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Hardy's Wine- Negotiation

In: Business and Management

Submitted By kostics
Words 864
Pages 4
QUESTION 1:
Christopher Carson initial offer does have many appealing factors to it.
We like that Carson is willing to commit to us for at least 5 years. However, 5 years does not seem that long a period of time if we are being asked to give up at least 50% of our best output.

Our current, and established, local market sales would suffer dramatically with such a deal. No longer could we use these quality grapes to supply our current local market. We have spent a lot of time (and money) cultivating an image and gathering a local following. By agreeing to sell a minimum of half our top quality grapes to Hardy’s, our ability to continue serving our local market would be hampered.

If we were going to be asked to jeopardize the groundwork and brand name we have cultivated so far we would have to insist on a minimum 10-year relationship. This will ensure that any loss we would suffer (in terms of branding, reputation, quality) would be made up by Hardy using our quality grapes to expand in to new markets and attract new consumers. A simple 5-year partnership could potentially benefit us in the short term. However, if Hardy decides to terminate the relationship after the initial 5 years we are left with a local market we have abandoned focus on. The gains made by Hardy in those 5 years would no longer benefit us either as our grapes would no longer be used.

In regards to output we would be willing to negotiate more than 50% of our output as long as Hardy was willing to ensure longer-term partnerships. The more grapes we sell to Hardy, the less we have remaining to use on our own brands and market. There could potentially be fantastic opportunities in new emerging markets Hardy would be exposing us to. However, if we are going to be asked to jeopardize so much output on our local market we would have to ensure that a long term gain (in new emerging markets)…...

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