Texoil Negotiation
Essay by Jaspreet Kaur • May 10, 2016 • Case Study • 777 Words (4 Pages) • 4,098 Views
Jaspreet Kaur
Prof. Murphy
MGT 4480
Texoil
Role
Station Owner
Interests
I need to complete this sale promptly to fulfill my life dream, which is to sail around the world.
My wife and I were planning to take a two-year trip and need the money to buy a sailing boat and cover our costs. Cash flow is needed to meet my interest or find alternatives.
As instructed by the doctor, my spouse cannot work for 18 hours * 6 days shift in the future.
My competitors are now open for 24 hours a day which is making the business difficult and less appealing to me.
I cannot do that without hiring more help, whom I won’t be able to supervise properly.
Safety of workers at night is a concern.
A mini mart would give me a jump on my competition, but I have neither the capital nor the motivation to make such an addition.
I don’t want to lose my equity, once I return from the trip. The equity in the boat is the equity I had in my condo and the station; if I sell the boat for living expenses, I will lose that equity.
I need to sell the station to somebody who has enough experience in oil industry.
Texoil’s Interests
Texoil can buy the station at a good price which is lower than the cost of building a new one.
The station already has a good customer base.
Texoil has only two other competitors in the area.
To increase the revenue, various opportunities are available such as making it 24 hours * 7 days which will surpass the annual income of $75,000 very easily, having a mini-mart and the night shift from the port is an untapped source of customers.
They also think that sales could be increased with a more aggressive marketing approach.
BATNA
The best offer I have received so far is $400,000 from British Petroleum.
I may/may not think about FINA, but after the last meeting they have not contacted me again, nor have they made any offer.
Reservation Point
$553,000 ($553,000 - $64,950 = $488,050 after taxes)
Boat loan: $230,000
Boat ready: $68,000
Food, health, clothing: $75,000
Boat maintenance : $40,000
Savings after return: $75,000
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