TEX ITALIA VERSUS AZ TEXTILES

THE DEADLOCK IN NEGOTIATIONS

Group 7
Amol Maske | Harichandana Kolagani | Devashish Motwani | Lokpriya
 Table of Contents
1. The three Parties
2. Conflict resolving strategy
3. BATNA & ZOPA
4. Powers In Negotiation
a. Power of BATNA
b. Power of Competition & Legitimacy
c. Power of Commitment
d. Power of Expertise
e. Power of Knowledge of Needs
f. Power of Investment
g. Power of Morality
h. Power of Punishment or Rewarding
i. Power of Precedence
j. Power of Persistence
k. Power of Symbols
l. Power of Risk Taking
m. Power of Identification
n. Power of Attitude
o. Power of Persuasive Capacity
 Three Party Negotiation
Creative Clothing and Textiles TexItalia AZ Textiles

Buying House situated in Italian retailer based in Florence., founded in A woven garment stitching unit in
Pakistan,founded in 2000 early 40s Pakistan founded in early 70s

Major clients TexItalia Major sourcing countries Brazil, Morocco, Tunisia, Major clients Auchan, Carrefour
Turkey, Pakistan, Portugal

Iftikhar Khurshid: Khurshid was the Alessandro Baresi: Baresi was 45 years old. He Imran Saeed: Saeed was 27 years
53-year-old Managing Director was the Chief Buyer of TexItalia till December old. He was the Marketing Manager
Mario Maldini: Maldini, who was 55 2002 at AZ Textiles.
years old, was an equal partner with Luigi Andenna: Andenna was 32 years old. He
Khurshid in CCT became the new Chief Buyer of TexItalia when
Baresi was fired

One of the orders delivered to TexItalia by AZ Textiles had quality problems and TexItalia had raised a
claim for the defects. To date, AZ Textiles had not paid the claim and as a result TexItalia had stopped placing
further orders with AZ Textiles. CCT being the buyer and represented TexItalia procurement interests in
Pakistan. TexItalia’s denim business with AZ Textiles was a major source of revenue for Creative Clothing and
Textiles and Khurshid was anxious to get the conflict resolved
Conflict Handling Strategy Followed

TexItalia: Importance of relationship with both the

parties was low since they have multiple options. But the
importance of achieving the goal was high since they
require the refund of the defective shipment. Hence their
default stance was competing.

AZ Textiles: Importance of relationship and achieving

the goal both seems to be moderate. Hence their default
stance has been to compromise and try to settle the
issue. Although initially they avoided reaching the
resolution quickly as it seems it wasn't considered on
priority.

Creative Clothing and Textiles: Both the

importance of achieving goal and relationship with
TexItalia was of high importance. Hence it was evident
that Mr.Khurshid was constantly following a
collaborative approach where both the parties reach a
common ground.
 BATNA & ZOPA
TexItalia AZ Textiles

AZ Textiles paying the full refund upfront and ● First Offer: 10% off on future orders until the
offered help to AZ Textiles in finding a customer claim had been reimbursed in full
for the rejected garments.
● Second Offer: 15% off on future orders until the
Number of trousers = 5000 claim had been reimbursed in full
Price per trouser = $5
Total amount = $25000 ● Third Offer: 20% off on future orders until the
Claim (with handling charges) = $30000 claim had been reimbursed in full

Creative Clothing and Textiles

When the negotiation were not reaching towards any zone of possible agreements, CCT was thinking of
paying the outstanding amount to TexItalia themselves. However they aren't sure about it
POWERS IN
NEGOTIATION
BATNA
Number of trousers = 5000
Price per trouser = $5
Total amount = $25000
Claim = $30000

BATNA (German customer) = 4 per

trouser so $20000
7
Competition
& Legitimacy
In the negotiation phase AZ textile told
TexItalia that they have an offer from a
German buyer at $4 per trouser hoping to
turn the negotiation in their favour. But then
TexItalia played it down as a bluff, as AZ
textile lost legitimacy in their eyes

8
Commitment
Iftikhar Khurshid (the Managing Director of
Creative Clothing and Textiles) showed commitment
as a buyer and served as a bridge between the
customer (retailer/wholesaler) in the foreign market
and the supplier (manufacturer) in the domestic
market

