1. What are the issues in the upcoming negotiation?
• The price that the Magnetic Advances division is willing to pay for the rights to Z-25 is one of the main issues in this negotiation.
• Another issue is to whom Magnetic Advances is allowed to sell to, if we at Audio Components decide to sell the rights. Whether they are allowed to sell to Audio Components competitors specifically or El-Tek competitors as a whole. These prohibitions are key value drivers in any potential deal. This is to gain value from the competitive advantage of having the new Z-35 technology in our products.
• A sub-issue of the previous selling prohibitions issue would be for how long the Magnetic Advances division is willing to abstain from selling to the previously mentioned parties.
• Audio Components would be able to sell the product internally over two years for incremental profits of $5 …show more content…
We could gain a lot of value in this agreement if the Magnetic Advances division were to agree not to sell the Z-35 technology to any of our division’s direct competitors, as well as competitors of El-Tek as a whole.
Keeping an amicable and cooperative relationship is a very important issue in this case as well because as I mentioned before a large deal of the Audio Components products require parts from the M.A division. This issue is really intertwined with all of the mentioned issues because if this negation does not go well, it could sour relationships with a very important supplier.
Recouping the development costs is also very important to the success of this case. Ultimately there should be no option in this case that would allow our division to walk away without recouping these costs. This issue is connected to the overall price of the rights as these costs would be included within that
• The price that the Magnetic Advances division is willing to pay for the rights to Z-25 is one of the main issues in this negotiation.
• Another issue is to whom Magnetic Advances is allowed to sell to, if we at Audio Components decide to sell the rights. Whether they are allowed to sell to Audio Components competitors specifically or El-Tek competitors as a whole. These prohibitions are key value drivers in any potential deal. This is to gain value from the competitive advantage of having the new Z-35 technology in our products.
• A sub-issue of the previous selling prohibitions issue would be for how long the Magnetic Advances division is willing to abstain from selling to the previously mentioned parties.
• Audio Components would be able to sell the product internally over two years for incremental profits of $5 …show more content…
We could gain a lot of value in this agreement if the Magnetic Advances division were to agree not to sell the Z-35 technology to any of our division’s direct competitors, as well as competitors of El-Tek as a whole.
Keeping an amicable and cooperative relationship is a very important issue in this case as well because as I mentioned before a large deal of the Audio Components products require parts from the M.A division. This issue is really intertwined with all of the mentioned issues because if this negation does not go well, it could sour relationships with a very important supplier.
Recouping the development costs is also very important to the success of this case. Ultimately there should be no option in this case that would allow our division to walk away without recouping these costs. This issue is connected to the overall price of the rights as these costs would be included within that