BATNA

BATNA

BATNA Jonathan Poland

BATNA, or best alternative to a negotiated agreement, is the course of action that a party in a negotiation would take if they are unable to reach an agreement with the other parties. Estimating BATNA is important in negotiations because it helps parties determine how hard they can push for their desired outcome. For example, if a party has a strong BATNA and their negotiation counterpart has a weak BATNA, they may be able to push harder for their desired outcome. Gathering information and developing an accurate estimate of one’s own BATNA and that of the other parties is often a key focus of negotiations. The following are illustrative examples.

Customer Needs

A salesperson knows that a customer needs their product to solve a problem and that there are no feasible alternatives on the market. As such, the customer’s BATNA is to live with the problem. In this situation the salesperson may offer a small discount but not be pushed any further as they have a strong position.

Sales Targets

A customer can sense that a salesperson hasn’t hit their sales target and it is almost the end of the financial year. As such, the salesperson’s most likely BATNA is to miss their sales quota. As such, the customer is confident to push for heavy discounts and is willing to close the deal quickly so that the salesperson can achieve their sales target.

Customer Preferences

A salesperson gets the sense that a customer strongly prefers their product to alternatives in the market. The customer’s BATNA is purchasing their second preference. The salesperson is therefore confident that a minor discount will be enough to close the deal.

Talent

An employer is aware that a particular candidate is in high demand and likely has other offers to consider. The employer is also aware that the candidate’s knowledge is critical to their strategy. Therefore, the candidate has many good alternatives to a deal and the employer will risk strategy failure if a deal isn’t reached. In this situation it is in the candidate’s interests to push hard and the Employer’s interests to be accommodating.

Economy

An employer is aware that the economy is in recession and jobs are difficult to find. As such, they have a strong hand in negotiation as candidates may have no other offers.

Supply

A manufacturer of high capacity batteries is in short supply due to industry conditions and extremely high demand. Each customer they meet is highly motivated to close a deal as their alternative is to cut back production of their products. The manufacture has many alternatives with each negotiation as customers are eager to buy. As such, they push each customer to offer the highest price that is possible given the economics of their production.

Bluffing

A business customer who is purchasing software has decided that a particular product is far superior to all alternatives. In other words, their BATNA is to buy an inferior product and they are therefore highly motivated to buy. However, they attempt to bluff and downplay their motivation with a bogey.

Learn More
Project Management Skills Jonathan Poland

Project Management Skills

Project management skills are a combination of talents, knowledge, and experience that enable an individual to effectively plan and execute…

What is the Snob Effect? Jonathan Poland

What is the Snob Effect?

The snob effect refers to the phenomenon of a brand losing its prestige and exclusivity as it becomes more widely…

Cross Sellilng Jonathan Poland

Cross Sellilng

Cross-selling is the practice of selling additional products or services to existing customers. In a single transaction, this might involve…

Direct Marketing Jonathan Poland

Direct Marketing

Direct marketing is a type of marketing that involves communicating directly with potential customers in order to generate a response…

Customer Expectations Jonathan Poland

Customer Expectations

Customer expectations refer to the base assumptions that customers make about a brand, its products and services, and the overall…

Technology Ethics Jonathan Poland

Technology Ethics

Technology ethics refers to the principles that guide the development, use, and management of technology, taking into account factors such…

Media Analysis Jonathan Poland

Media Analysis

Media analysis is the study of the structure, content, and methods of communication in various forms of media. This involves…

Influence Jonathan Poland

Influence

Influence is the ability to have an impact on the thoughts, behaviors, and values of an individual. It can involve…

Market Potential Jonathan Poland

Market Potential

Market potential is the entire size of the market for a product at a specific time. It represents the upper limits of the market for a product. Market potential is usually measured either by sales value or sales volume.

Search →

Key Bridge

People. Profit. Progress.

Business is the lifeblood of progress and you are the driving force regardless of where you fit in the value chain. People drive profit by bringing useful products and services to market. Profit drives progress by allowing the best ideas to emerge and the best investments to win.

This is the cycle of capital that moves the world forward and that’s why I started Key Bridge, a private membership for the pursuit of profit and progress; a platform for building better assets, tackling global challenges, and advancing the greater good.

Key Bridge

People. Profit. Progress.

Business is the lifeblood of progress and you are the driving force regardless of where you fit in the value chain. People drive profit by bringing useful products and services to market. Profit drives progress by allowing the best ideas to emerge and the best investments to win.

This is the cycle of capital that moves the world forward and that’s why I started Key Bridge, a private membership for the pursuit of profit and progress; a platform for building better assets, tackling global challenges, and advancing the greater good.