Group assignment communication and negotiation in business neu

NATIONAL ECONOMICS UNIVERSITY
FACULTY OF TOURISM AND HOSPITALITY
------------------------------------------------------------

COMMUNICATION AND NEGOTIATION IN BUSINESS
GROUP ASSIGNMENT

Group: 2
Class: IHME
Intake: 62
School year: 2021-2022

Hanoi, November 2021
Table of Contents


A. Assignment solution
1. Read the paper named “Preparing your hospitality executives and staff for
effective corporate communication: Preparedness versus Damage control”:

a) What is the importance of social media to hospitality’s businesses?
b) What do businesses in hospitality industry should do to be well- prepared to
face with challenges from social media?

2. Read the Former Deputy Prime Minister Vu Khoan’s interview transcript
named “Co cua dam phan” (in Vietnamese) then answer the following
questions:

a) What negotiation techniques did Mr. Vu Khoan apply to his negotiation cases?
What were the results?
b) Do you think you can apply these techniques into your real-life situation of

negotiation? Why/or Why not?

3. Case (Find and analyse a real-life case of business negotiation):

a) The context of the case
 Brief description into the negotiation
 Parties involved in the negotiation
 General situation
b) The process of getting the result
 Brief process of the negotiation
2


 Identify the position / interest of each party
 Further analysis
 Hypothesis
c) The experience you have learnt from the case
 Three essential actions pursued by both players to create value
 Conclusion

B. Members’ Contributions

A. Assignment solution
Part 1: Read the paper named “Preparing your hospitality executives & staff for
effective corporate communication: Preparedness versus Damage control”:
a. What is the importance of social media to hospitality’s businesses?
In the present age, social media has become an important advertising source for
businesses in recent years, and the hospitality industry is no exception to this.
With the evolution of affordable mobile phones, development in computer
operation, and easy access to the internet, social media has become easily

accessible to everyone. The emergence of social media has eventually proven the
direct link between the business and its end consumer. Social media has
fundamentally altered the face of branding, advertising, and marketing. In this day
and age, no business can avoid the influence of social media. In particular, reputed
and recognized hotels have been very active on social media in recent times. These
hotels and businesses very easily stay in touch with their customers. Social media
helps to reach a target audience and it plays a crucial role in interacting with your
audience. It have changed the dimensions of booking, communications, and
payment methods. Nowadays, social media platforms such as Facebook,
Instagram, and Twitter are extremely effective at reaching out to audiences.
Consumers surf through social media for mini restaurants as well. To be more
3


specific, in the following sections, I will demonstrate the significance of social
media to hospitality's businesses.
First and foremost, social media helps boost the branding of a hotel. Your hotel
will be a brand name only when people are praising your quality services and
spreading, sharing information. When people recommend your hotel to their
relatives and friends, your name will gradually become a brand. Hotels can invest
in a mobile app and build a lasting relationship with their customers. Social media
provides the perfect platform for hotels to boost their brand to their customers.
Brand promotion is also made easier with the use of social media platforms such as
Facebook, Twitter, and Instagram. Specifically, a hotel can easily run its own
Facebook, Instagram, or Twitter account. Advertisement can be placed there for
free and tagged to previous or prospective customers, as well as the consumer's
friends, without the need for laborious efforts. Moreover, advertisements on social
media are more beneficial than those in print or electronic media because they are
permanent. It does not have a time limit like print or electronic media. Besides,
hotels will get feedback if people have read or watched the advertisement on social

media. Positive reviews can generate a lot of revenue because before visiting any
new hotel, people look up its rating based on the reviews given by its regular or
infrequent visitors. Hotels can use positive reviews in the form of tweets, photos,
and videos to generate their own publicity. It is the positive reviews that contribute
greatly in the development of a successful hotel brand.
Furthermore, social media plays a critical role in broadening the potential to
reach customers. Hotels can encourage people to like their page by providing
rewards in the form of discounts and running their own promotions. You can target
specific people for your online marketing campaigns using media marketing. You
can target people based on their interests, age, geographic location, and other
factors. In addition, expanding the potential to reach customers will be made easier
when hotels are quick to reply to the queries of consumers on social sites and share
with them about hotel events. A simple like or comment can help to strengthen the
relationship between hotels and their customers.
Last but not least, social media is very effective in influencing opinions of
people. A variety of people believe recommendations made by random visitors on
social media platforms. A number of people make bookings or cancel hotel

