THE UNIVERSITY OF DANANG UNIVESITY OF ECONOMICS REPORT BUSINESS PLAN WRITING ASIGNMENT Group 2 Lecturer Lam Minh Quan Members Nguyen Thi Kim Ngan Le Thi Bao Ngoc Vy Bao Ngoc Doan nguyen Minh T[.]
Trang 1THE UNIVERSITY OF DANANG UNIVESITY OF ECONOMICS
REPORT
BUSINESS PLAN WRITING ASIGNMENT
Lecturer: Lam Minh Quan
Members: Nguyen Thi Kim Ngan
Le Thi Bao Ngoc
Vy Bao NgocDoan nguyen Minh TamPhan Thi Huong Tram
Danang, 2023
Trang 21 Company goals 2
2 Identify key issues 3
3 Identify benefits, BATNAS, resistance points of some issues: 6
3.1 About the price: 6
3.2 About the time of price increase: 7
3.3 About payment term: 7
3.4 About payment method: 7
4 8 Partner Analysis
5
Set your goal and suggest opening
6
Assess the social context of the negotiation
6.1
Component
6.2
Negotiation context
7
Present the problem to the other side
7
Trang 3I Build a Pre-Negotiation Process
1 The company's goals
The tangible objective of the enterprise is to reach agreement on quantity, productquality and price of pharmaceutical products imported from India to supply to thedomestic market
This goal is one of the most important negotiating goals, because it helps you to getthe best possible import prices from your Indian suppliers and ensure the quality ofyour products This goal helps businesses reduce production costs and increase profits
by purchasing raw materials at competitive prices, while ensuring product quality tomeet the needs of domestic customers
The invisible goal of the enterprise that wants to import Indian pharmaceuticals is tofind strategic partners in India to expand the business network and strengthen thepartnership This goal can be achieved by seeking and establishing reliablepartnerships with suppliers, joint venture partners or other partner organizations inIndia
Strategic partners can provide businesses with benefits, including access to localmarkets, local resources, business experience, and knowledge of local laws andcultures direction From there, businesses can take advantage of these benefits toenhance their competitiveness and grow their business in the Indian market
This objective also plays an important role in building long-term and stablepartnerships with Indian partners As a result, businesses can increase reliability andreduce risks in conducting business transactions and cooperation in the Indian market.When looking for strategic partners in India to expand business networks andstrengthen partnerships, enterprises need to consider the following issues in thecontract to ensure that their goals are achieved:
Trang 42 Identify key issues
In order to achieve the objective of importing pharmaceutical products from Indiaand supplying the domestic market, the following issues have been raised andconsidered in order of priority according to tangible goals:
Price of the product: Negotiating a fair price for the pharmaceutical products
is also crucial The contract should include the price, as well as the costs associatedwith transportation, packaging, and insurance
Shipping costs: The parties need to agree on the cost of transporting the product
from the factory to the customer's location This is a feature to select Incoterms, theresponsibilities of the parties are determined
Price: This is the most important issue in contract negotiation, the parties need to
agree on a product price in accordance with the product's quality and competition inthe market
Price application time: The parties need to determine the time to apply the price
on the contract, this helps to avoid the product price being changed during the contractperformance
Quantity of the product: The contract should specify the exact quantity of
pharmaceutical products that the business needs to import from India to meet thedemands of the domestic market
Delivery time: The contract should also specify the delivery time of the
products from India to the business's warehouse in Vietnam to ensure that the productscan be provided to the market on time
Delivery time: The parties need to make a decision on the delivery time in
accordance with the needs of the customer Delivery time must be clearly andspecifically defined in the contract
Shipping conditions: The parties need to determine the shipping conditions of the
product such as temperature, humidity, light, and other requirements to ensure that theproduct is not damaged during transportation
Payment terms: The contract should clearly define the payment terms, such as
prepayment, payment upon receipt, or payment by letter of credit
Trang 5Payment method: The parties need to make a decision on how to pay for the
product or service provided Various payment methods are available, including banktransfer, credit card, cash, or other forms of payment The parties should ensure thatthe payment method chosen is appropriate to the business environment and to thepayment regulations in that sector
Remittance costs: The parties need to make a decision as to who is responsible and
the costs involved in transfer funds for the payment These costs may includeremittance fees, currency conversion fees, or other costs associated with transferormoney across different countries
