The Influences of Power within a Negotiation

A negotiation can be defined quite quickly from looking at the balance of power during the two parties that are engaged in the negotiation. How you are perceived and the power you hold within those situations often affect and determine the outcome of those situations. Whether you are a small company to a major multi-billion dollar tech giant, the power within negotiations is the key component to really selling what you are offering. Steve Gates in his book, ‘The Negotiating Book’, explains seven factors that influence the power balance within a negotiation.

Dependance can be a crucial influence. How much do you need the people you are negotiating with? Does your business depend on it? Are they the only option offering the product or service that they are offering? Perception of the dependence of the other company on the security of the deal you are working on can alter and determine the offer that is willing to be agreed. For example, you are a clothing manufacturer, and you need to sell an overwhelming amount of stock. You are a sustainable brand, selling sustainable clothing and only Brand A can take your stock as the other chains and retailers have their own product lines. This means that if Brand A pull out of the deal you will be left with a lot of money lost and a lot of stock not being sold, so you really need Brand A. They will then be able to offer a deal that works more in their favour as they have the power to do so, because you are dependent on their side offering a deal.

Something that will always be a key influence in the power of negotiations, is the nature of the product/service that is being offered. Negotiating a price for a car from a car dealership is a very different negotiation style than trying to get a deal with a supplier to build new components for a new product you are manufacturing. The stakes are very different. One car in the dealership may have a tyre that needs replacing down the line, and barely affects the negotiation. However, if a material that is produced from one supplier is wrong, that means a lot of wasted materials with components that do not work with…

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