Planning For Viking Investments Essay

589 WordsSep 27, 20093 Pages
PLANNING DOCUMENT FOR VIKING INVESTMENTS Role: SANDY WOOD, WoodCrafters, Inc. What issue is the most important to you? (List in order of importance) 1. To persuade Pat Olafson, the owner of Viking Investments, to pay entire outstanding invoice in cash within 15 days. Alternatively, aim for invoice payment of $700,000 in 15 days, the rest in 30 days 2. To persuade Pat not to recall the $200,000 loan 3. To persuade Pat to absorb the Oak wood cost amount $250,000, paid in 30 days ($950,000 in total) 4. To persuade Pat to lower the monthly rental payment to $4,000 What is your BATNA? Reservation Price? Target? BATNA = $425,000 from immediate sale of house (net proceed) Reservation Price = $910,000 paid by Viking on invoice at which $700,000 is paid within 15 days and the rest is paid within 30 days. In addition, Pat is not call bank the loan. Target = Entire $950,000 paid by Viking on invoice in 15 days. If not possible, we will aim for collection of $950,000 at which $700,000 is paid within 15 days and the rest is paid within 30 days. In addition, no immediate loan calls back. What is your source of power? 1. In order to force Pat to absorb the cost overruns, we will try to explain that the decision was made by Fawn, Pat’s secretary. Since Pat give full authority to her, according to Pat’s own words “Fawn can handle any details that come up”, he should responsible to his underling’s act. At the time of decision making, Pat made himself unreachable and this meant to fall on Fawn’s decision. 2. In forcing WoodCrafters to make a payment, it implies that Pat’s might be in financial trouble. If there is no deal for the abovementioned, then we have to declare bankruptcy. The proceeds of house selling will be divided in proportion which will impact Pat’s receivables that will not be paid in full.

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