Shipping conditions: The contract should define the shipping conditions of the
products from India to the business's warehouse in Vietnam, including the shippingmethod, transit time, and shipping costs
Quality management: The contract should outline the responsibilities of all
parties involved in managing the quality of the products, including quality controlprocedures during the importation and supply process Issue:
Regulations and testing standards: The parties may disagree on specific
regulations and testing standards to be applied to the goods, which may include testingmethods, sample quantities, acceptance criteria, and other requirements related to theproduct testing process These agreement may also relate to the reliability andrecognition of the testing parties The parties may not agree on the method of errorhandling, compensation for damages, or retesting
Testing methods: The parties need to make a decision on the testing method for the
product This method must meet quality standards and be executed properly
Responsibility and costs: An issue that often arises is determining who will be
responsible for and bear the costs associated with product testing The parties mayhave the right to propose terms and conditions regarding cost-sharing for testing andadminister that the responsible party testing performs that meets the agreed-uponstandards and regulations
Warranty conditions: The contract should specify the warranty period and
conditions, including the warranty method and provisions for returns or refunds.Issues:
Trang 6The seller disagrees with the warranty period and scope This may relate to thelength of the warranty period, the scope of the warranty (including components, parts,
or warranty services), and the conditions applicable to the warranty, which mayinclude identifying factors that affect the validity of the warranty, such as improperuse, unauthorized repairs, or violation of usage instructions
Dispute over warranty scope and method of compensation: Parties may not agree onthe scope and method of compensation and resolution of damages during the warrantyperiod They need to determine the value of compensation, the scope of compensation,and the terms and conditions related to the resolution of damages
Time for payment: The parties need to make a decision on the timing of
payment for the product or service provided Payment times may vary depending onproduct type and industry regulations The parties need to ensure that the payment time
is satisfactory and reasonable to avoid negotiation during the transaction
Insurance: The cargo must be insured by an insurance company duly
established and capable of covering all risks to the cargo
Both parties may want to choose an insurance company that is favorable to theirside (for example, this insurance company is familiar to them, this insurance company
is located close to them, they are longtime partners with the insurance company, sothey can receive incentives when using the service, ) so it is difficult to agree on theinsurance company
Insured Perils: Any risk of material loss or damage caused by external factors andincluding risks of violent war, riots and civil riots (for countries at risk wars, riots, highriots need to claim these types of insurance)
3 Identify the benefits, BATNAS, resistance points of several issues:
3.1 About the price:
Position (Needs): Reduce product cost per unit by 5%.
Benefits (Interest):
o Reduce production costs for the company (buy input from partners forproduction)
Trang 7o The negotiation process is shortened because the company is in urgent need ofraw materials
Resistance point: The company's resistance point is at 0% to reduce the product
cost because the goal is integration negotiation, so if it is not possible to negotiate theprice issue with the partner, the company can use the solution Logroll method Withthis resistance point, we will be flexible so that both sides can gain maximum benefit
BATNAs:
o Offer to raise the minimum purchase amount, which means an increase in thenumber of purchases, at a lower price
o Look for an alternative partner
Sun Pharmaceutial Industrial Company provides API with the price of the first
4 products as our needs, but the remaining 1 product is not on the list of business items
of this company This is also a good alternative when providing our company with areasonable price, but when cooperating with this company, you will have to negotiatethe purchase twice
Company Dr Reddy offers all 5 API products at a price that is right for ourneeds, but their production scale is still small, not able to meet our purchasing volume,
it is necessary for them to grow the scale time (the company is in urgent need of rawmaterials)
3.2 About the timing of the price increase:
Needs: Only make product price increases every 6 months.
Interest: Helps stabilize costs for the company in the longer term (unless market
prices drop)
Resistance Point: Performed every 3 months the price move up.
