Batna Case Study Solution

A long-term supplier has begun to supply chips to the organization which are defective. The last shipment contained defects of 25%. While the organization has a contract, defective chips are costly this situation must be addressed yet it is also of great importance that the relationship be maintained.

Goals

The goal of the manufacturing company is to have the chip manufacturer provide top-quality chips as they manufacturer had done in the past. This shipment of defective chips received not only provided no value to our product but also proved costly. Therefore, we would like a form a restitution for the inferior products they shipped and the assurance that this issue will not continue with future shipments. In addition, it is an important

CHOICE #2 – MAINTAINING RELATIONSHIPS 4

Consequences of Winning or Losing Since we are in the position of power, our negative consequences would be minimal if we do not reach an agreement. Our BATNA is that there are many other chip manufacturers we can purchase from and our high volume need for chips make us a highly desirable to other chip manufacturers. If we reach an agreement we will continue a mutually beneficial positive relationship. None the less, the chip manufacturer has a significant contract to lose should the negotiation fail and the loss of our business would have a significant negative impact on their operations. If we reach an agreement it will result in a win-win scenario.

Your organization has consistently provided us with the highest quality chips, delivered on time in the quantity requested. Recently; however, we received a shipment of chips which was not at the same quality level as we have always received from your organization. In fact, 25% of this shipment was defective. As you might expect, these chips have adversely effected our manufacturing process and is the impetus for contacting you at this time.

Due to these defective chips our manufacturing process has come to an abrupt halt. In order to get our staff back on the manufacturing line and for us meet our customer deadlines we will require an immediate shipment of chips to cover the defective batch Elite Chip Manufacturing previously sent. Upon delivery of the new chips we would also like for your to pick up the defective chips. We would expect the cost of the new chips to be covered by the payment you previously received for the shipment of defective chips.

CHOICE #2 – MAINTAINING RELATIONSHIPS