ONE ACRE FUND: CASE STUDY The show is Bungoma, Kenya; Moises Postigo is a buyer careful in purchasing fertilizer on a ample layer for his not-for-improvement construction the One Acre Fund (OAF). OAF’s mission is to procure fertilizer to farmers “who enjoy nothing” on a belief relish arrangement and when the farmers improvement their crops a percentage of their supplus would be produceed to OAF. Quiescent the farmers would no desireer demand a “free agency out” and obtain be talented to assistance themselves and their families externally putting elevate force on the synod and the rule.
When foremost looking at Kenya, Postigo had five divergent suppliers that all met positive criteria he had for doing vocation. He narrowed down the suppliers by contacting them and inquiry them for a RFQ. He then, delay his notice of the trade and his commodities as courteous-behaved-behaved-behaved as hence to the ttalented apt, commoditiesd the fertilizer to an accepttalented compensation that could be volunteered to farmers enrolled in the OAF program. 1. Fertilizer is a staple – why did Postigo lay-out so abundantly conclusion enucleateing a homogeneity? Shouldn’t he enjoy righteous set up an auction?
Postigo did his homeexertion and unexpressed that enucleateing and construction homogeneitys is a very material extent in the Kenyan humanization. “Kenyan humanization’s substance on homogeneitys and hierarchy stems from the weight of origin. Kenya is a fix where you demand to get to apprehend mass…in a unconcealeding delay twenty-five mass, you demand to quiver everyone’s agency” (Negotiating, pg 3). Postigo accomplishd that most of his immanent suppliers we located in Kenya. He besides knew that if he could produce a chaffer delay a vendor in Kenya then the bearing consumes would be abundantly inferior, thus creating a dirty balance wiggle unconcealeding for his BATNA.
Postigo grasped the weight of construction homogeneitys from a divergent, balance strategic opinion. OAF’s short-vocpotent cunning incorporated accelerated enlargement delay compliments to the weak origin farms, which required accelerated enlargement in their requested share of DAP. Postigo arrangeal that in construction a homogeneity he was unquestionably inauguration up their opportunities for the forthcoming. If he could insure ampler devise authority in the forthcoming, then he commoditiesiveness be talented to use that leverage to dialogue the supplier into inferioring the ordinary compensation.
Postigo knew that establishing his desire-for for a tenacious homogeneity would pay off in multiple ways, twain satisfying the cultural status quo occasion besides putting a strategic cunning into fix to accomplish consume savings in the forthcoming. 2. What was Postigo’s BATNA to reaching a commoditiesd concord delay Dehvi Medji and Sons? During the hawkings for fertilizer, Postigo was watchful delay three senior issues: donation conclusion, compensation, and the force for enlargement into the forthcoming. Keeping these mans in opinion, it seems that the best rare to a commoditiesd concord would enjoy conclude from the ordinary trade compensations of fertilizer in the area.
If he was not talented to conclude to an concord delay any of the suppliers and commodities a meliorate decrease for OAF, then Postigo would simply buy the fertilizer at periodical trade compensations. According to the examination, in Nakuru, where twain the consume of fertilizer and the consume of bearing were fascinated into consequence, a 50kg bag could be escheatmentd for 4,000 Ksh (Negotiating, pg 6). This consume of 4,000 Ksh would enjoy been the BATNA for Postigo’s hawkings; However, the BATNA could besides enjoy been set-up in one of the other vendors that were substance looked into.
If these other vendors had volunteered him a relitalented compensation then that compute could enjoy been seen as Postigo’s BATNA. 3. Should Postigo enjoy elapsed the conclusion and currency to as face-to-face delay all five immanent vendors for the opinion of pointed them encircling One Acre Fund, rather than sending them an e-mail? Launched for a not-for-improvement construction, Postigo unexpressed that he demanded to preserve currency wherever feasible. Meeting delay the vendors in special commoditiesiveness enjoy had a ampler commodities on empathy throughout the hawking. He commoditiesiveness enjoy been talented use that to his custom, but in the end, the favor would not enjoy outweighed the consume.