3.3 About payment term:
Needs: 30 - 60 days from the date of receiving the product.
Interest: Allowing buyers enough time to check the quality of the product before
paying the seller
Resistance point: 20 days from the date of receiving the product Payment days
cannot be too short because businesses need enough time to use up all products instock before receiving new shipments
Trang 83.4 About payment method:
Needs: Use L/C payment method.
Interest: Helps to reduce payment risks, ensure the quality and quantity of goods as
well as help control costs for buyers
Buyer's preferred options:
o Payment by receipt of documents: this is a fairly safe payment method, becausethe buyer will only pay the seller after receiving complete and accurate documents.However, this method is not as secure as a letter of credit, because if the seller fails tomeet the documentation requirements, the buyer will not be able to pay
o Payment is guaranteed by bank guarantee: this is not recommended paymentmethod, as the seller will only be paid when the requirements of the guarantee are met.However, this method does not guarantee the buyer because if the seller fails to fulfillhis obligations, the buyer will have to pay the bank
4 Partner analysis
Partner strength
Is an Indian multinational pharmaceutical company specializing in the production ofAPIs, intermediates and nutritional ingredients Divi is a global leader inmanufacturing APIs with top quality, is one of the best, is on the top list of toppharmaceutical companies Thus, the partner brings negotiating power with goodquality, different from the market
Partners' interests and needs
Demand: Sell their pharmaceutical products at the advertised price.
Benefits: Selling at the right price to increase revenue for the business For the
negotiators, their successful negotiation is like a win over their partner (because theynegotiate in a split way)
Trang 9Partner's resistance point
Resistance point: The partner's resistance point will be quite high, close to the
announced selling price of 7%, because the counterparty wants a split type ofnegotiation, so they will want to maintain their maximum benefit In this case, weshouldn't pay a price so low that it might take them off the table
Their alternatives
BATNAs: We don't know the competitor's BATNAs well because we just started
doing business in this market and it's not easy to access the partner's client file Inaddition, this is also an international company, so the number of customers who want
to transact with them is really large, capturing their BATNAs will be very difficult
Initial goal and proposal
Objective: Increasing sales and growth is the main goal of the partner company To
achieve this goal, companies focus on developing new products, improving the quality
of existing products, enhancing brand promotion, expanding markets, and maintainingcustomer relationships now available
Initial proposal: After having the first meeting with the partner, the two sides had
discussions about the product as well as the product price
Trang 10Composition and structure of the partner's negotiating team
The negotiating team includes:
Lead Negotiator: The person who represents the Indian side in the negotiation
process The main negotiator is the person with high authority in the purchasingdepartment, the purchasing manager
Supporting Negotiator Team: Consists of people with certain expertise and skills
to assist the lead negotiator in the negotiation process These people can be businessexperts, lawyers, translators, technical support staff, etc
Reputation and negotiating style of partners
This is a large-scale and professional company, so Indian partners often appreciateprestige in negotiations They consider the two sides must demonstrate mutual trust inorder to reach a final agreement Therefore, they often place a high value on keepingtheir promises and fulfilling their commitments
During the negotiation process, the counterparty often has a rather rigid style andtends to be consistent about his or her point of view They often make requests andsuggestions clearly and firmly, and are often quite difficult to change their minds
Strategies and tactics that partners often use
They make it their goal to get the highest possible benefit in the contract oragreement To achieve this goal, they often employ strategies such as focusing onconvincing their counterparty of the necessity of the terms they want to achieve, orfinding weaknesses in the other's offer cooperation and use them to reach a betterdeal They also often use questions to learn about the partner's goals and requirements,thereby building an appropriate negotiation strategy
Partners often have a fairly independent attitude and do not like interference fromthird parties in the negotiation process They value self-responsibility and self-determination in the negotiation process However, they also promote fairness andintegrity in the negotiation process, and often do not accept agreements that lacktransparency or are ethically questionable
Trang 115 Set your goal and suggest an opening
Set goals
