Mind the Gap: Strategy and Execution of Supply Chain Negotiations

By Nir Halevy, Lorena Ostos
2022 | Case No. OB110 | Length 11 pgs.

The case chronicles the challenges of a consulting team charged with developing and executing a negotiation strategy designed to help a large retailer cut costs by renegotiating their contract with their largest supplier.

The disguised case begins by describing the market conditions that led BizCo, a publicly traded office supply retailer, to invite DMB, a top consulting company, to help them restore their price competitiveness. It then describes the interactions between DMB’s consultants and BizCo’s executives as they developed a joint strategy and prepared together for various negotiations. The case focuses specifically on the processes and outcomes of BizCo’s negotiation with TQS, their largest supplier.

The case is written from the perspective of Elizabeth, a member of the consulting team. The suboptimal outcome in BizCo’s negotiation with TQS led Elizabeth to reflect on several issues related to designing and executing high-stakes negotiations. These issues include setting goals, managing relationships, establishing a division of labor within the negotiation team, choosing communication technologies for negotiation, setting the stage for the negotiation, and coping with time pressure and strategic surprises in high-stakes negotiations. The gaps that the BizCo – TQS negotiation revealed also led Elizabeth to reflect on strategies for influencing organizational leaders from a low power position.

Learning Objective

The case provides the context for class discussion on the following topics: negotiating relationships and resources; influence from a position of low power; principal – agent dynamics in negotiation; the roles of social identities and networks in negotiations; subjective value in negotiation; and planning vs. execution.
This material is available for download by current Stanford GSB students, faculty, and staff only. For inquires, contact the Case Writing Office. Download