Our services Cross-Cultural Business Negotiations
We conduct effective business negotiations, utilizing our wealth of global business experience as well as our bilingual proficiency in English and Japanese. These services include developing a negotiating plan, identifying and understanding the needs of the other party, and examining items on the negotiating table. We take a hands-on approach to the negotiation process to produce results that benefit both parties. We also ensure that negotiations lead you to a lasting relationship with the other party and, in turn, another business opportunity.
[ Selecting a distributor in the United States ]
Client: a Japanese manufacturer
The client was negotiating with a leading U.S. distributor over a distributorship agreement, as the first step in establishing a foothold in the U.S. market. A member of the client’s international sales department, who had a good command of English, had been conducting the negotiations. Yet, both parties reached a deadlock in the final phase over prices and the final destination of the products.
When we looked into the situation, we found that the client had already narrowed things down to a single candidate as a distributor, and that the candidate knew about it; thus the client seemed to have lost bargaining power over the other party. Obviously, the U.S. firm was using the fact that it was the only candidate on the list as strong leverage in the negotiations.
Next, we found that both parties were focused only on prices and the final destination and were stuck in the negotiations, haggling over those two issues.
We offered two solutions for the client immediately: one was to find other candidates for a distributor and enter into negotiations with them; and the other was to find out why the final destination had become such a thorny issue between the two parties.
We contacted nearly 30 potential distributors and got three of them interested. We started negotiating with each of them immediately. To ensure fairness, we notified all four candidates that they were being considered as equal candidates in the screening process. This created a sense of competition among them, which in turn gave them an incentive to take a more active and cooperative stance toward overcoming challenges that they faced in negotiations.
Then, we looked into the issue of the final destination, over which the client and the first candidate had been haggling, by having separate interviews with each of them.
We found from these interviews that the U.S. firm preferred DDU (Delivered Duty Unpaid) terms as they had rarely imported goods from overseas and did not want to run into the hassle of clearing U.S. Customs and handling logistical arrangements. For its part, the Japanese client wished to work under Ex Factory terms as they were not familiar with international logistics. Negotiated prices of goods were naturally subject to these delivery terms.
The initial solution we provided for the client was to train their staff in international logistical arrangements to create an operations manual and to help them build a working relationship with a customs broker. Once they gained sufficient knowledge about international logistics, they became able to work under other delivery terms other than Ex Factory. This made them more flexible in choosing delivery terms and gave them stronger leverage at the bargaining table.
At the end of the negotiations, both parties agreed to work under DDU terms, which the U.S. firm had preferred. The client was able to have the U.S. firm agree to set higher prices for their products on condition that they would assume responsibility for making international logistical arrangements, and was able to secure a higher gross margin on the deal. It was a win-win deal.
Testimonial by the client’s international sales department staff member:
If we have only ourselves working on a task, it is not easy to think out-of-the-box when we hit the wall and get stuck. Especially, in business negotiations with a party from overseas, we can barely see beyond an immediate problem or challenge, partly due to the language barrier.
When US-JAPAN CONSULTING, which is highly experienced in global business, began to help us in the negotiating process, they came up with a lot of ideas and solutions we had never thought of. They turned the whole process into an exciting experience. As they were very proficient in English and Japanese, they were able to get involved with the negotiations from Day One. It was an extremely well planned negotiation process.
We are very happy that we were able to exercise leverage over a U.S. company in the negotiations and sign a mutually beneficial agreement. We would like to work with US-JAPAN CONSULTING again.
