The Key to Success in Negotiation is to have a systematic approach. This Negotiator's Framework -> gives you a direction to guide or lead through the negotiation; helps you evaluate offers and propose counter offers. In a nutshell, the framework offers a disciplined approach to negotiation.

1. Negotiating to Win© Arvind Maharajan
Negotiator’s Framework
Creating a framework to walk through negotiations

2. Negotiating to Win© Arvind Maharajan
What are we going to learn today?
When will a framework be successful?
 Your research needs to be exhaustive
and accurate
 You need to be disciplined to adhere to
the plan
What is a framework?
 System of checks and balances
 Gives you a direction to guide or lead
through the negotiation
 Helps you evaluate offers and propose
counter offers

3. Negotiating to Win© Arvind Maharajan
Let us learn the framework through a case study

4. Negotiating to Win© Arvind Maharajan
Case Study: Harmony Hills
 You are the Director of Summit Estate
Harmony Hills in Gurgaon
 A 5 acre prime property
 Posted an ad for selling Harmony Hills
 You have received interest from two
prospective buyers
-Realty Developers
-Prime Estate

5. Negotiating to Win© Arvind Maharajan
Case Study: Harmony Hills
Realty Developers
Builds High Rise Apartments
Fair Negotiators
Offer
 Rs.30 Crores ( 5 Mn USD)
 Offer Expires in one week
Fair offer by market standards
Prime Estate
Premier real estate company
Builds only premium end villas
Offer
 Not made any offer Offer
 CEO has called you tomorrow for discussions

6. Negotiating to Win© Arvind Maharajan
Case Study: Harmony Hills
Harmony Hills was
bought by you 5 years
back for 19 crores
(3 MN USD)
You are confident that
Realty Developers and
Prime Estate know this
fact
Land deals for villa
projects are typically
priced 20% more than
the case for apartment
projects
The offer from Realty
Developers is at par
with market but you
think you can get 10%
more
FACTS

7. Negotiating to Win© Arvind Maharajan
The Negotiation Framework
1 2 3 4 5 6
Assess your BATNA
Calculate your RV
Assess opponent’s BATNA
Calculate Opponent’s RV
Frame your ZOPA
Close the Deal

8. Negotiating to Win© Arvind Maharajan
The Negotiation Framework
Step 1: Assess your BATNA
 BATNA: Best Alternative To a Negotiated Agreement
 What will you do if this negotiation does not work out? What’s Plan B?
 For your negotiation with Prime Estate, what’s your BATNA?
 Make a deal with Realty Developers
1 2 3 4 5 6
Assess your BATNA
Calculate your RV
Assess opponent’s BATNA
Calculate Opponent’s RV
Frame your ZOPA
Close the Deal

9. Negotiating to Win© Arvind Maharajan
The Negotiation Framework
1 2 3 4 5 6
Assess your BATNA
Calculate your RV
Assess opponent’s BATNA
Calculate Opponent’s RV
Frame your ZOPA
Close the Deal
Step 2: Calculate your Reservation Value
 Reservation Value: Your walkaway point in the current negotiation
 What is the minimum that you need from this negotiation? Anything below is
unacceptable
 For your negotiation with Prime Estate, what’s your Reservation Value?
 The offer from Realty Developers + 10% more which amounts to 33cr (5.5 MN USD)
 A correct assessment of your BATNA is essential to know your Reservation Value

10. Negotiating to Win© Arvind Maharajan
The Negotiation Framework
1 2 3 4 5 6
Assess your BATNA
Calculate your RV
Assess opponent’s BATNA
Calculate Opponent’s RV
Frame your ZOPA
Close the Deal
Step 3: Assess the other party’s BATNA
 What are the other options for your negotiating opponent
 Involves a lot of research on your opponent and careful assessment of market
conditions
 For your negotiation with Prime Estate, what’s their BATNA?
 To develop their villa project on another piece of land in Gurgaon
 What are the similar land holdings in Gurgaon and what would be they selling at?

11. Negotiating to Win© Arvind Maharajan
The Negotiation Framework
1 2 3 4 5 6
Assess your BATNA
Calculate your RV
Assess opponent’s BATNA
Calculate Opponent’s RV
Frame your ZOPA
Close the Deal
Step 4: Calculate the other party’s Reservation Value
 Your negotiating opponent’s walkaway point in the current negotiation
 What is the maximum that they can give you from this negotiation? Anything
beyond is unacceptable for them
 For your negotiation with Prime Estate, what’s their Reservation Value?
 The market price is 30 Cr (5MN USD) and they would think of maximum 10%
appreciation i.e 33 Cr (5.5 MN USD)
 Villa projects can get a premium of 20% more, i.e. 33 Cr + 20%
 Reservation Value = 39.6 Cr (6.6 MN USD)

12. Negotiating to Win© Arvind Maharajan
The Negotiation Framework
1 2 3 4 5 6
Assess your BATNA
Calculate your RV
Assess opponent’s BATNA
Calculate Opponent’s RV
Frame your ZOPA
Close the Deal
Step 5: Frame ZOPA
 ZOPA: Zone of Potential Agreement
Minimum
Amount You
want
Max Amt. you
think you can get
(Your RV) (Opponent’s RV)
33Cr to 39.6 Cr
Your RV
33 Cr
(5.5 MN USD)
Prime Estate RV
39.6 Cr
(6.6 MN USD)
ZOPA

13. Negotiating to Win© Arvind Maharajan
The Negotiation Framework
1 2 3 4 5 6
Assess your BATNA
Calculate your RV
Assess opponent’s BATNA
Calculate Opponent’s RV
Frame your ZOPA
Close the Deal
Step 6: Closing the deal:
 Negotiate to get a deal within your ZOPA
 Choose an opening strategy:
 Most common is to start by aiming at the higher end of the ZOPA and then
negotiate your way down

14. Negotiating to Win© Arvind Maharajan
RECAP : The Framework
1 2 3 4 5 6
Assess your BATNA
Calculate your RV
Assess opponent’s BATNA
Calculate Opponent’s RV
Frame your ZOPA
Close the Deal