Reflection Paper: Texoil (from the point of view of the sellers)
Planning for this negotiation was more difficult than the first negotiation in class. The first negotiation had a point system; therefore I knew what the maximum, minimum and average amount points were. Not only does the Texoil negotiation not have a point system, but there were two people on my side (sellers) and only one on the other side (buyer).
My partner and I played the roles of the sellers. Prior to the negotiation we discussed what our reservation point, our BATNA and our target point were going to be. The reservation point was basically given in the write up of the case. We needed $488,000 after taxes or $580,000 before taxes. If we received less than this we would not be able to continue our plans to sail around the world. At this point we had not discussed attempting to make the pie bigger and pursuing the option of working when we return.
We decided that we would not tell the buyer about my exhaustion (wife) or that we needed the money to sail around the world. We were afraid that he would use it against us.
Our BATNA was that we could continue working there, perhaps hire someone in place of me, since I am not supposed to work 16 hour days. This is not a strong BATNA, as I do not know that we could afford to hire a new person, as well as we already sold our condo, and put money down on the boat. Also we could try to negotiate with BP, who has offered $400,000.
Originally, the target point was set at $850,000. We decided that this would be a good starting price since it would cost them $650,000 to buy land and build, we had loyal customers
(especially if the station keeps its name), and the buyers could easily stay open 24 hours a day as well as open a convenience store. In addition, if they built a station they would be only adding to the competition, instead of three stations, there would be four.
We also decided that we wanted the buyers to make the offer first. We did not want to be an under aspiring negotiator and end up with the winners curse. On the other hand, we did not want to put a number that was so outrageous, that they would leave the negotiation immediately.
The beginning of the negotiation mostly consisted of the three of us getting to know each...