THE UNIVERSITY OF DANANG UNIVESITY OF ECONOMICS REPORT BUSINESS PLAN WRITING ASIGNMENT Group 2 Lecturer Lam Minh Quan Members Nguyen Thi Kim Ngan Le Thi Bao Ngoc Vy Bao Ngoc Doan nguyen Minh T[.]
THE UNIVERSITY OF DANANG UNIVESITY OF ECONOMICS REPORT BUSINESS PLAN WRITING ASIGNMENT Group: Lecturer: Lam Minh Quan Members: Nguyen Thi Kim Ngan Le Thi Bao Ngoc Vy Bao Ngoc Doan nguyen Minh Tam Phan Thi Huong Tram Class: 46K01.2 Danang, 2023 Contents Company goals 2 Identify key issues 3 Identify benefits, BATNAS, resistance points of some issues: .6 3.1 About the price: 3.2 About the time of price increase: 3.3 About payment term: 3.4 About payment method: Partner Analysis Set your goal and suggest opening Assess the social context of the negotiation 6.1 Component 6.2 Negotiation context Present the problem to the other side I Build a Pre-Negotiation Process The company's goals The tangible objective of the enterprise is to reach agreement on quantity, product quality and price of pharmaceutical products imported from India to supply to the domestic market This goal is one of the most important negotiating goals, because it helps you to get the best possible import prices from your Indian suppliers and ensure the quality of your products This goal helps businesses reduce production costs and increase profits by purchasing raw materials at competitive prices, while ensuring product quality to meet the needs of domestic customers The invisible goal of the enterprise that wants to import Indian pharmaceuticals is to find strategic partners in India to expand the business network and strengthen the partnership This goal can be achieved by seeking and establishing reliable partnerships with suppliers, joint venture partners or other partner organizations in India Strategic partners can provide businesses with benefits, including access to local markets, local resources, business experience, and knowledge of local laws and cultures direction From there, businesses can take advantage of these benefits to enhance their competitiveness and grow their business in the Indian market This objective also plays an important role in building long-term and stable partnerships with Indian partners As a result, businesses can increase reliability and reduce risks in conducting business transactions and cooperation in the Indian market When looking for strategic partners in India to expand business networks and strengthen partnerships, enterprises need to consider the following issues in the contract to ensure that their goals are achieved: Identify key issues In order to achieve the objective of importing pharmaceutical products from India and supplying the domestic market, the following issues have been raised and considered in order of priority according to tangible goals: Price of the product: Negotiating a fair price for the pharmaceutical products is also crucial The contract should include the price, as well as the costs associated with transportation, packaging, and insurance Shipping costs: The parties need to agree on the cost of transporting the product from the factory to the customer's location This is a feature to select Incoterms, the responsibilities of the parties are determined Price: This is the most important issue in contract negotiation, the parties need to agree on a product price in accordance with the product's quality and competition in the market Price application time: The parties need to determine the time to apply the price on the contract, this helps to avoid the product price being changed during the contract performance Quantity of the product: The contract should specify the exact quantity of pharmaceutical products that the business needs to import from India to meet the demands of the domestic market Delivery time: The contract should also specify the delivery time of the products from India to the business's warehouse in Vietnam to ensure that the products can be provided to the market on time Delivery time: The parties need to make a decision on the delivery time in accordance with the needs of the customer Delivery time must be clearly and specifically defined in the contract Shipping conditions: The parties need to determine the shipping conditions of the product such as temperature, humidity, light, and other requirements to ensure that the product is not damaged during transportation Payment terms: The contract should clearly define the payment terms, such as prepayment, payment upon receipt, or payment by letter of credit Payment method: The parties need to make a decision on how to pay for the product or service provided Various payment methods are available, including bank transfer, credit card, cash, or other forms of payment The parties should ensure that the payment method chosen is appropriate to the business environment and to the payment regulations in that sector Remittance costs: The parties need to make a decision as to who is responsible and the costs involved in transfer funds for the payment These costs may include remittance fees, currency conversion fees, or other costs associated with transferor money across different countries Shipping conditions: The contract should define the shipping conditions of the products from India to the business's warehouse in Vietnam, including the shipping method, transit time, and shipping costs Quality management: The contract should outline the responsibilities of all parties involved in managing the quality of the products, including quality control procedures during the importation and supply process Issue: Regulations and testing standards: The parties may disagree on specific regulations and testing standards to be applied to the goods, which may include testing methods, sample quantities, acceptance criteria, and other requirements related to the product testing process These agreement may also relate to the reliability and recognition of the testing parties The parties may not agree on the method of error handling, compensation for damages, or retesting Testing methods: The parties need to make a decision on the testing method for the product This method must meet quality standards and be executed properly Responsibility and costs: An issue that often arises is determining who will be responsible for and bear the costs associated with product testing The parties may have the right to propose terms and conditions regarding cost-sharing for testing and administer that the responsible party testing performs that meets the agreed-upon standards and regulations Warranty conditions: The contract should specify the warranty period and conditions, including the warranty method and provisions for returns or refunds Issues: The seller disagrees with the warranty period and scope This may relate to the length of the warranty period, the scope of the warranty (including components, parts, or warranty services), and the conditions applicable to the warranty, which may include identifying factors that affect the validity of the warranty, such as improper use, unauthorized repairs, or violation of usage instructions Dispute over warranty scope and method of compensation: Parties may not agree on the scope and method of compensation and resolution of damages during the warranty period They need to determine the value of compensation, the scope of compensation, and the terms and conditions related to the resolution of damages Time for payment: The parties need to make a decision on the timing of payment for the product or service provided Payment times may vary depending on product type and industry regulations The parties need to ensure that the payment