4


reservations as a result of social media influence. Social media is more effective
than word of mouth or any other form of advertising.
b. What do businesses in hospitality industry should do to be well- prepared to
face with challenges from social media?
Admittedly, humans gain lots of benefits from social media; however, there are
drawbacks that usually occur. If used correctly and properly cared for, it can
provide enormous benefits; however, if it fails to do so, it can damage or spoil the
image in a short period of time. It is not feasible to count the benefits of social
media for a hotel. Trained personnel who can handle the account are also needed.

As a result, methods for dealing with the challenges posed by social media are
required.
In the Forbes article of October 2012, Jeanne Meister highlights 5 corporate
social media educational steps:
Incorporate social media awareness, personal and professional branding,
and the concept of the voice of the firm during your employees’ orientation
program.
Step 1:

Create a training program – branded specifically for you and incorporating
the nuances and buzz words important to you, your customers, and employees.
Step 2:

Be specific about what you expect of your employees and their social
media communication for the firm.
Step 3:

Engage and reward employees for the participation and contributions;
engage those in particular who are active in social media as well as those who are
industry and niche experts – so that proper information is communicated.
Step 4:

Continuously improve your program, goals, and social engagement
strategies with your team.
Step 5:

Businesses in the hotel industry should do the following to prepare well for the
challenges of social media:
 Employees should be properly trained on how to use social media.
 Hotels should provide constructive feedback in response to negative reviews.

5


 Customers' perceptions of deficiency should be addressed as soon as possible.
 To keep customers interested, hotels should post new and interesting content on
a regular basis.
 Exciting deals should be promoted via social media. Information from the
competitors should be hidden as much as possible. To deal with security
concerns, hotels must not display their personal and sensitive information.

Part 2: Read the Former Deputy Prime Minister Vu Khoan’s interview transcript named
“Co cua dam phan” (in Vietnamese) then answer the following questions:
a. What negotiation techniques did Mr. Vu Khoan apply to his negotiation
cases? What were the results?
Mr. Vu Khoan shared that "diplomatic activities such as tree trunks, research
work is the root, other professional activities such as branches, and negotiation
and signing are like tree trunks ..." The negotiating techniques he shared are quite
practical, associated with the signing activities that our state has participated in.

 The first stage is preparation
This is one of the key stages to the success of the negotiations. Approach the
motto " know yourself, know people, know the times " and can " know the
rules of the game ".
 Clarify three things: what do I want, what do I have and what can I give in
to, in exchange?
Vu Khoan gave the example of negotiating to reach the Paris Agreement and
joining the WTO.

6

Use H.I.T. techniques in negotiations Clarifying and identifying your
strengths and weaknesses. Clarifying the key and secondary requirements, we
also understand the weaknesses of the opponent (SWOT analysis).
For example, we have made full use of the difficulties within the United
States and the depravity of Saigon as well as their deep conflict with each
other to gain our advantage in the Paris negotiations.

 Negotiating partner study
Using the motto ‘my belly to the human belly’
To " know people " you need to study, learn, and consider many aspects. Mr.
Vu Khoan has launched negotiations with the United States in Paris. After
extensive research, closely monitor the effects of the Vietnam War on
different aspects. What America needs is to withdraw from the Vietnam War.
What America has is military power but has suffered a lot on the battlefield
and what America may have been is the government of the henchmen in
Saigon.
In particular, we need to be familiar with the person we directly negotiate
with. If you have not met or are not familiar, you should ask people who
know them; Otherwise, you should catch it from the first contact to behave.
Know your partner. From there, we can build an effective negotiation
campaign for us.

