Preparation for the negotiation with Flagship Airways
1. Foundation
-Mandate
Eureka : P. Stiles, General Manager of Commercial engine operations
Flagship : S. Gordon, VP of Finance
Both Stiles and Gordon have full authority from respective companies to reach an agreement.
2. Factors
-Actors
Eureka : P. Stiles, General Manager of Commercial engine operations L. Atehison, VP of Product Development A. Delling, VP of Finance
Flagship : S. Gordon, VP of Finance L. Ross, VP of Product Dvelopment A. Delling, VP of Finance
Japanese government
The U.S. government
-Context
Political situation, Trade conflict between Japan and the U.S. in 80’s
There was a political negotiation with …show more content…
(Upgrade offer)
-Obtained $150 million of 100 engine kits from Eureka for free of charge with the original contract.
-Engine kits contain four parts, fans, compressors, frames and new LT turbine.
3. WIN from my position as A. Delling, VP of Finance at Eureka
Wish
To keep the original contract of $1billion is his wish. Euroka can make profits of 20% ($200). Even after the concession of 100 engine kits worth $150 million, there will be $50 million left. Company can put the profit to development costs for a new turbine and new engine. It will contribute to increase sales to other customers.
Interest
He would like to restructure the deal in order to reduce the cost of development. The new LT turbine has cost Eureka $50 million to develop but not been ready to market. Similarly, the C-323 engine has cost $25 million and still not been ready to use. To make an agreement to provide C-323 became a risk. As the JX5 engine costs no development cost, he would like to exclude C-323 from the new agreement. He also wants to remove LT turbine from the upgrade …show more content…
If they go to the situation that they need to scrap the agreement, it will cost a lot of money as the agreement affects the internal structure of the company such as human resources and development cost.
6. Prioritized interest
For Euroka, it will be important how they keep the profitability and reduce the development cost.
REFERENCES:
Johnston, E. (2009, January 9). Lessons from when the bubble burst. Retrieved February 10, 2016, from The Japan Times: http://www.japantimes.co.jp/news/2009/01/06/reference/lessons-from-when-the-bubble-burst/#.VrwdSTbvXdk
Nanto, D. K. (2009, October 2). The Global Financial Crisis: Analysis and Policy Implications. Retrieved February 10, 2016, from Congressional Research Searvice: https://www.fas.org/sgp/crs/misc/RL34742.pdf
Satake, M. (2000). Trade conflicts between Japan and the United States over market access; the case of automobiles and automotive parts. Retrieved February 10, 2016, from https://digitalcollections.anu.edu.au/bitstream/1885/40449/3/pep-310.pdf
Los Angels Times. (1985, December 27). All Nippon Airways to Buy 15 Boeing Jets : 767 Edges Out Airbus for $1.8-Billion Contract. Retrieved February 10, 2016, from Los Angels Times:
1. Foundation
-Mandate
Eureka : P. Stiles, General Manager of Commercial engine operations
Flagship : S. Gordon, VP of Finance
Both Stiles and Gordon have full authority from respective companies to reach an agreement.
2. Factors
-Actors
Eureka : P. Stiles, General Manager of Commercial engine operations L. Atehison, VP of Product Development A. Delling, VP of Finance
Flagship : S. Gordon, VP of Finance L. Ross, VP of Product Dvelopment A. Delling, VP of Finance
Japanese government
The U.S. government
-Context
Political situation, Trade conflict between Japan and the U.S. in 80’s
There was a political negotiation with …show more content…
(Upgrade offer)
-Obtained $150 million of 100 engine kits from Eureka for free of charge with the original contract.
-Engine kits contain four parts, fans, compressors, frames and new LT turbine.
3. WIN from my position as A. Delling, VP of Finance at Eureka
Wish
To keep the original contract of $1billion is his wish. Euroka can make profits of 20% ($200). Even after the concession of 100 engine kits worth $150 million, there will be $50 million left. Company can put the profit to development costs for a new turbine and new engine. It will contribute to increase sales to other customers.
Interest
He would like to restructure the deal in order to reduce the cost of development. The new LT turbine has cost Eureka $50 million to develop but not been ready to market. Similarly, the C-323 engine has cost $25 million and still not been ready to use. To make an agreement to provide C-323 became a risk. As the JX5 engine costs no development cost, he would like to exclude C-323 from the new agreement. He also wants to remove LT turbine from the upgrade …show more content…
If they go to the situation that they need to scrap the agreement, it will cost a lot of money as the agreement affects the internal structure of the company such as human resources and development cost.
6. Prioritized interest
For Euroka, it will be important how they keep the profitability and reduce the development cost.
REFERENCES:
Johnston, E. (2009, January 9). Lessons from when the bubble burst. Retrieved February 10, 2016, from The Japan Times: http://www.japantimes.co.jp/news/2009/01/06/reference/lessons-from-when-the-bubble-burst/#.VrwdSTbvXdk
Nanto, D. K. (2009, October 2). The Global Financial Crisis: Analysis and Policy Implications. Retrieved February 10, 2016, from Congressional Research Searvice: https://www.fas.org/sgp/crs/misc/RL34742.pdf
Satake, M. (2000). Trade conflicts between Japan and the United States over market access; the case of automobiles and automotive parts. Retrieved February 10, 2016, from https://digitalcollections.anu.edu.au/bitstream/1885/40449/3/pep-310.pdf
Los Angels Times. (1985, December 27). All Nippon Airways to Buy 15 Boeing Jets : 767 Edges Out Airbus for $1.8-Billion Contract. Retrieved February 10, 2016, from Los Angels Times: