Proposing a Joint Venture
Proposing a Joint Venture
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1) Useful Expressions
- Let's cut to the chase.
- I don't like to beat around the bush.
- I prefer to get straight to the point.
- I'd like to propose a joint venture.
- What are the risks involved?
- That is open for discussion.
- What I suggest is...
- I might have to consult with...
- I'm not sure that is the best offer we can get.
- We're going to have to look for other companies' offers.
- Let's not make any rash decisions.
- I'm sorry but we can't drop our prices any lower than...
- That is as low as we can go.
- The deal is settled then.
2) Dialogue Practice
Mr. Abbot from Insider Telecommunications is negotiating with an electronics company.
A: Good to see you again, Mr. Smith. Please make yourself comfortable.
B: Thank you for inviting me here. I'm afraid I don't have much time today, as my schedule is tight, so, let's cut to the chase. What can I do for you?
A: I have invited you here because I'd like to propose a joint venture, that I believe, will make a steady stream of revenue for both of our companies.
B: Okay, you have got me interested. What kind of venture do you have in mind?
A: We’ve just launched a new product – a SIM card with extra memory to store more phone numbers and other data. Our plan is to sell them together with economy class smartphones.
B: I'd like to hear more about this proposal. What exactly would be our role in this venture and what are the risks involved?
A: There are no risks on your side. For the beginning, we would like to buy a number of your smartphones and sell them together with our new SIM cards. Then, if all goes well, we could think of a way to bring the two products closer together, and sell them as a single entity. But that is open for discussion.
B: Okay, that sounds reasonable. Well, the price for our most popular economy class smartphone is $260 per item. We could give you a huge discount if you make the payment in advance. Let’s say... $200 per phone?
A: You run a tight ship here. I did not even start to negotiate and you have already offered us your conditions!
B: Well, you have negotiated with us before... You know that we don't like to beat around the bush and prefer to get straight to the point.
A: Yes, and that's why we like doing business with you. Still, I am not sure we would be able to make the full payment in advance. What I suggest is paying half in advance and half after the first week of the sales.
B: I might have to consult with my partner about these conditions. But in that case, we would not be able to offer such a big discount. Without paying in advance, we could agree on $210 per phone.
A: I'm not sure that is the best offer we can get. I'm sorry, but I'm going to have to look for other companies' offers, before accepting this deal.
B: Okay, let's not make any rash decisions. Please give me a few minutes and I'll see if there is anything I can do.
Mr. Smith calls his partner to consult with him.
B: All right, we can offer $203 per phone, that is as low as we can go. How does that sound to you?
A: Now that's something we can agree on. The deal is settled then. It's nice doing business with you.
Check your understanding:
1. What kind of a business venture did Mr. Abbott propose to Mr. Smith?
2. What conditions did Mr. Smith offer at first?
3. What did they agree on in the end?
3) Discussion
1. What are some strategies that can be used in negotiations?
2. Do you think negotiation skills can be learned?
3. What do you think are the advantages of a joint venture?
4. What are some things to consider before starting a joint venture?