Successful negotiation with 6% discount for each product unit
The time to increase prices for product units is every 9 months
Make an opening offer
Discount at 5%
Price increase period is every 6 months
6 Assess the social context of the negotiation
6.2.Negotiation context
Current relationship with partners
This is the first time negotiating with a company partner, who have never had abusiness relationship with each other before Because they have never worked togetherand have not met for too long, the relationship between the two sides is not stable andthere may be many problems related to cultural differences
Negotiation time
At this time, the two sides have not had much contact, just had a meeting to discusssome basic issues such as product presentation as well as quotation Currently, bothsides are ready to meet to negotiate on important issues
Trang 12Time allowed for negotiation
Because of embracing the Indian culture that loves building long-term relationships,the company has arranged more time for the negotiation process to ensure that thenegotiation process goes smoothly and safely The content of the negotiation could bemore detailed
Differences in culture, language, law, politics
Vietnam and India are two countries with different cultures, languages, laws, andpolitics Here are some notable differences:
Culture: Vietnam has an oriental culture, while India has a Hindu culture The
values, practices and customs of the two countries are significantly different Forexample, in Vietnamese culture, respect for family, religion, age, and high civilization
is considered very important Meanwhile, in Indian culture, respect for religion,family, customs and culture is also considered very important
Languages: Vietnamese and Hindi are the two main languages spoken in the two
countries While Vietnamese has the Latin alphabet, Hindi uses the Devanagarialphabet Besides, both countries use English as the language of commerce andbusiness
Law: Both Vietnam and India have their own legal systems However, the legal
system of India has many differences compared to the legal system of Vietnam Forexample, the civil and criminal legal system in India is different from that of Vietnam,especially in matters relating to property and human rights
Politics: Both Vietnam and India are republics However, India has a more complex
political system than Vietnam, with many political divisions and parties
In terms of customs and standards, Vietnam and India have many differences In
Vietnam, for example, respecting age and family is very important, while in India,respecting one's religion and social status is essential This also affects the way ofcommunication and relations between individuals in the two countries
In terms of cultural values, India has many ancient and rich values such as respect
for tradition and family, tolerance and openness, respect for religion and important
Trang 13polite communication and solemn Meanwhile, Vietnam has unique cultural valuessuch as respect for tradition, ingenuity in art, hospitality and solidarity, sincerity andhonesty.
Overall, the cultural differences between Vietnam and India are very diverse andcomplex, which should be kept in mind during the negotiation and communicationprocess between the two companies
The customs, standards, ethical aspects,
Vietnam and India are two countries with separate cultures and developmenthistory, so there are many differences in customs, standards, and ethical aspectsbetween these two countries Here are some key differences:
Customs: Vietnam and India have different customs For example, in India, the
practice of vegetarianism is common and respected by many, while in Vietnam,vegetarianism is not a common practice and is not followed by many people Inaddition, India has a rich variety of religious practices and rituals, while Vietnam hasmany typical folk practices such as temple festivals and pagoda festivals
Norms: Standards and behavior of Vietnamese and Indians are also different For
example, in India, respect for elders and family is very important, while in Vietnam,individual independence is more respected In addition, in India, it is common toaccept delays in work and appointments, while in Vietnam, accuracy and punctualityare valued more
Ethical aspect: Vietnam and India have different moral and religious values For
example, the popular religions in India are Hinduism, Buddhism and Jainism, while inVietnam are Buddhism, Taoism, and Confucianism In addition, in India, peoplegenerally respect life and do not kill animals, while in Vietnam, eating animals iscommon and accepted
In summary, Vietnam and India have many differences in terms of customs,standards and ethical aspects
Trang 147 Present the problem to the other side
Specific negotiation agenda/schedule
Communicate with partners to arrange schedules, plan meetings in advance, a clearplan of the time and content of the meetings Because Indians have a multi-line,flexible time culture, they often have time adjustments before the meeting, thenegotiator needs to be mentally prepared for this issue If possible, the partner should