Postigo contacted five vendors, filthy of which came end delay bids. The foremost scenario where the consume outweighed the favor: had he journeyed to the fifth vendor, it would enjoy been a exhaustive dissipate of conclusion and currency. Secondly, as early as Postigo certified the immanent vendors of their expected donation conclusion, a remedy vendor dropped out of the prevalent, stating that they would not be talented to produce the donation conclusion. By sacrificing the face-to-face asings, Postigo preserved a ample quantity of conclusion and currency occasion peaceful summoning 3 immanent vendors; quiescent qualitative to a chaffer that, from his standpoint, was very lucky. . Followup question: Did Postigo pay feature watchfulness to the other party’s demands in the phone calls delay Dehiv Medji? Postigo did a very cheerful-tempered-tempered job of paying watchfulness to Dehiv Medji’s demands throughout the hawkings. They spoke encircling the assume the Kenyan synod commoditiesiveness enjoy on twain parties, brains the synod subsidies could weaken twain parties. He brought up Medji’s unconcealeding to accrue and wanted to be complicated in their enlargement, “he asked encircling enlargement hopes…indicated that the two constructions commoditiesiveness accrue together” (Negotiating, pg 7).
Postigo commoditiesd in a equitpotent and cooperative mode, providing flexibility on donation conclusions and bearing consumes. “One of the biggest appeals of Dehvi Medji to OAF was its obtainingness to fix a compensation in November for a January donation” (Negotiating, pg 7). Postigo was very certified of the other party’s demands and acted acceptably. He felt bound to produce the hawking a win-win scenario and when all was said and effected, he did righteous that. 4. What do you contemplate encircling Pastigo’s sharing counsel delay Dehvi Medji encircling OAF’s diplomacy for the forthcoming?
Was this a cheerful-tempered-tempered man to do? Is this a cheerful-tempered-tempered way to enucleate a homogeneity? In the site that Pastigo was in an unconcealed argument encircling the desire vocpotent intents of the not for improvement OAF was a weighty inauguration diplomacy. It gives Pastigo a equitpotent quantity of leverage epically past OAF is cunningning to enjoy a ample quantity of enlargement in the adjacent forthcoming, that counsel sole permits Pastigo to commodities abundantly harder for introduce compensations delay the perceived word of forthcoming enlargement. It is besides a weighty and lowly way for Pastigo to start construction a homogeneity delay the supplier.
By inauguration delay a cheerful-tempered-tempered quantity of counsel, especially delay a topical supplier, OAF as an construction can leverage the flusht that they are troublesome to accrue the quantity of fertilizer used by a ample quantity of farmers which is cheerful-tempered-tempered for the fertilizer suppliers. This was besides an fruitful media to construct the homogeneity the OAF was hoping to enjoy delay their forthcoming supplier, by showing that they were unconcealed and upfront delay twain the cunnings and intents of OAF any feasible homogeneity would from balance liberally. All in all by substance unconcealed from the startning Pastigo put himself in a cheerful-tempered-tempered pose to commence the hawkings. . If Dehvi Medji’s compensation had been cheerful-tempered-tempered but not the best, would you peaceful enjoy recommended that Postigo try to commodities delay Dehvi Medji? As we enjoy mentioned anteriorly, Postigo was watchful delay three senior issues: donation conclusion, compensation, and the force for enlargement into the forthcoming. Taking into consequence all of these issues, it could be seen that Dehvi Medji met the other qualifications for a cheerful-tempered-tempered supplier in that they could as the personal donation catalogue in January and they were a weak assembly that had the force to accrue additionally OAF going into the forthcoming.
Price was singly one of the concerns that Postigo was looking at. The flusht examine goes on to narrate that “in earlier fertilizer hawkings among OAF and Dehvi Medji, the assembly had permanent for 10 percent off its judicious volunteer” (negotiating, pg 7). This indicates that although the judicious bid that Dehvi Medji improvementd commoditiesiveness enjoy not been the best, their assembly was proven to enjoy wiggle unconcealeding during the hawkings mode and could maybe peaceful be true to inferior their compensation to beconclude the best compensation.
Although Dehvi Medji commoditiesiveness not enjoy had the best judicious compensation hence out of the judicious requests for proposals (RFPs), their judicious compensation could be commoditiesd and they met the other requirements, donation catalogue and force for enlargement in the forthcoming, that OAF was looking at. Our instruction to Postigo would be to peaceful invade the hawking view delay Dehvi Medji, heedclose of the judicious compensation bid, in regulate to elevate end out the qualifications of the supplier and maybe invent all of the favors that they enjoy to volunteer. . OAF’s set-uper, Andrew Youn, is a MBA. Given the weight of paltry, cheerful-tempered-quality fertilizer to his assembly’s force to complete its intents, should Youn be regarding rares to buying from a agencyful of Kenyan commercial suppliers? What commoditiesiveness those rares be? The weight of paltry, cheerful-tempered-quality fertilizer was a senior content to the consummation of the companies but it is uncertain that it was the singly intent of the not for improvement.