 Determine the negotiating context
There are two contexts we need to understand: the external context and the
internal context.
External context: like a large chessboard, on which negotiations take place. In

terms of national negotiations, political and diplomatic factors, especially the
nature of bilateral relations with the negotiating subjects, have an important

influence on the outcome of negotiations.
Internal context: socio-economic- political, cultural and human situation.

7


Creating an important condition in the negotiations, the time is favourable,
the negotiation has a chance to succeed.

 Develop a negotiating plan (calculate different options for discussion)
When proposing negotiating options, different levels of discussion should be
anticipated within the framework of " floor " (minimum) and " ceiling "
(maximum).
That is, using ZOPA in negotiations. Accurately identifying ZOPA will
benefit both parties more than alternatives. This gives the negotiator more
flexibility in the negotiation process to achieve the desired result. Example:
Apply ZOPA technique to WTO accession negotiations
We negotiated a reasonable deal and became a member of the WTO.

 During the negotiations, Mr. Vu Khoan shared some tricks:

 Introduction, familiarity
Before entering the formal negotiations, it is recommended to arrange a
private meeting with the head of the partner delegation to get acquainted, and
at the same time probe their feelings and calculations, if necessary, reveal the
message from their side.
Building a " person-to-person" relationship is very helpful at work. You can
try to "break the bang" with friendly, witty sentences.
Make a good impression on the partner, a good impression will facilitate the
next dialogue process.

 Exchange of draft documents
Proactively draft the agreement document and give it to the partner in
advance. The draft covers the highest options on his part. In case the partner
does the same, compare the two copies together, eliminate the same basic
points, filter out the differences to negotiate.
Create more advantages in negotiations, bringing the highest efficiency.

 Adjustment of requirements - to the scope of ZOPA consensus
Mr. Nguyen Co Thach has proposed a trick that is to offer a very high plan on
the basis that the two sides will continue to negotiate.
8


For example, in 1989-1990, an international conference was scheduled to
discuss the issue of "boat people". The countries concerned, mainly China, the
UK, and ASEAN countries, demand that we take everything back, including
by coercive means; And before that, I only accepted the repatriation of
individual cases. Later, I took the initiative to move up a bit to accept
voluntary repatriation.
Finally, the orderly repatriation agreement
To relieve this bitter issue - one of two conditions for them to lift the embargo
on themselves (the first is that we withdraw our troops from Cambodia and
form a Government of National Reconciliation there).

 Use the Good guy/ Bad Guy technique
Depending on the extent of that negotiation, we are willing to switch between
hard and soft. As Mr. Vu Khoan said when " erection ", when " needs" but
"erections" also do not let negotiations break down, "needs" must not show
weakness for people to humiliate and deflect the demands for negotiation.

Show flexibility in negotiation, creating a certain position.

 Using the H.I.T. technique
"Take and give" means that when you trade, you need to try to keep what is
needed, for the least harm.
For example, in 2010, at the end of negotiations on the BTA, Vu Khoan
pressured the U.S. to remove the textile quota, but under the law only when a
WTO member is entitled to that status should temporarily lower the import
tax rate of textiles from over 40% to about 4% first and win the BTA
agreement to enter the broad market of the country. America; In exchange, we
accept the opening of the Vietnamese market at a fairly limited level.
 The U.S. accepted to remove the textile quota but with the monitoring
mechanism
Vu Khoan took on the responsibility of agreeing because he had dropped the
quota and joined the WTO, thereby enjoying the US PNTR regime, further
expanding our market.

9


b. Do you think you can apply these techniques into your real-life situation of
negotiation? Why/or Why not?
These techniques are used frequently in our lives, sometimes even without
realizing that we are applying it to our lives.

 ZOPA
For example, in order for Phuong to sell his motorcycle to Uyen for a
minimum of VND30 million, Uyen must be willing to pay at least VND30
million. If Uyen is willing to jointly grant VND 31 million for the car, then
ZOPA here is 1 million. Any deal within this 1 million-million-person range

satisfies buyers and sellers. If Uyen can only buy the car for VND 29 million,
then there is no encounter and there can be no ZOPA.

 BATNA
For example, Russia went to a flower shop to buy roses for Linh. But when
they arrived at the store, the staff announced that the roses had sold out, and
Russia had turned to sunflowers.