time is satisfactory and reasonable to avoid negotiation during the transaction Insurance: The cargo must be insured by an insurance company duly established and capable of covering all risks to the cargo Both parties may want to choose an insurance company that is favorable to their side (for example, this insurance company is familiar to them, this insurance company is located close to them, they are longtime partners with the insurance company, so they can receive incentives when using the service, ) so it is difficult to agree on the insurance company Insured Perils: Any risk of material loss or damage caused by external factors and including risks of violent war, riots and civil riots (for countries at risk wars, riots, high riots need to claim these types of insurance) Identify the benefits, BATNAS, resistance points of several issues: 3.1 About the price: Position (Needs): Reduce product cost per unit by 5% Benefits (Interest): o Reduce production costs for the company (buy input from partners for production) o The negotiation process is shortened because the company is in urgent need of raw materials Resistance point: The company's resistance point is at 0% to reduce the product cost because the goal is integration negotiation, so if it is not possible to negotiate the price issue with the partner, the company can use the solution Logroll method With this resistance point, we will be flexible so that both sides can gain maximum benefit BATNAs: o Offer to raise the minimum purchase amount, which means an increase in the number of purchases, at a lower price o Look for an alternative partner Sun Pharmaceutial Industrial Company provides API with the price of the first products as our needs, but the remaining product is not on the list of business items of this company This is also a good alternative when providing our company with a reasonable price, but when cooperating with this company, you will have to negotiate the purchase twice Company Dr Reddy offers all API products at a price that is right for our needs, but their production scale is still small, not able to meet our purchasing volume, it is necessary for them to grow the scale time (the company is in urgent need of raw materials) 3.2 About the timing of the price increase: Needs: Only make product price increases every months Interest: Helps stabilize costs for the company in the longer term (unless market prices drop) Resistance Point: Performed every months the price move up 3.3 About payment term: Needs: 30 - 60 days from the date of receiving the product Interest: Allowing buyers enough time to check the quality of the product before paying the seller Resistance point: 20 days from the date of receiving the product Payment days cannot be too short because businesses need enough time to use up all products in stock before receiving new shipments 3.4 About payment method: Needs: Use L/C payment method Interest: Helps to reduce payment risks, ensure the quality and quantity of goods as well as help control costs for buyers Buyer's preferred options: o Payment by receipt of documents: this is a fairly safe payment method, because the buyer will only pay the seller after receiving complete and accurate documents However, this method is not as secure as a letter of credit, because if the seller fails to meet the documentation requirements, the buyer will not be able to pay o Payment is guaranteed by bank guarantee: this is not recommended payment method, as the seller will only be paid when the requirements of the guarantee are met However, this method does not guarantee the buyer because if the seller fails to fulfill his obligations, the buyer will have to pay the bank Partner analysis Partner strength Is an Indian multinational pharmaceutical company specializing in the production of APIs, intermediates and nutritional ingredients Divi is a global leader in manufacturing APIs with top quality, is one of the best, is on the top list of top pharmaceutical companies Thus, the partner brings negotiating power with good quality, different from the market Partners' interests and needs Demand: Sell their pharmaceutical products at the advertised price Benefits: Selling at the right price to increase revenue for the business For the negotiators, their successful negotiation is like a win over their partner (because they negotiate in a split way) Partner's resistance point Resistance point: The partner's resistance point will be quite high, close to the announced selling price of 7%, because the counterparty wants a split type of negotiation, so they will want to maintain their maximum benefit In this case, we shouldn't pay a price so low that it might take them off the table Their alternatives BATNAs: We don't know the competitor's BATNAs well because we just started doing business in this market and it's not easy to access the partner's client file In addition, this is also an international company, so the number of customers who want to transact with them is really large, capturing their BATNAs will be very difficult Initial goal and proposal Objective: Increasing sales and growth is the main goal of the partner company To achieve this goal, companies focus on developing new products, improving the quality of existing products, enhancing brand promotion, expanding markets, and maintaining customer relationships now available Initial proposal: After having the first meeting with the partner, the two sides had discussions about the product as well as the product price ST Product name Unit price ($) first Capecitabine 640.02 Carbidopas 219.85 Levetiracetam 91.85 Naproxen 32.25 Nabumetone 22.47 T Composition and structure of the partner's negotiating team The negotiating team includes: Lead Negotiator: The person who represents the Indian side in the negotiation process The main negotiator is the person with high authority in the purchasing department, the purchasing manager Supporting Negotiator Team: Consists of people with certain expertise and skills to assist the lead negotiator in the negotiation process These people can be business experts, lawyers, translators, technical support staff, etc Reputation and negotiating style of partners This is a large-scale and professional company, so Indian partners often appreciate prestige in negotiations They consider the two sides must demonstrate mutual trust in order to reach a final agreement Therefore, they often place a high value on keeping their promises and fulfilling their commitments During the negotiation process, the counterparty often has a rather rigid style and tends to be consistent about his or her point of view They often make requests and suggestions clearly and firmly, and are often quite difficult to change their minds Strategies and tactics that partners often use They make it their goal to get the highest possible benefit in the contract or agreement To achieve this goal, they often employ strategies such as focusing on convincing their counterparty of the necessity of the terms they want to achieve, or finding weaknesses in the other's offer cooperation and use them to reach a better deal They also often use questions to learn about the partner's goals and requirements, thereby building an appropriate negotiation strategy Partners often have a fairly independent attitude and not like interference from third parties in the negotiation process They value self-responsibility and selfdetermination in the negotiation process However, they also promote fairness and integrity in the negotiation process, and often not accept agreements that lack transparency or are ethically questionable