Quick-Drying Paint Licensing Negotiation Case Solution
Introduction to Amazon
Amazon is a leading and valuable US based multinational technology company which was initiated as an online bookseller, but then it started to engage in selling digital content and merchandising in more than 30 categories, which include streaming music & video,electronics, clothing, books & furniture. Amazon is considered as the most customer centric organization on the Earth due to secure & easy interface for customers to make their first online purchase.
The continued growth and success of the company as a technology firm is primarily based on three big ideas i.e.be patient, invent and putting the customer first. The appetite of the company for experimentation led to the introduction of Amazon Web Services in order to provide the cloud computing services to the external consumer base. Through Amazon-basics, the company offers quality & value on everyday products delivered to customer.Being working in e-Commerce industry, the company stressed the significance of customer loyalty and satisfaction as compared to its counterparts. The company offers overnight delivery, returns and free shipping, focus on picture of products and exact product information(killian, 2015).
Factors-making SRM of Amazon successful
The company has been working for the purpose of establishing the greater control over its supply chain capabilities and network. Additionally, the company puts major emphasis on creating the supply chain for the huge variety of products in efficient manner due to which it intended to make investment in the supply chain centric strategies which includes smart warehousing, fulfillment by amazon and shipping from large suppliers.
Indeed, the company is catering to the diverse needs of the customers in delivery, product and price has helped to shape its supply chain management (Robinson, 2010). The supply chain management approach of Amazon is to embrace technology. Amazon tend to utilize the robotic solutions and countless automation, both to pick and pack orders as well as storing and stacking inventory. Such tools not only up the delivery speed and efficiency of the company but also cut down staffing and warehouse costs – freeing up funds for supply chain needs and other logistics (JOHNSON, 2020 ).
The factors which makes the supplier relationship management successful are as follows;
Culture of inclusive and diversity
The company is committed to the supplier diversity and inclusion and includes diverse suppliers to enhance the value of the supply chain. The company is focused on supporting the candidate by matching interests and skills and supporting the transition by providing coaching and mentoring. The supplier diversity is the part of the company’s efforts to retain the supplier and build long-term and positive relations with them (Alexis Bateman, 2020).
Improved communication and collaboration
Even though, the setting for communication and collaboration is complex, but provided an opportunity to Amazon to strengthen its relationship its suppliers. The company integrated effective techniques of communication that has helped developed strong relationships with its suppliers by improving risk-management, promoting trust as well as supporting long-term goals and objectives.
Create transparency through technology
Furthermore, the company creates the transparency through technology, thus strengthening the supplier relations to greater extent. The combination of the extensive network of warehouses, sophisticated information technology,excellent transportation and multi-tier inventory management makes the supply chain of Amazon the most efficient among all major firms in the globe. The company have established-favorable and long-term-relations with suppers with the intent to ensure efficient processes and quality services. In doing so, the company is known for having a strong and touchy-feely relationship with suppliers or vendors(LEBLANC, 2019).
The supply chain strategy of Amazon should be responsive and cost-effective. The company is recommended the continuous improvement in the process along with putting major emphasis on bargaining with the suppliers. The continuous investment in the technology would help Amazon capacity and capability. Additionally, the company’s management should be committed to the task of decreasing the cost and increasing the profitability. It should also integrate the flow of information with the speed and quality of the physical delivery.
In addition to this, the company should co-operate with partners for the purpose of developing the multi-tier inventory system, which in turn would make it easy for Amazon to offer consumer unlimited products and services. Developing the effective network of distribution would provide the ability to the company to deliver products in accordance with the scheduled deadline which would reflect the high responsiveness of company to its customer base. Moreover, the company should implement the metrics for measuring the performance and productivity of suppliers. Hence, Amazon is advised to ensure that the supply chain system merges operational excellence with data-driven and multi-functional decision making &strong analytical capability.
Despite having a number of options to enter into the agreement with Sam – operator of largest wholesale business in Southern Arizona, USA – Carlos is recommended to develop the quick-drying paints on his own. It is because of the reason that he is innovative and could make improvements in the process once he get to know how it works.
Involvement of team and assign roles
Involving a team into the process of negotiation is of high importance as the members of the team would bring different strengths to the negotiation table.Carlos and Sam would be main parties and directly involved in the negotiation whereas there would be the indirect involvement of the senior valuable employees, business consultants, other experts as well as other stakeholders of both companies.The negotiator should have various skills such as negotiating experience, negotiation skills, professionalism, excellent oral communication skills, analytical ability and knowledge of the issue. The stakeholders of the company would be accountable to lead the opinions, gather information and analysis, provide technical support, participate in the search for views on possible outcomes, and so forth. Thus, the training of the negotiator should be done to get the entire team on the similar pitch while negotiating with other party which could only be done through effective planning and training.
Objectives and expectations from each side
The objective of negotiating a five year term for the license agreement would be to share the profits that would be generated by selling quick-drying paints. From the licensor side, the objective would be to generate profits on selling quick-drying paints, utilize the distribution network of licensee and access to new markets whereas the objective of the licensee would be to share improvements with Sam as he is not innovative and no improvements have been made by him in the process. Furthermore, the objective of Carlos would be to make the payments of royalty to Sam in the currency of Mexico with core consideration of avoiding the frequent bank charges. Moreover, he would be much concerned about expanding the capacity by reaching to new cities of the state.
Negotiation tactics and strategies
There is a likelihood that the counterpart would use competing negotiating strategy with the goal of getting maximum benefits from the negotiation. It is because of the fact that the Sam had developed the patent 12 years ago. Additionally, he is well known for his quick-drying paints and operates and owns largest wholesale paint business in US.
On the other hand, there is a possibility that the counterpart would be using problem-solving negotiation strategy ion account of the fact that Sam has been engaged in partnership with Carlos and he has in-depth knowledge and understanding of the market dynamics along with the potential to expand the manufacturing capacity to meet the expected demand of quick-drying paint…………………
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