wal-Mart. Executive Sarah Talley wanted to supply the Wal-Mart with pumpkins and water melons from the Frey Farm Produce at a fair market value. Wal-Mart, the huge and powerful retail giant, drove a stiff, hardball confrontation concerning price. Wal-Mart negotiates a price that would diminish Ms. Talley’s profits below the comfortable levels.
Executive Sarah Talley became a quit study and matched the Retail Giant skills with negotiation by redefining her position. She would offer customer development, relationship, and sales as priorities which would cause price to naturally be aligned.
Wal-Mart, the world’s largest and most powerful retail giant, has a single-mined focus on “EDLP” (everyday low prices) and the power to make or break suppliers, a partnership with Wal-Mart is either the Holy Grail or the kiss of death.
P&G Executive Tom Muccio with skill and passionate determination pioneered a lasting supplier-retailer partnership between P&G and Wal-Mart. Built on proximity and growing trust. The partnership grew into a new relationship focused on establishing a joint vision and problem-solving process, information sharing, and customer development.

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