 H.I.T
For example, if Quynh wants to go to the supermarket to buy fruit, here's her
H.I.T.

o H - Must have: fruits
o I - Intended: Some have a lot of water such as grapefruit, orange,
watermelon...
o T - Tradable: Price, freshness and quality of fruits, distance from home to
supermarket...

 Good guy/ Bad guy
10


For example, Jenny, a well-known KOI online, is looking at a phone at a
reputable phone store. After researching and listening to the advice of the
staff, Linh decided to buy it. But she has a condition of a 20% discount, and
she will introduce the store to social media. As a salesman, he couldn't make
his own decisions. He contacted management for comment on the deal.

Later, the manager went to See Jenny that the deal was not accepted. Whether
Jenny’s offer is a good idea or a bad idea, the store must have a thorough

review process, mutually beneficial.

 Partner research
For example, you are the head of the Music Club and Phuong is a very good
singer, you want to invite Phuong to join his club. Then you will have to
know the " gain " and " loss " of Phuong when joining your club.

Part 3: Case (Find and analyse a real-life case of business negotiation)
I.

CONTEXT OF THE CASE

1. Brief description into the negotiation
A shopping center management firm with operations in eight countries (one of which
is Spain) and an international retailer appointed a new brand of health care products
aimed at a younger population involved in the lawsuit.
The narrative began in 2008, when Skin&Co Roma agreed to a 5-year contract with
Centro Comercial La Vaguada. The store had requested a location on the first floor of
the shopping center, and thus the negotiations had gone on for a long time. Due to the
11


fact that all spaces on the first floor were taken by other businesses at the time, such a
request could not be granted.
Nonetheless, Skin&Co Roma recognized the importance of having a presence in
important areas of the Spanish La Vaguada for their plan, and accepted a 2000 square
meter location on the third floor. Business continued as usual until 2009, when
Skin&Co Roma's sales began to decline marginally. From 2009 to the beginning of
2013, Skin&Co Roma continuously negotiated with La Vaguada Centre with the
purpose of coming to an agreement to reduce the fixed rent. At the end of 2012, as

National Account Manager of Skin&Co Roma, Mr. Thomas Stevenson, he tried to
negotiate the fixed rent, as well as review other key issues with John Stuart,
property manager for La Vaguada.

2. Parties involved in the negotiation
a. Skin&Co Roma
Skin&Co Roma is a leading brand for cosmetics and health-care products (body and
face) designed to serve low-to medium income buyers. It belongs to the group
Skin&Co, an Italian-based company which in 2008 started spreading their brand all
over Europe. Their vision is to start being recognized all over Europe in order to
compete against giant cosmetic brands like Pantene, Olay, The Body Shop, Nivea,
Lancôme and Avon among others. Since 2008, their overall revenue has grown around
70%, having approximately 450 stores all over Europe’s biggest cities (Berg J. &
Milgrom F., 2012, p.2). The company usually rents big spaces in each shopping
centre, of approximately 2000 square foot.
b. Centro Comercial La Vaguada
In turn, La Vaguada is one of a vast network of shopping malls belonging to the
company Unibail-Rodamco-Westfield. This Spanish-based company, is one of the
largest management companies of shopping centres in the world, present in more than
30 countries, owning around 200 shopping centres around the globe. It is known for
its excellent performance in terms of its retailer’s sales and flow of visitors, as their
centres are usually located near stadiums and also near several offices, characteristics
which automatically guarantee constant foot traffic. It has a very attractive location,
on one of the most crowded streets of Madrid. Spain is clearly a country where we can
observe the first signs of recovery in terms of consumption, but Barcelona and Madrid
are obviously more responsible for that upturn. Therefore, Skin&Co Roma’s
12


internationalization strategy has to be pursued through a constant presence in the

