Global Coffee Shop Company

Negotiation Exercise

Global Coffee Shop Company

You are the procurement manager for a global coffee shop company. You are in need of very specific high quality Arabica coffee beans from Latin America. You have traveled to Mexico to try to work out a deal with the head of a small coffee farm.

You must deliver the beans to the roaster within 60 days in order to make the deadline for the new blend your company is working on. You also have been told that you cannot spend more than $6/bushel. The fair trade value of the coffee is $5/bushel, and you cannot pay below that price.

You were just recently promoted to procurement manager and this is your first big project. You definitely do not want drop your first contract.

Please use any of the negotiating techniques to help secure your deal.

Negotiation Exercise

Small Coffee Farm

You are the owner of a small coffee farm in Latin America. Luckily for you the Global Coffee Shop Company has taken interest in your finest quality beans. The Global Coffee Company wants to pay fair trade value, which is around $5/bushel, for the beans and have them delivered to their roaster 60 days from now.

There are a few problems with this plan. You have done the calculations and believe that the fair trade value estimate is too low and that to break even you will need to sell your beans for no less than $9/bushel. You would like to make some sort of profit so you are offering your beans at $10/bushel. You can however offer them at a lower price if you can extend the deadline to 90 days.

Business has been slow this year and a contract with Global Coffee Shop Company is a once in a lifetime occurrence, so you are not willing to lose them as a client for any reason.

Please use any of the negotiating techniques or techniques from the strategic sourcing diagram to help secure your deal.