1.0 NEGOTIATION PLAN/PREPARATION
1.1 Our company’s Interest and position in this negotiation 1.1.1 Interest
For Cobalt, Our Company has three main interests in this joint venture negotiation. Firstly, we want to increase PC market share in Korea because PC market is a high-profit industry and is developing with a high speed. Secondly, we want to access smoothly to Korea and get the Korea’s government favor and policy support. The last one is that we want to find an experienced Korea PC company to be a joint venture with a stable and a long-term cooperative relationship.
Our company’s position in this negotiation is an initiative negotiator and we decide to take an integrative and win-win attitude to this negotiation because our company’s aim is to build a long-term joint-venture relationship with SilverLight Electronics.
1.2 Our Company’s negotiation procedure, role and tactics 1.2.1 Procedure
Firstly, we plan to negotiate the most important issues to our company. Then we negotiate the next important one until all the seven issues will be negotiated into a decision. If both sides get stuck in a certain issue, we just move on to another one and back to negotiate that one in the next round.
We plan to be a positive and initiative negotiator.
18.104.22.168 Present conditions and requirements in the advance of opponent. 22.214.171.124 Win-win situation is the best agreement.
126.96.36.199 On the condition of no prejudice to the interest of the opponent, we should strive and negotiate for more benefit. 188.8.131.52 Do not make concession in the most important issues.
1.3 Desired outcomes
1.3.1 We can have above 51% equity ownership in JV.
1.3.2 We can maintain our top management committee in JV.
1.3.3 We can both have JV and Cobalt products into Silver Light’s network. 1.3.4 We can protect our core technology.
2.0 OUTCOME OF THE NEGOTIATION
Access to Korean Markets
The JV has access to all SilverLight’s networks.
Protection for your Technology
Share your notebook technology with SilverLight, negotiating a royalty fee. Financial Accounting Practices
Use both IASC and GAAP standards (two sets of book).
51% equity ownership for SilverLight
Top Management Team
CEO, Operations, R&D, and Finance from Cobalt; all others, SilverLight. Joint Venture Name
Cobalt identity as well as SilverLight identity in the JV name. Access to U.S. markets
JV access to Cobalt’s marketing and distribution channels
3.0 ANALYSIS OF THE NEGOTIATION
As might have been expected, my company and Silver Light both choose the equity ownership as the first issue to negotiate. Before negotiating this issue, I have gathered much information about Silver Light, and found that this company doesn’t have its own independent distribution and service network. It always depends on Chaebols in Korea. So this determines that I can’t use the general policy of 100% ownership in USA. On the other side, our aim is to form a JV, so I can’t make the ownership too high to receive it. So in the first round, I proposed that our company’s percentage of ownership is 51% and Silver Light owns 49%. Not surprisingly, the opponent rejected this proposal and argued that “we company should be responsible for the Korean public and the company’s shareholders. If we receive your proposal, we’ll face much pressure from the public, government and shareholders. We think we should reverse this percentage. ” But we company considered this reason wasn’t convincing and we still insisted our proposal. We debated with them that”Your company is lack of money and independent distribution and service network. And we company would provide our core technology and capital to you. We should have more rights to speak and to control in this JV. We have the reason to own more. ” then the opponent argued that if SE could get 51% or above, Korean Government would give our company a preferential policy and other...
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