biggest cities of Europe and more precisely in critical shopping malls such as La
Vaguada, capable of generating high levels of foot traffic.
3. General situation
a. Economic situation
 Skin&Co Roma
At the end of 2010 and despite the beginning of the international crises, the retailer
had still enjoyed positive growth rates around 5%, going against the general trend of
other industries. However, the beginning of 2011 saw monthly sales decline by 10 to
20%. There is a clear need to renegotiate new terms for occupation agreements in
shopping malls, namely the monthly fixed rent, in order to guarantee sustainability.
 Centro Comercial La Vaguada
In terms of performance, before the effects of the economic crisis started, La Vaguada
had a very high occupation rate driven by a constant demand for space, which made
practically every shopping mall extremely profitable. By contrast, in 2010 and 2011,
occupation rates dropped below 85% as certain stores declared bankruptcy or inability
to continue paying the agreed fixed rent.
 Spain’s economic situation
Regarding the Spanish market in general, 2008 is the year where the first symptoms of
economic slowdown started to appear, namely higher unemployment rates as well as a
slight fall in the level of consumption. In 2009 there was an escalation of the situation.
Entrepreneurs and established companies lacked access to credit due to liquidity
problems presented by the financial sector (banks). Yields become increasingly higher,
and the public/ private sector cut investment efforts, causing fear and doubt among
consumers. The slowdown in consumption extended not only to luxury goods but also
primary goods such as clothing and food sectors. Small traditional stores faced many
constraints and world-recognized brands saw their sales growth decline.
b. Cosmetic industry
The cosmetic and beauty market is dominated by a small number of powerful
companies, which own hugely recognized brands, including Dove (Unilever), Pantene
(Procter & Gamble), Olay (Procter & Gamble), The Body Shop (L’Oréal), Nivea

(Beiersdorf AG), Lancôme (L’Oréal), Avonas well as Shiseido. Regarding the Spanish
13


market, nearly 30% of the total market share belongs to three major groups: Unilever,
Procter & Gamble and L’Oréal. Avon and Shiseido still have a residual presence in the
market (3.3% and 2.6% respectively) (GlobalInsight,2013-pp.71-92).
Typically, the cosmetic industry relies heavily on the disposable income of
households, especially females between 30 and 45 years old. Furthermore, cosmetic
goods’ sales tend to be higher in times of economic stability, which was not the case in
Spain between 2008 and 2012.
Skin&Co Roma is considered one of the best Italian cosmetic brands, able to compete
with well-established groups in the European market. However, the challenge
presented by the Spanish context had led the company to accumulate losses for the
previous two years Shopping centres’ market.
c. Shopping centres’ market
Shopping centres’ business is particularly complex due to the amount of competition
faced. Not only do shopping centres “battle” between each other for higher levels of
foot traffic and sales, but competition can be extended to other surfaces such as retail
parks, outlets and department stores. Besides Unibail-Rodamco-Westfield, there are
another 3 major companies whose business is directly related with the management of
big retail spaces. Thus, competition is in fact very differentiated and fierce, although
the number of players behind the management of shopping malls is low.

II.

PROCESS OF GETTING THE RESULT

1. Brief process of the negotiation
2008

5-year contract, Skin&Co Roma requested for first floor location, but
failed

2009 (sales
declined)

S&C called for assistance of LaVaguada (decreased fixed rent), but
failed

14


(The majority of other stores’ sales were still very good)
Begin-2010

S&C reported an intensification to lower fixed rent.
La Vaguada wanted to verify financial data of the shop but was denied
by S&C because of confidentiality violations.
Failed

End-2011
(Cash
trouble)

S&C requested lower fixed rent and lenient payment conditions.

End-2012

S&C delayed 2-3 months’ rent payments.

La Vaguada hired an audit firm to check S&C financial health, decided
to extend the rent payment date to assist S&C, but did not approve the
initial request.

