A project manager is negotiating a service level agreement (SLA) with a vendor. The vendor is insisting on a price that is 10% over budget. The PM knows the vendor wants to enter this new market segment. What is the BEST negotiation strategy?

Answer options:

Demand the price be lowered or threaten to cancel.

Focus on the vendor's interest in market entry and offer a case study/testimonial in exchange for the lower price.

Split the difference (pay 5% over budget).

Accept the higher price and cut scope elsewhere.

How to approach this question

Look for the 'Win-Win' option that addresses the other party's underlying interests.

Full Answer

B.Focus on the vendor's interest in market entry and offer a case study/testimonial in exchange for the lower price.✓ Correct

Effective negotiation involves identifying shared interests. The vendor wants market entry (marketing value); the PM wants a lower price. Trading these creates value for both sides.

Common mistakes

Thinking negotiation is a zero-sum game (A or C).

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