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Presented by : Piyush Pallav
Saurabh Chaudhary
Sarvesh Dubey
Kapil Shrawat
Jitendra Kaswan Abhishek Dwivedi
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Topic of the Case Study- Negotiations between ElectricalEquipment Ltd. and Voltas Ltd.
Electrical Equipment Ltd (EEL) - Manufacturers of Flame-Proof Motors.
Voltas Ltd - Renowned Original Equipment Manufacturer(OMakers of Centrifugal Pumps.
The flame-proof motors coupled to the pumps - removes waccumulated in underground mines.
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1) Flame-proof motor- Maker - EEL, Cost - Rs. 50,00Specifications - 40HP, 1400rp
Used in - Underground Minin
- Designed to avoid explosions when inflammablegases come in contact with a spark.
2) Centrifugal Pump - Maker - Voltas Ltd
Used in - Underground Mining
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- FROM EEL -
(1)Suresh Kumar- Regional Marketing Manager - Eastern Reg(RMM-E) of EEL.
(2)Pradeep Das Gupta - Sales Engineer , EEL - Kolkata.
- FROM VOLTAS -
(1)Murli Bhasin - General Manager ( Materials ) of Voltas Ltd
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Voltas acquired order for 10 pump sets from Eastern Coalfields at acompetitive 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 ordfor EEL.
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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 peroffered by EEL. Mr. Bhasin agrees.
Mr. Bhasin demands for additional 15% discount instead of 12% boffered.
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Basis VOLTAS EELDelivery to commence 4weeks 6 to 7 weeks
Delivery completion 8 weeks 8 weeks
Penalty o.5 % per week o.5 % per week
Freight borne by EEL Accept ( additional coof 3 -4 per cent)
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Basis VOLTAS EEL
Motors per week 2 or 3 per week All 10 in truck load toavoid damage
Warranty accept 12months from date otallation or 18 monthsfrom date of dispatch
whichever is earlier
Discount 15 percent 12 percent
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The EEL Team discuss and decline offer - thinking Mr. Bhasin migbe 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 otherstrategy could have worked.
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Negotiation is a process that tries to maximize the benefit to bo
buyer and seller
Mr. Kumar adopted a passive-balanced strategy.
Business with Voltas important for EEL. Hence, allowed them soconcessions.
Provided discretionary 12% discount too.
Although, could have taken a more dominant position.
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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 compr
on price.
Could have explained the benefits of dealing with EEL to Mr. Bha
Competitors might not offer even this much discount.
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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. Hencecould demand.
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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.
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THANK YOU !!