Reference no: EM133171302

SITXMGT002 Establish and conduct business relationships

Assessment task 3: Case Study 1

Required documents and equipment:
• Simulated Business Environment Hotel Complex and access to all the documents defined in Appendix 1 at the back of this tool (Assessor must ensure all the documents are available)
• Current commercial policies, procedures and template documents use support the negotiation process:
- preparatory facts and statistics
- key performance indicators
- market information

Case study
You are the purchasing manager for Angad Institutehotel complex. The hotel has a number of outlets.

An upmarket bistro seating 200 and open Tuesday to Sunday (Friday and Saturday nights average 300 covers, Sunday lunch and dinner usually average 150 to 200 covers).
A public sports bar for up to 250 patrons.
An informal lounge bar with seating for 60.
A two-lane drive-through bottle shop.
A gaming room with 70 poker machines.
A small coffee shop seating 20, attached to the gaming room.

All stock required for the outlets must be requisitioned through your department. You're responsible for dealing with suppliers, placing orders, receiving deliveries, storing and distributing stock, contacting maintenance and repair specialists as required, and managing the cleaning contractor.

You have the authority to negotiate contracts with suppliers to the value of $150,000 per annum on your own. Above this amount, the assistant manager must negotiate with the general manager to obtain final approval for all contracts.

The hotel's owners have received approval to extend a section of the bistro into an outdoor garden dining area which will seat an extra 100 guests. They're demolishing a wall and replacing it with large glass panels and doors. The outdoor area requires appropriate furniture, umbrellas, awnings, and additional cutlery, crockery, glassware and service equipment.

They're building a small bar in one corner of the garden area for use during busy periods or to service the area if it's booked for a private function. They're covering one-third of the area closest to the doorways leading from the internal bistro area with a permanent roof. For the cooler months, they're considering either attaching outdoor gas heaters to the roof area or purchasing freestanding heaters.
The renovations will take three months. An opening date has been set for the first Thursday in December. Promotion of the new area commences in one month. Customers can make bookings six weeks prior to opening. It has been forecasted that the new seating area will lead to a 40 per cent increase in business in the bistro over the summer months.

You've been given the job of sourcing all furniture, large and small equipment, and food and beverage service equipment required for the new dining area. You may decide to use current suppliers or locate new sources. Price and the ability to supply the products and services within required timeframes will be important considerations. Any contracts for equipment must include delivery and installation deadlines.

The bistro in its current format has been open for seven years. The food and beverage manager has indicated that the current service equipment (especially the crockery) is showing stains and signs of long-term use. Management will consider investing in new crockery and possibly cutlery for the whole bistro if the price is within budgeted range. Otherwise, amounts required to increase current supplies will be purchased. However, it must match or be similar to the current service equipment.

Choose two of the following areas, products or services to focus on for the purpose of your negotiations.

• Service equipment: glassware, cutlery, crockery, etc.
• Furniture: tables, chairs, service stations
• Large or small bar equipment for the external bar
• Décor: umbrellas, shade awnings, table centrepieces, decorative pots, water features or other decorative items
• Outdoor heating systems
• Linen
• Garden supplies and/or ongoing maintenance

Q1: What two areas have you chosen to use as the basis for your negotiations?

Q2: What information must you research before you make initial enquiries with potential suppliers?

Q3: Once you've contacted suppliers to negotiate with, research the people and the organisation. Describe the results of your research and the cultural factors you'll need to consider during negotiations with the two different suppliers.

Q4: List and prioritise your objectives, negotiable and non-negotiable requirements and BATNA (best alternative to a negotiated agreement).

Q5: What concessions (if any) are you prepared to make during negotiations to achieve your objectives?

Q6: Decide what roles team members will play during the negotiations.

Q7: List the internal and external issues that could affect this business negotiation as well as any challenges you foresee occurring during the negotiation process. Describe how you would deal with each one.

Q8: Who will you communicate the results of negotiations to?

Q9: In Assessment 3 you are required to role-play negotiations with the two suppliers you have researched. Write a meeting agenda for the negotiations in the space provided.
Agenda for Supplier 1 negotiations

Attachment:- Establish and conduct business relationships.rar