Key Takeaways:

  • Business negotiations vary widely, from legal disputes to strategic partnerships.
  • Famous cases highlight the importance of preparation, flexibility, and understanding the opposing side.
  • Effective negotiation strategies include building strong relationships, leveraging the BATNA (Best Alternative to a Negotiated Agreement), and understanding mutual interests.
  • Legal disputes in business can often be settled outside court, preserving business relationships.
  • Real-world examples, like Apple vs. Samsung, illustrate the complexity and nuance in high-stakes negotiations.
  • Mediation and arbitration are frequently effective in reaching settlements.
  • Resources like UpCounsel connect businesses with experienced attorneys who can guide negotiation processes.

Business Negotiation Examples

Business negotiation examples include a variety of cases involving small and large businesses, as well as organizations of all types. For instance, songwriter and singer Robin Thicke and two other co-writers behind the hit “Blurred Lines” brought a lawsuit against surviving family members of Marvin Gaye in a predetermined move, requiring unspecified damages regarding a dispute pertaining to copyright violations. Gaye’s offspring filed a counter lawsuit, and also issued a lawsuit against the publisher who owns Gaye’s song in an attempt to force them to give up the case. Take note of the following other examples.

Strategies in Business Negotiations

A successful negotiation requires a deep understanding of various strategies. Key approaches include:

  1. Relationship Building: Establishing trust can smooth the negotiation process, increasing the likelihood of a positive outcome.
  2. BATNA Assessment: Knowing one’s best alternative to a negotiated agreement ensures that negotiators don’t settle for less than they could achieve outside the negotiation.
  3. Focus on Mutual Gains: This involves finding areas where both parties benefit, which can lead to more sustainable agreements.

Starbucks Case

Another instance involves a disagreement that lasted for three years between Kraft Foods and Starbucks regarding the distribution of Starbucks coffee located in stores, but it was settled via an arbitration settlement that Starbucks had violated the contract with Kraft. Therefore, Starbucks had to pay Kraft $2.75 billion.

Negotiation Tactics and Conflict Resolution

Business negotiations often involve specific tactics and methods for conflict resolution, such as:

  • Mediation: A neutral third party helps to facilitate a resolution without imposing a decision.
  • Arbitration: In binding arbitration, an arbitrator makes a decision after hearing arguments from both sides.
  • Negotiation Styles: From collaborative (win-win) to competitive (win-lose), choosing the appropriate style is crucial based on the stakes and relationship with the opposing party.

New York City Dispute

New York City was going to gain around $250 million in assistance and another $200 million in grants if the city reached an agreement on an evaluation method with the teachers’ union, which amounted to a four percent enhancement of state assistance. However, 2012 ended and discussions between the United Federation of Teachers and former mayor Michael Bloomberg reached a deadlock.

One the day of the deadline, both sides announced a final negotiating session that took place late into the night, but the final session failed to produce an agreement. Finally, Governor Andrew Cuomo levied an evaluation system within New York City.

Apple Lawsuit

In 2011, Apple issued a lawsuit claiming Samsung had copied the iPhone model when the company created the Galaxy phone lines. Samsung countersued Apple for failing to pay royalties for the use of its wireless transmission technology. Both companies have accused one another of mimicking the function and appearance of each other’s tablet and smartphone. Both giants displayed a certain amount of willingness to make compromises to prevent a court battle. At the suggestion of a California court, they reduced the number of contentious patents by half.

Both companies said they want to avoid legal battle, and since Samsung is one of Apple’s largest suppliers, execs from both companies wished to move beyond the dispute and move forward with the business relationship.

Intellectual Property (IP) Disputes in Business Negotiations

IP disputes often arise in business, especially among large corporations where innovations are paramount. The Apple-Samsung case demonstrates the delicate balance between competition and collaboration. Often, IP negotiations also include non-compete clauses, cross-licensing agreements, and co-development contracts, highlighting how companies can protect innovations without stifling future cooperation.

Simon & Schuster

In the case of publishing giant Simon & Schuster, months of negotiations reached a stalemate in 2013 against Barnes & Noble when the bookstore tried to gain additional leverage by reducing orders of Simon & Schuster properties. They also used other hardline negotiating tactics, in the form of not allowing the publishing giant’s authors to host store-based reading sessions. Since Barnes & Noble sells around 20 percent of consumer-based books in the U.S., the publishing firm’s agents, writers, and editors were apologetic over the bookseller’s choice to use them as a bargaining tool.

National Hockey Association Case

A progression on a lockout that lasted 113 days from the National Hockey Association occurred when federal mediator Scot Beckenbaugh intervened. When negotiations grew heated, he divided both sides and used shuttle diplomacy by addressing both sides separately to spot problems and see where there could be some flexibility. The end result dealt with the problem of player pensions.

Chrysler Dispute

Fiat had hoped to acquire Chrysler in an attempt to remain solvent. Fiat got the Canadian and U.S. governments’ investments in Chrysler, obtained in a 2009 bankruptcy deal in 2011 for $640 million. With that, Fiat tried to buy a stake owned via the Voluntary Employee Beneficiary Association (VEBA), but there was a disagreement over the value of the purchase. The dispute ended up as a $4.5 billion draft error.

Time Warner Case

When cable giant Time Warner noticed a large quarterly loss in TV subscribers, amounting to the biggest subscription loss in history, the bad news stemmed from a disagreement pertaining to TV network CBS regarding fees, leading Time Warner blocking CBS from millions of homes during 2013. The contract was hailed as a victory for CBS, winning a promise of higher fees regarding programming in those blocked cities, which went from one dollar per subscriber to two dollars, including digital rights in offering content to web-based distributors like Netflix.

Amazon Case

In 2007, five large publishers in the U.S. had negotiated a newer business model regarding e-book prices with Apple, which was about to introduce the iPad. After a publisher threatened to stall the release of the digital versions to Amazon unless it moved to a better model, Amazon agreed, with reluctance, and e-book prices shot up to around $14.99.

Leveraging Power and Influence in Negotiations

Negotiations like Amazon’s e-book pricing model with major publishers showcase the use of power and influence. Companies with substantial market shares, like Amazon, can influence terms heavily, but they also risk resistance from partners who might seek alternatives. Balancing leverage with flexibility is essential, especially when prolonged conflicts can negatively impact both parties.

If you need help understanding business negotiations, post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.