be proposed and arranged to include cultural experiences and exchanges between theparties Building relationships with partners can facilitate contract negotiations
How to start negotiating
You can start with a greeting, exchange basic information about yourself and yourcompany/organization so that your partner can better understand you Indians beforeentering the negotiation process, they often talk on the sidelines a lot to getinformation Therefore, negotiators need to learn about popular topics in India tocreate harmony before entering into negotiations
Before starting formal negotiations, it is necessary to discuss with the other partythe content and objectives of the negotiation This helps ensure that both sides clearlyunderstand what needs to be achieved in the negotiation There should be a carefulpreparation of the information and status of the partner to be able to create agreementand interest in the issues to be discussed
Trang 15Solution if the negotiation is not successful
o Continue to negotiate: If no agreement is reached in the first negotiation, theparties can continue to negotiate to find a suitable solution to the problems
o Seek other solutions: If the parties cannot reach an agreement through directnegotiations, they may consider other solutions such as arbitration, dispute resolutionthrough the courts, or other methods of settlement resolve other disputes
o Take the issue to a higher level: If face-to-face negotiations fail, the parties cantake the issue to a higher level in their organization to find a suitable solution
o Re-discuss conditions: In some cases, renegotiating terms can help the partiesreach an agreement during the negotiation process
o Pausing negotiations: In some cases, pausing negotiations can be a solution togive the parties time to reassess the situation and decide to resume negotiations later
Methods to track resolved issues
There should be a system for recording and tracking the matters discussed to ensureclarity and avoid future misunderstandings or disputes
Mechanism to amend the agreement when necessary
Use an amended clause: An amended clause can be added to the original agreement
to allow the parties to make amendments if there is a change in business conditions or
if an unexpected situation occurs This provision should be written clearly andspecifically to avoid any misunderstanding about the specific conditions foramendment
Agreement on Amendment Process: The parties need to agree on a process toamend the agreement This process should ensure that amendments are made in a fairand transparent manner, and that all parties are included in the revision process
II Prepare information for the negotiation phase
1 Summary of points to note in communication with partners
Non-verbal communication in India
Trang 16Greetings: Avoid greeting someone with a hug or a kiss unless you know the
person well Pressing your palms with the fingers facing upward is a common greeting
in India, and together shaking hands is becoming more and more popular However, ifyou are a man greeting a woman, it is best to wait for her to extend her hand first
Physical contacts: If you don't know the other person, it is best not to touch them.
Bear in mind, though, that if they are the same gender as you, they may touch yourarm or hand when speaking
Eye contact: People in India maintain less eye contact than other Western cultures.
They keep it minimal, especially between genders and with those in a higher rank thanthem
Gestures: The nodding gesture where the head is moved up and down, and
sometimes diagonally tilted shows approval or understanding
Punctuality: Indians typically have a relaxed approach towards timekeeping and
punctuality Adaptability is more important than strictly sticking to a timeframe Inmore relaxed events suc h as friend gatherings, it is common for people to arrive atevents 30 minutes to an hour after the designated time However, Indians will usuallyobserve punctuality in a formal context such as important business meetings,appointments, or when visiting a doctor
Negotiations: Negotiations will probably take longer than in other countries They
progress partly because they are based on building trust
Verbal communication in India
Indirect communication style: Communication is indirect, and negative feedback
is provided in a subtle, diplomatic way "Yes" can have different meanings An Indianmay say 'yes' to indicate that they are listening to the speaker, whilst indicatingdisagreeableness or refusing through their body language You won't hear "no" veryoften, as it sounds harsh Instead, they may say “we'll see”, “yes, but it may bedifficult”, “I'll try” In India, the polite way to say no is to say, "I'll see what I can do",
or something to that effect, no matter how impossible the task may be This pointshould be noted, especially when you have a direct communication style, it will be
Trang 17easy to miss the subtle connotations of Indians Besides, it is necessary to avoid talkingtoo directly and directly because this can adversely affect the negotiating atmosphere.
