Question & Answer: An Australian firm that producing meat pies want to expand their business and start selling…..

An Australian firm that producing meat pies want to expand their business and start selling their products in Indonesia. How should they deal with the following problem (Please use academic style of answers)?

Case scenario:

The Indonesian local distributors want the Australian company to reduce the cost price of their meets pies but the Australian company already offered lot less price than that they sell in Australia and they cannot reduce the price too much in order to keep margin to meet the threat of constant devaluation in the Indonesian currency.

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Q1) What is the most appropriate negotiating style of the Indonesians to solving this particular negotiation?

Q2) What are valuable advises on decision making and negotiation styles of the Indonesian?

Expert Answer

ANS 1: Collaborating would be the most appropriate style that should be used by the Australian firm. The Australian firm cannot reduce the prices but wants to do business in Indonesia hence they have to come to one page in which mutual benefits are to be sought i.e. negotiation should be done in a way that it should be beneficial for both the parties. Both the parties’ needs to sit and collaborative negotiation would solve this issue.

ANS 2:

Some of the important advices are:

  • They should try and get profits of this deal as Australian company is keen in setting up the business.
  • Their negotiating strategy should be accommodating thinking of the long term benefits.
  • FDI i.e. foreign direct investment project should also be considered while negotiating.
  • They should not let the deal lose as it is beneficial for both the parties in the long run

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