Hitotsubashi University Blue Inc.
<General Strategy>
Blue will negotiate perusing Blue's future profit while creating a good relation with its key
customer Red at the same time. Future profit is to acquire the maximum profit from the EC site
development and Robot project. In addition to create more business opportunity in the long run.
<Importance of issues in E-commerce >< Importance of issues in Robot case>

1. Years of support service

1.Retain ownership of IP rights

2. Fee for support service

2. Length of exclusivity for Red

3.Charge for site development

3. Type of robots to be developped

4. Omni Channel Marketing & Blue V. Negoland<<Aim of the Negotiation for EC site development >>1. To develop a good reputation in the EC site development business and make it Blue's main business inthe future.

Term of contract

Fee of service

Site developmentTop

5 years30%

20 million

Bottom

5 years

20%

15 million

Priority

1.

2.

3.

4.

5.

6.

GreenTerm

5 yr

5 yr

5 yr

4 yr

2 yr

2 yr

5 yr

Fee

30%

30%

20%

30%

30%

25%

30%

Dev. Fee

20 mill

15 mill

15 mill

20 mill

20 mill

15 mill

10 milProfit

111 mill

106 mill

75 mill

84 mill

43 mill

34 mill

82 milStrategy
Blue wants to provide EC site development services to its valued customer, Red, hoping that itwill lead to further business opportunities in Negoland. During the negotiation, Blue will explain why it ischarging Red US$20 million for e-commerce site development. If Red insist on lowering the development
charge and ongoing support service fee, Blue will make it clear that Blue is willing to offer any discount oncharge and fee, if the term of the contract will be extended and fixed.

Blue will offer 25% for ongoingsupport service fee, if Red agrees to make the term of the contract to 5 years.
Blue will explain the advantages for continuing the ongoing support service for longer period of time than
1 year.

In the course of that Blue will address Red's reasons and concerns for limiting period to 1 year.

Blue will make sure that Red understands how this service is crucial to running and managing the new
e-commerce site. Other vendors were very fond of it and opted for a 3-5 year period.
1Hitotsubashi University Blue Inc.
1.

Details of coordination between the e-commerce and Red's physical stores in Negoland<Goal for omni channel strategy>
Offer innovative ideas to Red to achieve its goal of integrating online and offline channels into its
business .
Strategy
Blue shall propose the following omni channel strategies:
1.

Delivery from physical stores2.

Self Service Register (Fast track / bar code / stock information)

3.

Online video call from fitting room

4.

Online forum for customers on the EC site (customers can share pictures about their outfits, discuss

fashion, enables Red to carry out market research)5.

Convenience store delivery

Also, Blue will listen to Red's ideas on omni channel strategy and try to incorporate both parties’ strategies
and ideas into the final plan. The more services they agree on, the longer the ongoing support service has tobe.

<Goals for Blue Village Negoland>Top

Keep the contract and the consignment fee of 25%

BottomTerminate the contract2

Hitotsubashi University Blue Inc.

Strategy:
It would ruin the reputation of Blue Village Negoland if Blue lets go of such a famous vendor, therefore
Blue aims to keep the contract with Red. Blue has to provide them services that persuade them to keep theircontract with BNV: Blue would offer to lower the consignment fee, or even to abolish the fee. Blue willpropose to keep the line-up of Red on BNV, but for purchasing the customer would be redirected to Red’ssite.
If Red is willing to secure its ties with Blue, Blue will propose account sharing of Blue Village Negoland toRed’s EC site.

<Aims for Robot Development>
1. Develop robots that satisfy the needs of society
2. Extend Blue’s share in the robot industry and generate profits by 20191.

Type of robots to be jointly developedTopCare Support type first and then Communication/Security type robots

BottomDevelop Care Support type robots onlyStrategyBlue will explore Red's underlying reasons for developing Care Support type first. Then, Blue
will explain advantages for developing Communication/Security type Robots. After clarifying both parties
intentions and interests, Blue will attempt to come up with solutions acceptable to both parties. If bothparties end up developing Care Support type first in future, Blue will not give up the type of robots without
any compromise from Red on the exclusive right term.
2.

Ownership of intellectual property rights in and to the robots to be developed

TopSecure all intellectual property rights

BottomGrant Red exclusive rights for a limited period of time

Strategy
Blue will try to explore Red's reasons for retaining intellectual property rights then explain themthat this issue is non-negotiable for us. Blue can accommodate their requests for exclusive rights inexchange.
Blue wants to reward Red for its contribution, but the IP rights have to belong to Blue in order to expand its
business. Blue can license Red the rights to use the robots but exclusivity has to be limited to a few years oftime.
3Hitotsubashi University Blue Inc.

3.

Exclusive agreement
Top

Term of exclusive agreement is 1 year

BottomTerm of exclusive agreement is 2 years*In all cases, it is necessary to add a clause in the contract allowing Blue to lease the robots to parties other than Red
in the event of Red’s refusal to use the robots.

Strategy
Blue will start out with a 6 months exclusive period. The reason would be securing funds for thedevelopment of the second type of robots and recouping the initial investment costs. If Red gives
convincible reasons for longer exclusive period, Blue will offer a 1 year period. Blue will inquire Red about
the number of robots they are intending to use and request Red to use at least 1 robot in each of theirfacilities. In any event, Blue will request to add a contract clause, which would allow Blue to lease therobots to other parties in the event Red does not use them in spite of the exclusive period. If Red agrees onusing the robots in all of its facilities, the term of the contract could be extended to 1,5 years.

BATNA
If Blue and Red could not reach to an agreement, there is the option of dropping the agreementwith Red. Blue could make a new offer to Green for e-commerce development and Purple – an Arbitriancompany, for joint development of health care robots. Blue will express that possibility as a negotiation
tool whenever needed — nevertheless, this option shall not be de facto considered as it would be greatly
damaging to Blue.
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