Amazon Vs Hachette - Preparation Framework (Amazon - Self Assessment (What…
Amazon Vs Hachette - Preparation Framework
Background to Hachette - key interests
Background to Amazon - Key interests
Set context for negotiation - March 2014
Start with overview of Amazon and ebook industry.
Amazon - Self Assessment
What do Amazon want and why?
Identify important issues - is it more than just price.
Identify alternatives for each issue
Identify and discuss Amazon BATNA
Keep current terms is only viable BATNA?
Reservation point / Focal points - need to consider
Sunk costs / Target point
Assess risk propensity
Impact on Authors
Impact on customers
Consideration of negotiation tactics.
This is applicable - Are publishers more focused on revenue than profit?
Am i going to regret this? / Washington post test.
Other party assessment
Who are Hachette - what do they want and why?
What is Hachette's interest and position?
Identify and discuss Hachette's BATNA
Are there any other parties - e.g. media, other big 5 publishers?
One shot, long term, or repetitive
Long term - relationship should be seen as important.
Precedent is important as will impact future negotiations with suppliers.
Precedent from previous paper back pricing is also important since this is what is anchoring other party.
Is negotiation a necessity or opportunity
Both. Contract expired in March 2014, have to extend - opportunity to change terms.
Transaction or dispute?
Initially a transaction but could lead to a dispute if not handled correctly
Is ratification required?
Are linkage effects present
Very much so - This could set a precedent for negotiations with other publishers.
Loss of revenue
Further alienation of publishers. It may motivate them more to work together against Amazon.
Agreement is required - more important for Hachette?
Third party intervention is possible e.g. DOJ, other?
Location of negotiation and whether it is public or private?
Private but with significant media coverage
Explicit or tacit comms
Impact on future relationship - also consider future relationship with other parties allies.
Win - Win - Expanding the pie
Integrative negotiation strategy
Compromise, Even Split, Satisfaction, Building a relaitionship
Can we bring other issues to the table
Watch out for false or illusory conflict.
Remove the fixed pie perception
Commit to win-win, compromise, focus on long term relationship, cooperative orientation, take extra time,
Ask questions to find out other party interests.
Reveal information on our interests - e.g objectives and how the success of these will be beneficial for everybody - not just Amazon.
Assess Amazon's power
15-20% of all big 5 publisher business
60% of ebook market
Monopoly following failure of bricks and mortar competitors
Loss of Hachette wont hurt them financially
Potential to really hurt Hachette.