Texoil Negotiation Case Study

I had the pleasure of working with Sarah Senn for the Texoil negotiations. I was the Texoil representative, while Sarah played the role of the selling couple. We began by me questioning Sarah’s reasoning for retiring. She stated that the work commitment had become to distressing and that her husband had falling into bad health. What I wanted to understand with that question was if there was an opportunity to reduce the upfront cost of the station acquisition by offering a salaried position. My initial intentions were to close a deal for the service station for $375,000. However, those hope quickly disappeared when Sarah stated her target point. Sarah’s target point was $675,000, well above my $500,000 reservation point. This target point was the same as my BATNA. …show more content…
The station will be purchased for $480,000 and the station owners will work for Texoil at a salary of $40,000 annually after there year long boating trip for 4 years. This deal is not as buyer-friendly as the deal that I envisioned on my pre-negotiation plan. However, I did expect for a portion of the deal to be in the form of salary. I believe my pre-negotiation plans helped my performance. It allowed me to be much more flexible as far as the terms. Additionally, just contemplating what the negotiation would look like helped me to understand the process from both sides. I entered our negotiation with the expressed purpose of getting to know what Sarah valued most before I stated a price. For Sarah’s part, she was very well prepared. Her target point was well thought out. She stated that her valuations were based upon inventory, real-estate price, and projected future income for a 24-hour station. She expressed her values very succinctly. They desired to be fairly compensated for the business, see the station remain a high level of customer service, and take some time away. For the sake of cost-reduction, I could have been a lot more aggressive with the buying