1. What are the issues to be negotiated (list them in order of priority)? What are the priorities among the issues in the bargaining mix?
2. What are your primary underlying interests?
3. What are my limits/ walkaway points on each issue? What is my BATNA?
4. What are my opening requests and target points on these issues?
5. Who are the important constituencies to whom I am accountable? (Field analysis)
6. What do I know about the other negotiator's interests, negotiating style, and reputation?
7. What overall strategy do I want to pursue? What do I need to assemble - research, documents, charts, and graphs, and so on - to make the most effective presentation on what I want to achieve?

Your objective during the negotiation process is to improve (1) the total dollar value of your contract, including the service contract, and (2) your relationship with Micro Pharma.

VTAC Technologies is the leading manufacturer of equipment required to test new drugs in the laboratory, Xenon 6000 is their premier product. There are only a few units available for sale each year. VTAG also sells Xenon 4000 and refurbished Xenon 6090. You have these currently available in stock. The refurbished models come with a two-year warranty, while new Xenon models have a one year warranty and are 20% cheaper than the brand new equipment. Micro Pharmaceutical is an emerging pharmaceutical company in Melbourne, Australia. Micro Is Involved in the drug development of new biotech drugs to treat arthritis. Micro filed a patent for a new drug (RABS) in the United States and Australia in 2020. To scale up the laboratory testing of RA$6, In October 2021, Micro Pharma had negotiated the purchase of a Xenon 6000 from VTAG Technologies. The original price for the Xenon 6090 was $825,000, and VTAC had given a 20% discount to build a relationship with an emerging pharmaceutical company. This was significantly higher than the usual 12%%-15% discount it provides to its other customers. The additional discount was a strategic decision for VTAC Australia. VTAG Is Interested in supporting emerging pharmaceutical companies in its market expansion strategy. VTAG largely relies on university customers and would like to change that. The negotiated purchase price for the Xenon 6000 was $660,000. In VTAC's negotiations with Micro Pharma in 2021, they had also discussed a 4-year service contract (one year warranty + 4 years of service contract) at $100,000. The total value of the original deal was $ 761,000 - the purchase of Xenon 6090, a 4-year service contract, and shipping and handing fees of $1,000. In November 2021, VTAG Technologies informed Micro Pharma that the purchase order for the Xenon 6000 should be issued immediately, as there will be a 10%% price Increase from January 1, 2022. Micro was seeking external funding to purchase the Xenon 6000; the Micro team had requested an extension on the price increase. VTAC had granled an additional grace period until April 30, 2022, before the price increase takes effect. Any purchase order from May 1, 2022, for Xenon 6090 from Micro Pharma will be at a discounted price of $726,000. The price of the service contract remains unchanged. VTAC has recently informed Micro Pharma of significant supply constraints, due to which the company is now charging 1% shipping and handling fees for all purchase orders issued in 2022, In this case, the shipping costs in 2022 are $7,260.However, It is Mey 2022 now, and Micro Pharma is yet to issue the purchase order for the Xenon 6000. You are the Account Manager for VTAC, and it is your responsibility to re negotiate a contract with Micro for the sale of the Xenon 6000. To determine the contract price, you should consider the following: 1. Xenon 6000 has a long sales cycle, and another sale may not materialize before November 2022. A Xenon 6000 will be in Melbourne in September 2022. Having the Xenon 6000 In storage will not look good Internally, The Global Team will ship the Xenon 6000 at an Internal cost of $620,000. 2. Instead of the 4-year service contract, you can offer a 3-year service contract for $75,000. The service contract is locally negotiated, and you may offer an additional 10% discount on the service contract 3. The Australian subsidiary must pay the 1% shipping charges of $6,200 to the Global team in Spain. 4. You are also interested In a potential long-term partnership with Micro Pharma