What is a competitive negotiation?

Competitive bargaining is the method of negotiating prices and conditions surrounding a specific transaction. This negotiation method is based on the concept that negotiations are a game with zero sum; Which means that one party must win the negotiations while the other party loses. The concept of competitive bargaining is in direct contrast to the methods of cooperative negotiation, which concludes that there can be more winners in the negotiation, resulting in a mutually advantageous scenario for all parties. The result of competitive negotiations often leads to a feeling of one party as if it has received everything possible from the negotiations, while the other party feels as if it is lost in negotiations. Party of loss usually admits more to the winning party's requirements.

The concept of competitive negotiations was first implemented as a bid procedure method for companies and government agencies. Individuals in these organizations would send a request for proposals (RFP) to qualified sellers. RFP would indicate all PARameters and conditions under which the project would be awarded. Sellers who submitted proposals within a predetermined competitive scope were then selected on the basis of a proposal offering the best prices or service.

In competitive negotiations, the only factors concerning, price, conditions and total value created through negotiations are the only factors. Relationships between negotiations tend to be irrelevant in competitive negotiations. Some believe that the manifestation of concerns about the other side can weaken the position of the party and create an opportunity to exploit.

Strategy implemented by SV competitive negotiations focuses either on hard exchange or double standing. The hard exchange process is the one where both sides know exactly what terms are negotiated and where there is little or not using high -pressure tactics. On the other hand, in the form of a competitive negotiation known as double tradingEach side uses high -pressure tactics and fraud to achieve its goals.

Competitive negotiation tactics can help organizations meet their business goals. Although subtle negotiators may leave negotiations with a sense of success and triumph, the competitive nature of the process can cause it to be alienated from the other side. Finally, business success partly relies on good relations and organizations that regularly negotiate on the basis of zero sum's principles can find that this practice has long -term negative effects.