International Business Negotiations: Sat-Store Case

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Abstract

Developing negotiation skills, together with business acumen, in an international context is a valuable asset for managers, particularly given the diversity in cultures and variability of government investment policies encountered by business people worldwide. In this context, Sat-Store, a multibrand Canadian retailer, is keen to invest in the ever-growing middle-class market of India. After conducting extensive research, it became apparent that Sat-Store needs to negotiate with a local team of officials in six areas—size of city, foreign direct investments (FDI), insourcing, supplier size, management control, and remittance of profit in U.S. dollars—in order to obtain an FDI permit. As a result, the Sat-Store negotiating team prepared a set of parameters relating to the six areas within which the members could negotiate, walk away, or request a break to meet again. To be successful at the negotiation, the team will be asked to score a minimum total of 10 points in all areas, meaning it could lose points in one area but gain in others. However, the local team has its own score that they are asked to achieve. The negotiation is realistic and intense but also interesting and engaging. Students will gain experience in applying the theory of negotiations (position- and interest-based), develop the best alternative to a negotiated agreement, and land in the zone of possible agreement.

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