La Vaguada decided to stop accepting this behaviour and took legal
actions to compel S&C to pay the unpaid payments.
End-2012

Under the threat of removing its store from the shopping centre’s chain,
national Account Manager of Skin&Co Roma, Mr. Thomas Stevenson
tried to negotiate the fixed rent, as well as review other key issues with
John Stuart, property manager for La Vaguada. Failed

Begin-2013

S&C departed La Vaguada. Failed

***In this part, we only analyze the negotiation carried out by Mr. Stevenson and Mr.
Stuart.
a. Preparation
 Skin&Co Roma
Thomas wanted to revise the current fixed rent. Over the months, sales had been
steadily increasing, but the performance of the last couple of months was not allowing
Skin&Co Roma to bear that level of fixed costs. Its margins were lower and
occupation costs were becoming higher. It was absolutely essential that he got the
other side to accept a reduction in the current fixed rent of 10€/sqm/month starting
from January 2013 onwards, which would improve the business long-term prospects.
 La Vaguada
15

As property manager for La Vaguada, Mr. John Stuart was reviewing key issues in the
negotiation as well as other new issues that may facilitate an agreement with Thomas
Stevenson, National Account Manager of Skin&Co Roma.
La Vague hired an external audit firm to evaluate the financial situation of the store
and determine whether they should agree upon a lower fixed rent for the future, as
Thomas Stevenson requested. Throughout this evaluation it was possible to conclude
that sales were indeed decreasing, but there was room for improvement by
implementing a higher cost control strategy and an optimized management of
inventory. However, the other side was very clear about the importance of lowering
the value of this variable, and failure to do so may prompt it to remove its stores from
their chain of centres. The market price for a space of 2000 sqm is around
10€/sqm/month.

b. Offering
 Skin&Co Roma
16


Fixed rent: a reduction in the current fixed rent of 10€/sqm/month starting from
January 2013 onwards, which would improve the business long-term prospects.
Discounts on rent: Thomas requested an increase between 10 to 20% on fixed rent
discounts, which could have been beneficial for the stability of the store.
Terms of payment: Thomas wanted to increase the terms of payment to 45days,
allowing Skin&Co Roma to pay its suppliers more quickly and have a better
control of its working capital needs. The current cost of La Vaguada was around
15%, which was considered high.
Turnout cost: including a percentage of the rent that depended on their sales.
Fitouts cost: The level of fit-out costs was too high, he asked to reduce it by

20%.
Cooperative advertising: John Stuart added a new variable to the negotiation that
he said, “can be extremely beneficial for both sides''. La Vaguada had already
opened a refurbished space on the 3rd floor aimed at providing shopping visitors
with a new place to relax, in order to spend more time inside the shopping centre.
A cooperative advertising strategy between stores and the centre, using several
channels to promote the initiative, could in fact enhance sales, enabling all stores to
be better off in terms of profitability. It required an initial investment that he
believed would result in increases in turnover for the future (not measurable).
(Although there were stores with limited ability to invest at the moment, such as
Skin&Co Roma.)
Location: It would be beneficial to move to a lower floor, where S&C can have
more international retailers of diversified sectors as our neighbors.
Mall space: He asked if S&C would have permission to set a mall space (a small
stall) in front of S&C store.
c. Counteroffer
 La Vaguada
Fixed rent: 2000 sqm costs around 10€/sqm/month.
Discounts on rent: John offered discounts of around 5% on fixed rent for a shortterm period. “If I decide to give a higher discount, other stores will ask for the
same special treatment.”-said John.
Terms of payment: 20 days to fulfil payment obligations

17


Turnover cost: agreed to include a percentage of the rent that depended on their
sales.
Fitouts cost: No change. He said that it was the company policy to retain a
percentage of these costs on a monthly basis to continuously improve the shopping
centre infrastructures.

Cooperative advertising: John suggested an advertising campaign to enhance foot
traffic in the new-refurbished area. It would consist of producing flyers with
special offers addressed to a large number of households, as well as placing
advertising panels near strategic entrances of the shopping centre mentioning the
advantages of the initiative. He quoted different prices depending on the desired
impact of the campaign. La Vaguada believed that the effect of the campaign
would be to generate more sales for Skin&Co Roma and their competitors.
Location: On the 2nd floor, La Vaguada possessed one available space, but it was
much bigger than the one occupied by S&C at the moment, which would
automatically imply a higher fixed rent (+5€/sqm/month). When it came to the 1st
floor, the occupancy rate was at 100%, so it was impossible for S&C to move
there. Furthermore, experience showed John that location is not a key factor
affecting revenue, but things such as good management of costs and inventory are
of greater importance.
Mallspace: The centre prohibited outside stalls in the middle of the corridors,
because the centre tried to avoid large concentrations of these within the same area.
d. Bargaining
Skin&Co Roma was trying to bargain but changes were not considerable.
e. Closing
The negotiation ended with no agreement between two parties. Skin&Co withdrew
from the negotiation and departed from La Vaguada at the beginning of 2013.
2. Identify the position / interest of each party
a. Position
 Skin&Co Roma
Fixed rent: a reduction in the current fixed rent of 10€/sqm/month starting from
January 2013 onwards.
18


