Register now or log in to join your professional community.
Not very healthy terms to start with ... honestly i would never want to give someone that much power of direction... eventually i would have to become his slave why... heres why
1. Once i sack the competitor, i would upset a genuine buyer and then be stuck with only one major buyer whose reason to buy is not quality ...
2. once the competitor is out of the picture50% negotiating power would turn into100%
3. I would want someone to buy the production for quality .... not to become the KING of all
However if i under tremendous pressure to close a big ticket and my entire career would depend on it ... then id have to be in that situation to be honest
idont agree its promoting
I agree with Mehdi, if the only reason behind signing that contract is to kill his competitor then I don't think I am going to go with it, otherwise he will be setting the rules for this whole year. And on the other hand I will lose market share the coming year when the contract is over, because I was not loyal to the market and did not play fair.
Also nothing stays a secret in business, eventually competitors will know what happened and i will remain the only loser then, and it will take some time to recover from that!
But again, it is only the slightest chances that my company's business is really not doing well and we had no other option, then we have to take it!
That's a tight corner. For only a year, dropping the buyer's competitor is not healthy. I agree with Mehdi Raza as well. I'd keep a counter offer, I'll ask the buyer to buy at the market rate for the next5 years and can drop the competitor, if the buyer is still not interested I'd end terms by saying that you just got your competitor a very big discount this year. Since you know the competitor, you can also discuss terms with the competitor before taking the final call. I guess you have multiple trumps in your hand.
I think this way it is promoting a monopoly because if we drop a competitor we are giving unfair advantage where customer is not having any knowledge on other product , its features , quality and many other aspects , but most important point here would be is it ethical to such malpractices because you have done it . In future it could be repeated again with you next time where competitor will get all orders and you would be dropped
So i think dont encourage such unethical procedures
No! Never!
Do it right or don't do it at all
This is a very bad and this is a greedy, corrupt business man, full of monopolism and does not have a vision of growing the economy. Why?
1. He would like to be a monopoly buyer, and is afraid of competion. He should just negotiate his quantity without looking into the manufacture's production. Its the duty of the manufacturer to scan the environment and produce to satisfy demand.
2.He want to overcharge the general public due to monopolism.
3. He want to weaken entreprenuership, creativity and innovation that might be as a result of this production. If this monopoly buyer is satisfied by the product, that will mean manufacturer's research and development will be idle since the company serve only one satisfied monopoly buyer. In addition his company's creativeness will be affected as they will be also the sole supplier of the end product.
4.He should instead be not at all being given such preferrantial treatment, he will cripple your company. He has a corrupt mind, and is greedy.
If you want high sales at the expense of maintaining sound business principles then you can go for it.Code of Business Principles(COBP) calls for a company's upholding sound and fair business ethics with or without someone observing you
In negotiating a major business deal, the customer says i will sign if you drop my competitor and will buy all production this year, will you agree?
Dear Amer
This is an interesting and a tempting offer. However, it is said that one is not being wise when one “puts all the eggs in a single basket” In business, it is unwise to have a single customer however large the account may be! A company which does not spread its customer base, it is actually inviting a disaster.
The customer who is asking you to drop his competitor is being unethical and is not practicing fair business. This customer who is wooing you now with all of his custom, may actually shift and go with another company as and when a better options becomes available. He will desert you to save that extra cent the moment he sees an opportunity outside and shall not play the role of a partner in business.
It is essential that, companies in their quest to achieve sustainable growth, are required to have customers who shall remain loyal and continue to do business. If one considers a “life time opportunity” of a customer, having customers that just are one time customers or a customers for a short period only, a business may not survive. It is important to have loyal paying customers. Thus having a single customer is a disadvantage.
If this request of this customer is looked at from another angle, it is possible that he is actually testing you to see if you would jump at such an opportunity. If you were to agree to his clause of dropping his competitor, then he knows that you would do the same thing to him at the behest of another customer.!
Fair business practice will build company reputation leading to enhanced brand value and consequently resulting in increased market share and business growth and profits. Even employees (existing as well as prospective) will look up to such companies and employee loyalty and retention improves.
To conclude I emphasize that you must reject this customer’s request to drop his competitor.
good luck.
Mehdi Raza right