9
Expertise
Creative Clothing and Textiles took care of the
entire procurement process and functioned as the
customer’s representative, ensuring that the
customer’s requirements were met by the
manufacturer. They were also vital for the
manufacturers as they marketed the manufacturers
in the export markets to important customers

10
 Knowledge of
“Needs”
CCT was one of the few buying houses which dealt with many
product lines. The main reason for this was that Italian retailers
tended to order different types of products for retail purposes. If they
could coordinate all this business through one buying house, it would
be ideal for them. If the customers had to work with multiple buying
houses in the same supplier country, it would take them more time
and effort. Thus, from the perspective of providing maximum value
to its customers, CCT decided to work with many product lines
hoping to attract customers
11
Investment
The collaboration was new and thus
investment on part of TexItalia in AZ textile
was less. Hence for TexItalia it did not
matter whether their collaboration with AZ
Textile survived or not.

12
Morality
AZ Textile even after acknowledging that the
goods were below standard failed to offer good
enough compensation to TexItalia. Here, AZ
Textile failed on morality front and thus bad
news about AZ Textile spread among the
market players, impacting company’s
reputation
13
Punishment or
Rewarding
Relationship with CCT appears to be rewarding
for both the other parties involved: the
manufacturer and the customer.

However, CCT does not give the impression of

a company who could hurt its partners or
muscle its way through a negotiation

14
Precedence
The only precondition for TexItalia to again work with AZ
Textiles was simple-payment of the entire claim upfront.

This is summarized in Luigi Andenna’s words:

“We cannot give a supplier more orders when we know that
they have had a bad past with us and are not good at clearing
their debts. The way we operate, we want the suppliers to clear
their past bad records before we can talk about future
business.”
15
Persistence
AZ Textile was being persistent in the negotiation
with offering 10% discount until the claim had
been realised. But then shortcomings in
legitimacy and morality made it difficult for AZ
Textile to negotiate.

16
 Symbols
Khurshid’s partner Mario Maldini was an Italian living in
Rome. Maldini had vast experience in the textile sector and
had represented various suppliers as their agent in the Italian
market. This gave CCT the competitive advantage in Italy.
Khurshid, on the other hand, worked to build a strong
relationship with Pakistani manufacturers and was responsible
for monitoring production and communicating with customers
regarding progress of their orders
17
 Risk Taking
Ac CCT is the middleman so Khurshid tried to
convince AZ textiles to pay off the claim because
texitalia was a huge client for CCT and 80% of the
business was dependent on texitalia so they did not
want to lose their potential customers. Whereas Saeed
was unable to make the decision because the owner of
AZ textiles was not present in the country so Saeed
could not take decision on his own.
18
Identification
When AZ bluffed about having another Germen
customer ready to take rejected garments at $4
and offered discount at 10% until they can clear
the claim, they come across as unethical and
untrustworthy partner and on the verge on
being identified as that for all future
transactions

19
Attitude
Iftikhar Khurshid, MD of CCT is the middle
man in this negotiation. He is negotiation for
his clients. so he is showing the power of
attitude as he has less to lose in this deadlock of
negotiation

20
Persuasive capacity
once the three parties, Taxitalia ,CCT and AZ
textiles clear the miscommunication between
them and establish proper communication
channels it will establish mutual trust and
credibility for the future negotiation. In the
current situation, there is a lack of ethos and
pathos in between them

21
Thanks!

22
 The slide title goes here!

Do you know what helps you make your point clear? Lists like this one:

Because they’re simple

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And because you’ll never forget to buy milk!

And the most important thing: the audience won’t miss the point of your
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23
 Maybe you need to divide the content

MERCURY VENUS
Mercury is the closest planet to the Sun Venus has a beautiful name and is the
and the smallest one in the Solar System second planet from the Sun. It’s terribly
—it’s only a bit larger than our Moon. hot—even hotter than Mercury—and its
The planet’s name has nothing to do atmosphere is extremely poisonous. It’s
with the liquid metal since it was named the second-brightest natural object in
after the Roman messenger god, the night sky after the Moon
Mercury

24
Maybe you need to divide
the content

Mercury is the closest planet to the Sun and the Venus has a beautiful name and is the second
smallest one in the Solar System—it’s only a planet from the Sun. It’s terribly hot—even
bit larger than our Moon. The planet’s name hotter than Mercury—and its atmosphere is
has nothing to do with the liquid metal since it extremely poisonous. It’s the second-brightest
was named after the Roman messenger god, natural object in the night sky after the Moon
Mercury

