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9 Cards in this Set
- Front
- Back
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From a buyer's perspective, outline the impact of FOUR different market structures on commercial negotiations (20 marks)
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p 131 chapter 8
- Perfect Competition- - Monopolistic competition - Oligopoly - Monopoly |
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Outline the risk that exchange rates present when negotiating for an international purchase (5 marks) |
-risk in international sourcing has to identify who bears the risk and how it can be shared
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Discuss resourcing considerations when organising a negotiation with an external organisation
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-Room
-IT -People -Facilities -Finance May include a number of aspects such as room, people, IT, timing, location/facilities, finance, etc.Good answers included a discussion either of 5-6 of these or a more detailed discussion of 2-3 resource considerations, eg,people and location/facilities |
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Explain the importance of setting objectives and defining variables when preparing for a commercial negotiation.
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-SMART objectives
-LIM framework -Relationship strategy |
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Identify THREE macro-economic factors and explain how each can influence a commercial negotiation. |
Inflation = affects suppliers cost and prices, price escalation might be required Employment levels = availbiltiy of labour costs and disposable income of demand Exchange rates = risk for international sourcing, imports more expensive p.135 This question had many good answers which identified relevant macro-economic factors and provided good descriptions of their potential effects on negotiation. However, there was quite a large number of weak answers. The main problems in the weaker answers were that some answers described micro-economic factors (rather than macro-) such as an organisation’s profitability or the influence of trade unions on a particular industry.The problem with such points is that macro-economic factors relate to the country’s economy (or even the world economy) whereas micro-economic ones only relate to a specific organisation. Thus, answers focusing on micro-economic factors such as the organisation’s profitability were not rewarded with any marks.Some answers just gave an identification and explanation of macro-economic factors without relatingthemto commercial negotiation. This approach would not gain a pass mark. A relatively small number of answers used PESTLE/STEEPLEfactors as a basis but these relate more to micro-economics than macro-economicsbecause they focus on an individual organisation and its commercial situatio |
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Suggest FIVE sources of information on macro-economic factors. |
p.52 -Forecasts -Financial reviews -Finanical markets e.g. exchange rates -Websites and information services e.g. Chamber of Commerce -Macro economic analysis, Gallup Examples of such sources would be data published by financial markets; on-line analyses; information published by financial media; data published by financial institutions and analysts and published economic indices such as the UK Retail Price Index.‘Ordinary’ media such as newspapers and TV/radio were acceptable |
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Explain, using examples, how a purchaser might define the variables required when preparing for negotiation. |
p.143
Price = price review mechanism, terms of payment Delivery = delivery times, LIT Contract = use of subcontractors, dispute resolution |
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Explain how a purchaser might establish a range of acceptable positions for the negotiation of variables.
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- Use MIL framework
- Put the above variables into Must, Intend, Like to acheive p.145 |
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Explain FIVE sources of information that a buyer might use to understand micro economic factors that affect negotiations.
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-buyers own database
-trade confrences -industry magazines -suppliers financial accounts -meet the buyer events -competitors -online market exchanges p.124-5 |