Silence: Sometimes people will remain silent rather than provide a direct 'no'
Small talk: It is rather common for Indians to ask straightforward, personal
questions by Western standards, such as asking about salaries, kids, or family plans.You may find some questions Indians ask to be quite forward or frank by Westernexpectations (eg 'How much do you earn?') However, these kinds of questions arecommonplace in India
Emails: Emails tend to include a lot of formalities and are longer than in other
Respect your partner's culture: Indians have a very diverse and rich culture, so it
is very important to respect and understand their culture Pay attention to Indian dress,manners and customs
Give context: Explain what you need and why, and how individual tasks fit into
overall goals India is a high-context culture, which means that good communication issophisticated and messages are nuanced and layered Since not everything is clearlyspelled out, context is crucial to ensure effective communication
Invest in building relationships:
Spend time with your teams in India, have frequent team and 1:1 meetings, andbuild relationships with them This will allow you to catch issues early, before theyescalate Once you build relationships and establish trust, your peeps in India will feelmore comfortable being more direct and speaking their minds without you needing to
Trang 18read between the lines Therefore, our company needs to receive their enthusiasm andfind ways to create and maintain good relationships with partners.
Create a comfortable communication space: Creating a comfortable and friendly
communication space will help increase professionalism and reduce stress during thenegotiation process Try to keep conversations off-topic to convey interest and show afriendly personality
Show care and respect for your partner: Always show care and respect for your
partner by listening to and understanding their point of view Ask and answerquestions honestly and seriously
Use clear language and avoid unnecessary words: Using clear language and
avoiding unnecessary words is very important in the negotiation process Use precisewords to convey information effectively and avoid using words that are confusing oreasily misunderstood
Get to know the partner and the negotiation in advance: Before you start
negotiating, learn more about the partner and the negotiation so you can best prepare.Learn about the history, culture, politics, economy and other issues relevant to thepartner
2 Tentative Agenda
After officially meeting to exchange basic information, the two agreed to conduct around of negotiations on signing an API business cooperation contract:
o Proposed Agenda for Negotiating Rounds with Indian Partners:
May 7, 2023, morning, at meeting room A204
Greet, introduce and exchange information about the company and products
Describe the partnership strategy and its benefits
Trang 19Discuss the market potential and the economic, political and legal factors affectingbusiness operations.
May 12, 2023, afternoon, at meeting room D306
Discuss product pricing policy
Provide specific solutions to the problem of increasing the cost of the product.Evaluate and discuss production capabilities and quality control
May 16, 2023, morning, at meeting room H313
Negotiate the terms of the partnership contract, including distribution, promotion,price, production, and quality
Review payment methods and resolve financial issues
Define commitments and timelines
May 21, 2023, morning, at meeting room A102
Adjust and sign cooperation contracts
Make deployment plans, deliver goods and share information
Recommend staff training and support activities, if necessary
o Proposed Agenda for a Negotiation with the Indian Partner:
Time: May 12, 2023, from 14:00 to 18:00
Venue: Meeting room D306
Programme:
Trang 2014h-14h15: Welcome and introduce the representatives of the two sides.
14:15-15:15: Dialogue to learn about culture, customs, and things to know whenworking with Indian partners
15:15-15:45: Discuss product and price related issues
15h45-16h15: Break and tea party
16h15-17h: Evaluate and discuss production ability and quality control
17h-17h30: Give specific solutions to the problem of increasing the cost ofproducts
17h30-18h: Summary and goodbye
Note: The program is subject to change depending on the actual negotiationsituation
III Draft contract
PHARMACEUTICAL SALE CONTRACT
No: May 2022/PSC-01
Date: 2/5/2023
This Contract was made and entered into by and between:
Party A (The Seller)
Trang 21Company name : Divis Laboratories Ltd.
Legal representative : Nilima Prasad Divi Position : Whole Time Director
Party B (The Buyer)
Company name : NT Limited Liability Company
1 Acquisition Cost. “Acquisition Cost” shall mean the invoiced price paid by
either Party to any Third Party for acquiring actual Active Pharmaceutical Ingredients,Excipients or packaging materials hereunder, including, but not limited to, shippingand handling costs and customs charged and paid by such Party to any Third Party in