25
 You could use three columns, why not?

MARS JUPITER VENUS

Despite being red, Mars is a It’s a gas giant and the Venus has a beautiful
cold place, not hot. It’s full biggest planet in our Solar name and is the second
of iron oxide dust, which System. Jupiter is the planet from the Sun. It’s
gives the planet its reddish fourth-brightest object in terribly hot—even hotter
cast the sky than Mercury

26
 A picture always
reinforces the concept

Images reveal large amounts of data

quickly, so remember: use an image
instead of long texts. Your audience will
appreciate that.

Venus has a beautiful name and is the

second planet from the Sun. It’s terribly
hot—even hotter than Mercury—and its
atmosphere is extremely poisonous

27
Awesome words
Because key words are great for catching your audience’s attention

28
 Infographics make your idea understandable…

MARS
Despite being red, Mars is a
cold place, not hot

JUPITER
It’s a gas giant and the biggest planet
in our Solar System
VENUS
Venus has a beautiful name, but
it’s terribly hot

29
 MERCURY
Mercury is the closest planet to the Sun and is only a bit larger
than our Moon

JUPITER
It’s a gas giant and the biggest planet in our Solar System

MARS
Despite being red, Mars is a cold place, not hot. The planet is
full of iron oxide dust

VENUS
Venus has a beautiful name, but it’s terribly hot, even hotter
than Mercury

If you want to modify this graph, click on it, follow the link,
change the data and replace it

30
 … and the same goes for tables

MASS DIAMETER SURFACE GRAVITY

(earths) (earths) (earths)

MERCURY 0,06 0,38 0,38

MARS 0,11 0,53 0,38

SATURN 95,2 9,4 1,16

31
This is a map
 A timeline always works fine

DAY 1 DAY 3 DAY 5

Mercury is the Despite being Saturn is composed
smallest planet in red, Mars is a mostly of hydrogen
our Solar System cold place, not and helium
hot

DAY 2 DAY 4
Venus has a Jupiter is the
beautiful name, biggest planet in
but it’s terribly our Solar System
hot

33
4,498,300,000
Big numbers catch your audience’s attention

34
 333,000.00earths is the Sun’s mass

24h 37m 23s

is Jupiter’s rotation period

386,000 km
is the distance between the Earth and the Moon

35
 Sometimes, reviewing concepts is a good idea

MERCURY VENUS MARS

Mercury is the closest planet to Venus has a beautiful name, but Despite being red, Mars is a cold
the Sun and is only a bit larger it’s terribly hot, even hotter than place, not hot. The planet is full of
than our Moon Mercury iron oxide dust

JUPITER SATURN NEPTUNE

It’s a gas giant and the fourth- Yes, this is the ringed one. It’s a Neptune is the farthest planet
brightest object in the sky gas giant, composed mostly of in our Solar System and the
hydrogen and helium fourth-largest

36
 VENUS MARS
Venus has a beautiful name and Despite being red, Mars is a
is the second planet from the cold place, not hot. The
Sun. It’s terribly hot planet is full of iron oxide
dust
Sometimes,
reviewing concepts
is a good idea
SATURN NEPTUNE
Yes, this is the ringed one. It’s Neptune is the farthest planet
a gas giant, composed mostly in our Solar System and also
of hydrogen and helium the fourth-largest

37
 Your services

MERCURY VENUS
Mercury is the closest planet to the Sun Venus has a beautiful name and is the
and the smallest one in the Solar System second planet from the Sun. It’s terribly
—it’s only a bit larger than our Moon. hot—even hotter than Mercury—and its
The planet’s name has nothing to do atmosphere is extremely poisonous. It’s
with the liquid metal since it was named the second-brightest natural object in
after the Roman messenger god, the night sky after the Moon
Mercury

38
 More services

MARS JUPITER VENUS

Despite being red, Mars is It’s a gas giant and the Venus has a beautiful
a cold place, not hot. It’s biggest planet in our Solar name and is the second
full of iron oxide dust, System. Jupiter is the planet from the Sun. It’s
which gives the planet its fourth-brightest object in terribly hot—even hotter
reddish cast the sky than Mercury

39
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