Essays on Negotiation Step by Step at Microsoft Case Study

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The paper 'Negotiation Step by Step at Microsoft " is a good example of a management case study. Microsoft outperformed Netscape browser in the competition for marketing AOL’ s products back in 1996. Microsoft’ s success at the negotiation table emanated from its effective implementation of negotiation strategies. The war between the two corporations was a case of competitive negotiation. At the onset of the negotiation process, Microsoft understood that Netscape held a comparatively better competitive position in browser marketing since it had a strong technical superiority; an advantage that Microsoft did not have.

At the time of the competition, Microsoft had just entered the browser market. During the negotiations, Bill Gates maintained a focus on Microsoft’ s need to expand its market share and presence in the browser market. As a result, winning the bid would impact positively on the objective. The essay reveals how Microsoft underwent all the seven stages of negotiation to outperform Netscape in the negotiation. The Beginning The Preparation and Setting of Goals Having a plan is a prerequisite requirement for setting any goal. Consequently, Microsoft began the negotiation process by having a plan and setting a goal for the negotiation.

Microsoft’ s goal was to increase its market share and presence in the browser market. Bill Gates understood that AOL would consider its bid as the best alternative to a negotiated agreement (BATNA) if it concentrated on the marketing features that it could offer to AOL. As opposed to Netscape that waited for AOL’ s positive response to its proposal, Microsoft endeavored to concentrate on its strength in business marketing instead of competing on technology grounds since it was aware that it could not outperform Netscape on such grounds.

Microsoft’ s decision to use the creative strategy emanated from its goal to change the weak BATNA or BA position while weakening Netscape’ s position on the bid. Initial Interaction Being the second stage in the negotiation process, Microsoft launched the initial interaction with AOL to place its competitive marketing offers on the table. Microsoft understood that the initial interaction would provide a room for exchanging pertinent information regarding the offers that it would grant to AOL in the event that the company accepted its offer.

As an initial step, the company commenced the negotiations with David Colburn, AOL’ s chief negotiator that also served the position of the Business Development Head. The necessity of engaging in the initial interaction arose from the mere fact that this was a competitive negotiation process between Microsoft and Netscape. As a result, it was mandatory for Microsoft to create rapport and trust and interchange significant information about the product offerings that it was willing to offer to Netscape in the event that it wins the bid. Exchange and Refining Information The effective utilization of the exchange and refining of information stage was evident when Microsoft specified the actual product offerings that it would offer to AOL in the event that the latter firm offered it the tender to market its products.

Microsoft assured AOL that it would bundle its products into the Windows Operating System, thereby enabling its fast marketing to the intended customers. Microsoft understood that Netscape would not match the marketing capability even if it was a giant in the browser market. At the same time, Bill Gates and his marketers believed that the offer would guarantee a competitive bargaining position for the company since Netscape could not bundle its offering into any operating system.

The exchange and refining of information by Microsoft was a critical aspect of the negotiation process as evidenced by David Colburn’ s statement. According to the negotiator, the decision of Microsoft to bundle its offering into the Windows OS gave it a competitive position over its competitor, Netscape. On the other hand, Netscape did not endeavor to undergo this stage of the negotiation process thereby compelling AOL to consider giving Microsoft the tender.


The Negotiation Experts. (2016). Microsoft Finessed Netscape in the Browser War. Retrieved from:
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