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• 5.3.3 Should you make the first offer? • Yes, if you wish to take the initiative and
set the tone of the discussions. In numerous studies sellers making a first offer have been found to achieve higher negotiated prices than buyers making first offers. Making the first offer anchored the negotiation in the favour of the sellers.
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• 5.2.3 Forms of offer • (1)Oral offer • (2)Written offer • (3)Combination oral and written offer
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5.3Strategies for making offers
• 5.3.1Getting your first offer ready • For every negotiation you plan to enter, your
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Thanks!
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• 5.2.2 The basic conditions of an offer • (1)The offer shallபைடு நூலகம்be made to one or more
specific persons • (2) Contents of the offer shall be
sufficiently definite • (3) Time of validity or duration of offer
Near the conclusion of the Information Exchange, the focus changes from the other side back to our own sides. Negotiators stop asking the other party what it wants and begin to state what they must obtain or what they are willing to give the other side. At this point they enter the Distributive Stage.
initial offer should stand on its own merit within the prevailing context surrounding the discussions. Entering the negotiations under false pretences or unfounded premises can prove costly or result in deadlocks. Make your first offer competitive in the eyes of the other party and be ready to defend it with valid arguments.
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• 5.3.7 A defence against first offers
• When a negotiator does not have the opportunity to make the first offer, their protection against anchoring lies in making an aggressive counter - offer firmly based on the other party's BATNA, real base and aspiration base. The best way to present such an offer is in a way that creates a positive climate and blunts the other party's first offer. The key to protection lies in a negotiator knowing his / her aspiration base and the limitations of the other party.
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• 5.3.2 Don't be afraid to be aggressive How extreme should your first offer be? A research suggests that first offers should be quite aggressive but not absurdly so. Many negotiators fear that an aggressive first offer will scare or annoy the other side and perhaps even cause him to walk away in disgust. However, research shows that this fear is typically exaggerated. In fact, most negotiators make first offers that are not aggressive enough.
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• No, if you are not familiar with the market in which you are trying to do business. Making an offer without adequate information or a clear understanding of what the other side wants places you in a risky position. For example, having your first offer accepted means that you have underestimated the market.
L/O/G/O
International Business Negotiation
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Chapter5 Offer of international business negotiation
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Teaching Objectives
After studying this module, you should be able to know:
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• 5.3.7 What should you do if your first offer is rejected?
• React positively. A rejection should be regarded as the beginning of the negotiations, not the time to make concessions or take a defensive attitude.
• 1.What are inquiry and offer； • 2. Forms and basic contents of offers • 3. Strategies for making offers • 4.Who should make the first offer and defence
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• 5.3.4 Should you open high?
• Yes, if you can justify the level of your offer. At this early phase of the discussions, any objections to your high offer should be dealt with through questions, not by making concessions. Your best approach to objections is to find out which part of your proposal is acceptable and which elements are considered objectionable. Only by acquiring this additional knowledge will you be in a position to justify your initial offer or eventually make a counterproposal.
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• 5.3.5 Should you make a low offer?
• Yes, in special situations. Skilled negotiators may make a low initial offer, near the bottom line — not so much to get the business, but to be invited to the negotiations. In some industries and markets, your product is sold at a going price and at predetermined conditions, leaving you with little choice in setting your opening offer. When facing strong competition, your offer should be more or less in line with theirs.
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• 5.3.6 How a first offer should be constructed • Although it is clear that first offers should be strong,