Week 7 (Negotiating in "Hopeless Situations")
PART A
Prepare: "Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A)" (HBS Case 9-907-003) (Available in Chalk)
Frey Farms is a relatively small vendor trying to establish a long-term relationship with Wal-Mart. We will discuss this case and try to identify effective strategies for dealing with these difficult negotiations.
Questions
1) Consider the 2005 Watermelon negotiation. What should Sarah Talley do?
2) What is co-management? How would becoming a co-managed supplier change the on-going negotiations between Frey Farms and Wal-Mart. What should Sarah Talley do to negotiate co-managed supplier status for Frey Farms?
3) Consider a company such as Procter & Gamble. Compared to Frey Farms, how can Procter & Gamble negotiate differently with Wal-Mart?
PART B
Beth Kreppein and Kim Castro the Chicago FBI will be joining us to discuss crisis negotiations. In particular, we will discuss the following case:
Roman Arroyo was kidnapped in Mexico in May of 2011 and held captive for 18 days in a remote mountain in Mexico. The kidnapers initially demanded $4 million from Roman’s family in Chicago. We will present the daily negotiations the family had with the kidnapers via telephone with coaching by the FBI Chicago Crisis Negotiation Team. We have telephone calls we can play, but the conversations were in Spanish (another hurdle the Chicago negotiators had to deal with), so we will not play all of them. Throughout the ordeal, there were choices the family had to make in dealing with the kidnapers and we will open it up to your class to see what they think should be done and why.
Questions
1) Suppose that you are a family member of Roman's. Come up with a general strategy for approaching this delicate situation. What do you see as the major risks and opportunities? How do you expect the negotiation to unfold over time?