Osaka University

Memorandum for Negotiation

Table of contents
Ⅰ Position of Blue Corporation
Ⅱ Development of robots for the elderly(1) Negotiation Background(2) Priority of issues(3) Strategy
Ⅲ Development of the e-commerce site for Red(1) Negotiation Background(2) Priority of issues(3) Strategy

I. Position of Blue Corporation
Blue Corporation (hereafter Blue) is now in a situation in which the source of its revenue islargely dependent on the consignment service of its apparel business. Although the businessitself is stable, Blue is looking to diversify its sources of income.
Build two businesses: development of robots and e-commerce sites, is quite important in thisregard.
Blue is not prioritizing its robot development or EC site development business. However, interms of its robot development business, Blue does not have another good options as bestalternative to a negotiated agreement (hereafter BATNA). Therefore, to conclude anagreement with Red in robot development is more important than EC sites development
business in this negotiation.
Therefore, Blue hopes that robot development issues will be discussed first, but it is also
possible to discuss robot and EC businesses jointly, if Red and Blue cannot proceed to any
further agreement on one topic.
The following sections will explain the details for each issue.

Ⅱ. Development of robots for the elderly[1] Negotiation Background

Current situation
Have not been able to sellenough to recover R&D
costs
R&D expenditure is limited
to grants received fromthe government

Future vision

To make profit
in the robot
business by2019

Goal for this negotiation

Future vision

To establish
superiority in therobot business among
the competitors

Goals for this negotiation①To secure lease contract for robot developedby 2019

1② To invent profitable robots
with great potential③ To obtain the applicabletechnology for the futurebusinessOsaka University

Memorandum for Negotiation[2] Priority of issues
Degree of priority will be shown in the following format: ☆: contribute, ☆☆: contributedirectly, ☆☆☆: contribute directly and necessary for Blue
RobotIssues

Contribution to the Goals
shown above ①～③①②

Order ofpriority

③☆☆☆

☆☆☆

1

Type of robots to be jointly developed

2Intellectual property right

☆☆

☆☆☆

☆☆☆☆☆

3Exclusive lease agreement

☆☆☆

☆

☆☆☆☆

[3] Strategy★TL=Top Line; The most desirable agreement for BLUE
BL=Bottom Line; The least desirable but still acceptable agreement for BLUE

(1) Type of robots to be developed jointly
In the beginning of the negotiation Blue will ask Red's current problems and demands. After
deepening its understanding of Red's position, Blue will suggest a suitable robot to be jointly
developed. For Blue, communication security type of robots is the most preferable option
considering the great potential demands in various markets not only in the elderly care market.
Care support or independent type of robots is also acceptable bearing in mind the short-term
profits. Therefore, Blue can agree to develop such robots if Red shows a strong preference forthem.
(2) Intellectual property rights
Blue will make it clear to Red that it is critically important for Blue to obtain all associatedintellectual property rights. This is because the rights are indispensable to protect thetechnologies and designs on which the expanding robot business will be based. Joint ownershipwith Red is not an option for Blue.
(3) Exclusive lease agreement
First, Blue will show the necessity of making the robot business profitable by 2019, hence ashorter agreement is preferable. Furthermore, Blue aims to add the condition that Red should
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Osaka University

Memorandum for Negotiation

introduce at least one robot for each facility in Negoland. In case that Red needs to have alonger-term agreement, Blue will ask that Red leases multiple robots for each facility to recoup
the R&D cost.
[4] BATNA
In case that Blue fails to achieve the goals in the negotiation with Red, Blue will consider ajoint development project with Purple Corporation in Arbitria instead. However, it is unclear
about the extent to which Purple would accept our requests. Hence Blue cannot easily move tothis option as BATNA.

Ⅲ . Development of the e-commerce site for Red[1] Negotiation Background

Future vision

Current situation

Dependency on consignment
service
Under developed e-commerce
support businessTo build 2 stable business:
EC site development &support service andConsignment service throughBlue Village Negoland(hereafter BVN)

Saturation of the domestic market→Need to expand the businessabroadTo expand the business inNegoland as a first step

Goals for this negotiation④To achieve results in long term management of Red’s EC site.
⑤To obtain funds enough to develop and manage Red’s EC site

[2] Priority of Issues
Degree of priority will be shown in the following format: ☆: contribute, ☆☆: contribute directly,☆☆☆: contribute directly and necessary for BlueECIssues

Contribution to the Goals
shown above ④～⑤④

1

Charge for the development

2

Ongoing support service

3

Order ofpriority

⑤‐

☆☆

☆☆

Fee☆

☆☆

☆☆☆

Term☆☆☆

☆☆

☆☆☆☆☆

☆

☆

☆☆

Omni-channel Strategy3

Osaka University
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Memorandum for Negotiation☆☆☆

Blue Village Negoland

☆

☆☆☆☆

Although the issue 4 ‘Blue Village Negoland’ is not clearly written as matters, keeping Red in
BVN is necessary for Blue because Blue considers it important to maintain BVN even after
the commencement of Red's EC site.

[3] Strategy(1) Presentation about the services and omni-channels
Blue will give a short presentation which includes the contents of development/ongoingsupport service, and suggestions regarding Omni-channels. In the end of the presentation Blue
will suggest the price; development fee, terms of the contract, and fee for ongoing support
service. For Blue, long maintenance service with a high commission will make the greatest
profit. Blue will emphasize the quality of the E-commerce site and let Red know the value ofmaking a longer contract with Blue. In the case that Red has a strong interest in keeping thedevelopment fee or maintenance fee low, it is important for Blue that Red concludes a longterm contract with Blue in exchange for the lower cost.
(2) Blue Village Negoland and cooperation with it
It is quite important for Blue to keep Red in BVN for several years ahead. This is because
not only is Red one of the largest clients of BVN, but also Red's withdrawal from BVN could
lead to the loss of potential business partners from BVN. Blue will show that BVN and its EC
site do not compete with each other, and that we can expect a synergy effect between them.
[4] BATNA
In the case that Blue is not satisfied with the agreement which suits the goals mentioned
above, Blue will aim to have another EC sites development contract with Green Corporationin Negoland. Green will be a good business partner of Blue because Green is interested not
only in EC develop and maintenance service but also in wholesale business through BVN.
If the negotiations reach a deadlock on Red's idea, that is, less than 25% of the fee for an
ongoing support service AND the contract for less than 3 years, Blue will intimate thepossibility of making a contract with Green as a competitor of Red.

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