Presented by :

Piyush Pallav
Saurabh Chaudhary Sarvesh Dubey

Kapil Shrawat
Jitendra Kaswan Abhishek Dwivedi

 Topic of the Case Study - Negotiations between Electrical

Equipment Ltd. and Voltas Ltd.

Electrical Equipment Ltd (EEL) - Manufacturers of Flame-

Proof Motors.

Voltas Ltd - Renowned Original Equipment Manufacturer(OEM).

Makers of Centrifugal Pumps.

The flame-proof motors coupled to the pumps - removes water

accumulated in underground mines.

1) Flame-proof motor - Maker - EEL, Cost - Rs. 50,000 Specifications - 40HP, 1400rpm Used in - Underground Mining
- Designed to avoid explosions when inflammable gases come in contact with a spark. 2) Centrifugal Pump Maker - Voltas Ltd Used in - Underground Mining

- FROM EEL (1) Suresh Kumar - Regional Marketing Manager - Eastern Region
(RMM-E) of EEL.

(2) Pradeep Das Gupta - Sales Engineer , EEL - Kolkata.

- FROM VOLTAS (1) Murli Bhasin - General Manager ( Materials ) of Voltas Ltd.

 Voltas acquired order for 10 pump sets from Eastern Coalfields at a

competitive price.

EEL - already sent quotation for supply of 10 flame-proof motors.

Competitors for EEL - Siemens, ABB and Kirloskar.

Volume Discount - 20% on basic price

Maximum Discretionary Discount offered - 12%

Supplier-buyer relationship would play a key role in bagging the order

for EEL.

AT THE MEETING
Mr. Bhasin comes straight to the point - The Price. Demands for weekly delivery of 2-3 pumps from 4th week,

completion in 8 weeks. Mr. Kumar disagrees.

12-18 months warranty, free after sales service for the same period

offered by EEL. Mr. Bhasin agrees.

Mr. Bhasin demands for additional 15% discount instead of 12% being

offered.

Basis Delivery to commence Delivery completion Penalty Freight borne by

VOLTAS 4weeks 8 weeks o.5 % per week EEL

EEL 6 to 7 weeks 8 weeks o.5 % per week Accept ( additional cost of 3 -4 per cent)

Basis

VOLTAS

EEL

Motors per week Warranty

2 or 3 per week accept

All 10 in truck load to avoid damage 12months from date of ins tallation or 18 months from date of dispatch whichever is earlier 12 percent

Discount

15 percent

 The EEL Team discuss and decline offer - thinking Mr. Bhasin might

be lying.
Meeting ends with Bhasin informing that they will negotiate with

competitors, result in 3-4 days.

Order important for EEL. The EEL team wonders if any other

strategy could have worked.

 Negotiation is a process that tries to maximize the benefit to both

buyer and seller

Mr. Kumar adopted a passive-balanced strategy.

Business with Voltas important for EEL. Hence, allowed them some

concessions.
Provided discretionary 12% discount too.
Although, could have taken a more dominant position.

Mr. Kumar gave in too much too soon.

Rather, he could have been compromised with freight charges. Could have explained the services they were offering as a compromise

on price.
Could have explained the benefits of dealing with EEL to Mr. Bhasin. Competitors might not offer even this much discount.

 Style of negotiation - I WIN - YOU LOSE Straight away took control of the meeting - Dominant stance. Manipulated terms and conditions under pretext of stiff price

competition.
Put forth only their conditions. Did not consider EELs.

Voltas - Reputed Company. EEL might need their business. Hence, could demand.

 Mr. Kumar was right in allowing only 12% added discount. Demand from Voltas was unrealistic.

12% discount - Win-Win situation for both parties.

Both companies working on thin margins. Hence the 12% was

appropriate.
Although business with Voltas desirable - 15% would be stretching

too much. Hence, correct impression provided.

THANK YOU !!