Discounts on rent: an increase between 10 to 20% on fixed rent discounts.

Terms of payment: increase the terms of payment to 45days.
Turnout cost: including a percentage of the rent that depended on their sales.
Fitouts cost: Reduce it by 20%.
Cooperative advertising: A cooperative advertising strategy between stores and the
centre, using several channels to promote the initiative
Location: move to a lower floor
Mall space: have permission to set a mall space (a small stall) in front of S&C
store.
 La Vaguada
Fixed rent: 2000 sqm costs around 10€/sqm/month.
Discounts on rent: John offered discounts of around 5% on fixed rent for a shortterm period.
Terms of payment: 20 days to fulfil payment obligations
Turnover cost: agreed to include a percentage of the rent that depended on their
sales.
Fitouts cost: No change.
Cooperative advertising: John suggested an advertising campaign to enhance foot
traffic in the new-refurbished area.
Location: On the 2nd floor, La Vaguada possessed one available space, but it was
much bigger than the one occupied by S&C at the moment, which would
automatically imply a higher fixed rent (+5€/sqm/month).
Mall space: The centre prohibited outside stalls in the middle of the corridors.
b. Interests
 Skin&Co Roma
Fixed rent: improve the business long-term prospects.
Discounts on rent: beneficial for the stability of the store.
19


Terms of payment: allowing Skin&Co Roma to pay its suppliers more quickly
and have a better control of its working capital needs.

Turnout cost: allowed retailers to share a portion of the risk on their own business
with the centre, making part of the rent dependent on the level of sales.
Fitouts cost: The level of fit-out costs was too high, he asked to reduce it by
20%.
Cooperative advertising: enhance sales, enabling all stores to be better off in
terms of profitability. It required an initial investment that he believed would result
in increases in turnover for the future (not measurable). (Although there were
stores with limited ability to invest at the moment, such as Skin&Co Roma.)
Location: a good location can influence the level of sales, since foot traffic was
not the same across the entire shopping centre. can have more international
retailers of diversified sectors as our neighbors.
Mallspace: inducing visitors to enter the store where it would place its newest
winter collection of cosmetics products, allowing potential customers to try them
for free, or possibly to take away some free samples with them.
 La Vaguada
Equality and Financial stability.

3. Further analysis
a. What went well
There are seven other variables with different outcomes for each side. For example,
it would be interesting to consider increasing the share of rent dependent on
revenues, as parties possess different expectations regarding the store’s future.
b. What went wrong
In standard negotiations between these two parties, it is common practice for
several issues to be discussed. Nevertheless, Skin&Co Roma and La Vaguada
exercised maximum pressure on a single-issue, the fixed rent. Thus, adding issues
must be perceived as a tool to create value. Discount on fixed rent, turnover rent
and store location are all variables that allow parties to move away from
negotiating one issue, where it is harder to reach a consensus.
20

In addition, during the negotiation, both sides were reluctant to concede any
information about possible benefits or losses.The store Skin&Co Roman denied
access to financial information that would show their results getting worse. In turn,
La Vaguada decided not to allow tenants to check costs associated with the
refurbishment and renovation of the centre.
Additionally, there is a common mistake of neglecting BATNAs (best alternative to
a negotiated agreement). Concerning La Vaguada, the consequences of a
negotiation without an agreement could basically imply having a 2000 square
meter space without a tenant for a certain period of time, as well as the loss of an
important player to the shopping’s portfolio in the cosmetic industry, given
Skin&Co Roman's Potential, and so on.
Finally, this negotiation relied too much on the positions of the two parties but
forgot considering interests behind those positions.

