The Negotiation Book: Your Definitive Guide To Successful Negotiating

3.2. HOW DOES POWER INFLUENCE NEGOTIATIONS?

3.2.1. Influencing factors

Those factors which have the greatest influence on where negotiations take place on the clock face are made up of the following:

1. The level of dependency.

2. The power of the brand and the relative size of both parties.

3. History/precedents.

4. Competitor activity and changing market conditions.

5. The party with more time.

6. The nature of the product, service or contract.

7. Personal relationships.

3.2.1.1. 1. The level of dependency

Who needs who the most, or the level of dependency between both parties, directly influences the balance of power between you and those you negotiate with. In economic terms it's referred to as supply and demand.

• If there is an abundance of supply and little demand, the buyers, assuming they have a need, will have more power available to them.

• If the product or service is in short supply yet demand is high, the seller will more likely have greater power.

In the commodity markets this basic economic principle is used to help determine prices on a whole range of products from diamonds to motor cars, oil, and even bananas — and ultimately that of the share prices of companies. Supply and demand, and sometimes scarcity, effectively set the parameters within which negotiations take place. They directly influence the options available to both parties and the level of dependency which exists.

Generally speaking, those with power will not only employ it but will usually find ways to exploit it. Creating power ...