Bakra Beverage Negotiation

Bakra Negotiation

• The main priorities of Bakra were to use this deal to attract more clients and give the company the option to purchase Jayyid.

o This deal met both of these goals, and I recommend accepting it.

• This deal will put Bakra Beverage back on the map as a key beverage distributor in Kumar. It will attract additional clients and be a step towards ending the company’s financial difficulties.

• This deal will also start to provide the financial security needed if Bakra chooses to purchase Jayyid.

o Purchasing Jayyid will give Bakra the option of expanding its operations beyond soft drinks.

• This deal will also give Bakra the opportunity to prove that it is still a reliable company that can utilize the connections it has maintained in Kumar.

• While landing the contract was what was really important to Bakra, the money the company will get under the contract will go far in rebuilding the company and help it reclaim the reputation it once enjoyed.

• The company would have been willing to do the contract for free, if not for reasons of professional pride, reputation, and the potential impact on future engagements.

• Our ideal price was double our old contract price with Bebsico, which would have been $6.6 million. While the price we were able to get is lower than that because we are no longer the key player we once were in the distribution market, we can get up to $6 million as the company is able to reach a greater percentage of market saturation.

• Our target, based on other contract prices, was $4.2 million.

• This deal is above the target price, and is a large amount above the contract prices for both Bebsico’s deal in Yoman and our recent deal with Bebsico in Melhand. It is also well above the contract prices Bakra has gotten over the last few years.

Leverage—How I Learned Bebsico Needed This Deal

I was able to get such a high contract price because Bebsico made me think it was willing to pay a high amount by what it said during the negotiation. First, Bebsico said it could not discuss why the deal with Kabir fell through due to confidentiality. However, later in the negotiation, Bebsico said that it was only going to pay Kabir $4.4 million for this contract, and that amount was really all it could spend. But, when I pushed back and said we were rebuilding as a company and needed a certain baseline contract price to reach 75 percent market saturation, Bebsico kept raising the price it would pay. When Besico went above $4.5 million, I had a good feeling I could keep pushing and get more money.