Myti Pet V. Rawmat

  Myti-Pet v. Rawmat

                                        Role: Myti-Pet

1. In what areas do you think Myti-Pet and Rawmat are likely to be in conflict in this negotiation?

The following are likely to be in conflict betweent the two parties:

• Refusal by Myti-Pet to pay for the most recent invoice: Meat flour delivered did not meet the specification and this has resulted to additional cost in order to adjust the manufacturing process, and these adjustments slow production and increase wastage for Myti – Pet.
• A fair refund from Rawmat of $200,000 for the additional cost incurred for the high volatility in fat for the last 4 deliveries
• Threat by Myti - Pet to publish Rwamat breach and act of bad faith in the Wheat Weekly
• Rawmat’s refusal to make future supplies to Mytip-Pet
• Threat for potential lawsuit by Rawmat: They have threatened to sue Myti – Pet for violation of the contract
• Threat for counter suit by Myti – Pet.

1. In what areas do you think Myti-Pet and Rawmat are likely to have overlapping interests?

The areas in which Myti – Pet and Rawmat are likely to have overlapping interest will be:

• The continuation of supply of meat flour with renewed contract and guarantying quality supply
• Drop all threat of lawsuits and publication of quality issue by Rawmat in the Wheat weekly magazine

1. What options can you come up with that will create or build value for you? For both sides?

The options I can come with will include the following

• I may offer to pay less of the current amount owed to Rawmat. Rawmat will save on lawyers’ fees and maintain company’s image
• I will get Rawmat to accept responsibility for selling products that is outside of specification and forgive the $250,000 amount for last payment.
• Renew the contract of supply with Rawmat, in order to meet up with upcoming demands from both the Mexican and European company, also enabling Rawmat to expand its business in the area of wheat flour.
• Contract should contain the acceptable specifications of products to supply,
• Change in the delivery schedule (2 smaller trucks per day) to help reduce lose.

4.  If you don’t come to an agreement, what will you do?  How attractive is this option to you?

The options that will be available to me if I do not come to an agreement with Rawmat will be:

• Counter Suit Rawmat for going contrary to the contract

• Take the risk of having Dion & Carrey as both my supplier of wheat and beef flour. This is not attractive to us as they do not have significant experience in the meat flour business and they border crossing issue making deliveries late.

1. If you don’t come to an agreement, what will the other side do?  How attractive do you think that option is to them?

• The option will be for Rawmat sue us (Myti – Pet) for the outstanding balance: This option will not be attractive to them, in sense that they will lose Myti – pet as a major customer and will lose the opportunity to expand in supply as Myti – Pet has plans in expanding to Europe and has already sign a contract with a leading retail company in Mexico.
• They will also spend money on lawyers’ fees, if they decide to go to court.

6.  What information do you need to gather during the negotiation?[pic 1]

...