Should the egyptian team accept the french offer

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Reference no: EM133451351

Assignment:

Case: French-Egyptian bargaining

Working in small groups, study the following situation and answer the questions that follow. Each group may then make a brief presentation of its answer to the other groups for their comments.

An Egyptian food-processing firm in Cairo embarks on negotiations with a French engineering company about purchasing a technology package consisting of machinery and equipment to be supplied and installed by the French company.

Because of temporary cash flow problems being experienced by the Egyptian firm, the Egyptian negotiating team, early in the negotiations, insist that the price proposed by the French company for the total package is far too high and is unacceptable. The French team counter the Egyptian team's objection by simply reiterating that in terms of its versatility and value for money the French equipment is highly competitive.

It is only when the Egyptian team threaten to break off negotiations that the French team is startled into formulating a win win proposal that, the French negotiators say, will create value for both sides. The price will remain unchanged (as specified in the proposal document) but the Egyptian firm will be required to make a down-payment of only 5% as opposed to the 20% specified in the proposal.

The lead negotiator on the French team argues that by demonstrating flexibility in the terms of payment they have, in effect, eased the Egyptian company's cash flow problems; and on this basis, the Egyptian company is strongly urged to go ahead with the deal.

The Egyptian negotiating team are undecided about what to do and reserve a decision until the following day.

Questions:

1. Should the Egyptian team accept the French offer? If so, why? If not, why not?

2. What additional information should the Egyptian side demand from the French side which would help them to reach a clear decision, yes or no?

3. Ifthe Egyptian side are still undecided, what additional concessions should the French team make to convince them to sign an agreement?

4. If an agreement is signed, exactly how should the French company ensure that Egyptian employees can operate the new technology efficiently. Give details.

Note: Please provide proper answer of above mentioned question.

Reference no: EM133451351

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