4. Hypothesis (end in a stalemate, so is there any window of opportunity to
renegotiate in the future? If so, then why?)
There will definitely be lots of opportunities for both parties to renegotiate in the
future. Actually, if the two parties truly consider “what went wrong” analysis, then
they could easily reach a win-win agreement.

III.

THE EXPERIENCE LEARNT FROM THE CASE

1. Three essential actions pursued by both players to create value:
When negotiations are regarded with a multiple-issue logic, there is an integrative
dimension that allows both parties to benefit, making the negotiation process
potentially less complex. Therefore, to create value there are essentially four actions

that ought to be pursued by both players.
To begin with, emphasize the importance of creating an agenda as a first draft for the
negotiation. In fact, “working on a draft helps to keep discussions focused, tends to
surface important issues that might otherwise be overlooked, and gives a sense of
progress”. In parallel, “skillful negotiators will instinctively try to introduce additional
21


issues in order to craft a complex package deal, both to create more value and to veil
the distributive dimension of bargaining”. Thus, it is crucial to create agendas with
multiple issues.
Secondly, if parties “share preference information, we might expect that they would
achieve a mutually beneficial agreement more easily than if they do not”. Therefore,
each side must make an effort to extract information about preferences of the other
side, so parties can search for differences. Hence, “a great deal of value can be created
if both sides systematically exploit their differences”.
Thirdly, even before the negotiation starts, each side must make an effort in terms of
quantifying benefits and costs for each variable considered. James Sebenius and David
A. (1986) believe that “negotiators benefit by being self-conscious and reflective
about their interests and the tradeoffs they are willing to make”. Thus, the attempt to
be as accurate as possible, regarding the impacts of each issue, can indeed generate
more value and allow negotiators to make better decisions.
As previously mentioned, it is important to add numerous issues to the discussion,
making it into a package deal. However, what is crucial is to exert pressure selectively
on issues that most matter, instead of going issue by issue exerting maximum pressure
on each one.
2. Lesson conclusion
In fact, a BATNA “may involve walking away, prolonging a statement, approaching
another potential buyer (…), going to court rather than settling, forming a different
alliance, going on strike”. All these examples constitute meaningful alternatives that

should be constantly taken into account. All negotiators should bear in mind “what-if''
scenarios.
Multiple-issue negotiations should be conducted more effectively if parties want to
claim value for themselves. Specifically, parties must make an effort to quantify
tradeoffs, get information concerning the other side’s preferences and above all,
exercise pressure selectively on issues that possess bigger outcomes. By contrast,
exercising maximum pressure on all issues considered, one by one, without attempting
to establish connections between issues, will often be doomed to failure.
Through the case, as students, during negotiations, we should understand the
importance of claiming value not only for themselves, but also for the other person
present in the negotiation.

22


B. Members’ contributions
No

Member

1

Bùi Thảo Phương

Contributions
1a) What is the importance of social media to
hospitality’s businesses?
3b) The process of getting the result (Further analysis)
Report

2

Đỗ Hải Quỳnh

1b) What do businesses in hospitality industry should do
to be well-prepared to face with challenges from social
media?
2a) What negotiation techniques did Mr.Vu Khoan apply
to his negotiation cases? What were the results?
3c) The experience you have learnt from the case

3

Lê Thị Thu Nga
2b) Do you think you can apply these techniques into
your real-life situation of negotiation? Why/or why not?
23


4

Lê Nhật Linh

3a) The context of the case
2a) What negotiation techniques did Mr.Vu Khoan apply
to his negotiation cases? What were the results?

5

Nguyễn Thị Tú Uyên

3b) The process of getting the result
2b) Do you think you can apply these techniques into
your real-life situation of negotiation? Why/or why not?
(ZOPA)
Report

***Disclaimer: All members did pay best efforts to complete this work. We
gave comments and made complementary for each other to launch final
solution for this report.

Thank you!

24