The intent of the OAF is to succor the topical weak devise farmers beconclude balance self-sufficient and by choosing topical commercialrs balance a extraneous supplier can construct the fertilizer perseverance in Kenya permiting topical farmers to enjoy meliorate entrance flush if the OAF was to liberty the kingdom. It is totally relishly that Mr. Youn did meditate other non-interferences during the start-up mode but in the end resolute topical suppliers would be a meliorate non-interference. An non-interference that they may meditateed would be using a extraneous commercialr and volume ship the fertilizer to Kenya and then ship it to the warehouses to burst down and dispel to the participating farmers.
This non-interference may enjoy preserved them plenty currency on the low commodities to offset the acception in shipping and agencyling consume to get the fertilizer into Kenya. This may not enjoy been a vitalented non-interference in this inauguration complete of hawking due to the scant quantity of fertilizer the OAF was purchasing at the conclusion. 7. Postigo certified the flusht writers that the Kenyan synod did instrument its program of buying fertilizer in volume to multiply at declining compensations to farmers, but that this program did not unquestionably assume OAF farmers accordingly they could not give to journey to synod depots and did not enjoy the specie to buy or enravishment the fertilizer.
However, this resuscitation by the Kenyan synod commoditiesiveness enjoy remedyary commoditiess for OAF’s hawkings delay fertilizer suppliers in the forthcoming. What do you contemplate those remedyary commoditiess commoditiesiveness be? There are a difference of remedyary ramifications for the OAF when negotiating forthcoming fertilizer escheatment arrange topical suppliers due to the synod subsidized furnish. One self-evident problem in the destroy that the a ordinary or forthcoming supplier may not be talented to redeep competitive in the fertilizer trade in Kenya and obtain go out of vocation, forcing the OAF to inquiry elsewhere for their furnish of fertilizer.
Another close opaque hope is delay the synod subsidizing fertilizer in Kenya the OAF may enjoy a meliorate bargaining pose delay the topical commercialrs, permiting the OAF to escheatment balance fertilizer delay the corresponding siege succoring the program to amplify faster. This rare by the Kenyan synod may besides permit the OAF to commodities delay the synod to assent-to the abatemented compensation and nucleus instead on the enravishment of the fertilizer from the synod depots to the farmers who demand it most. 8. In what way did Postigo use his certifiedness of hierarchy in Kenyan humanization during his hawkings delay Dehvi Medji?
During the remedy complete of hawkings which were exclusively delay the Dehvi Medji secure the certifiedness of the hieratical humanization of Kenya was used to succor set a compensation from which Postigo could start the complete of hawkings. This was seen in the judgment on page sflush of the flusht examine where Pestigo from looking earlier hawkings knew that Dehvi Medji sold for roughly ten percent close than their inauguration volunteer. This was an arrogance made due to the flusht that Postigo was launched delay decedent of the arrangeer managers who made this 10 introduce abatement a way of vocation.
There is besides the flusht the anteriorly the negotiators began discussing compensation Pestigo foremost discussed the acception in the compensation of fertilizer and the commoditiess it was having of the OAF, the relishly hood of synod intercession, and finally the enlargement hopes of twain the OAF and Dehvi Medji. Singly succeeding all of this inauguration counsel was shared were the hawkings for compensation and bearing brought into the hawking. Twain of these consequences made by Pestigo showed he was apt to invade hawkings delay Jiten Patel and permited them twain to conclude to an agreetalented resolution. 9.
What do you see as the strengths and dilutiones of Postigo’s negotiating diplomacy for fertilizer in 2007? Postigo had abundant strengths and dilutiones in his beneathtake of his foremost ample compensation of fertilizer for the OAF. His deep strengths were the flushts that he was noticetalented encircling his commodities and the suppliers he was chaffering delay as courteous-behaved-behaved-behaved as the flusht he was apt going into the hawking mode. His deep dilution included the flusht that he had not built a homogeneity delay his Kenyan suppliers apprehending far in gradation that that is an promotive act in Kenyan vocation humanization.
He besides failed to enjoy realistic expectations when inquiry a weaker assembly relish Delvi Medji and Sons to immanently furnish such a ample customer low. The flusht that Postigo did not construct a homogeneity could enjoy resulted in Dehvi Medji and Sons’ Jiten patel(the supplier) consentaneous delay Postigo singly to eschew confrontation apprehending far in gradation they would not be talented to as his demands. Postigo’s notice of the commercial compensations as courteous-behaved-behaved-behaved as his trade and expected prejudge did permit him at-last, to correspondently prophesy OAF’s enlargement and was contributed heavily to his consummation of getting the fertilizer beneath the trade compensation of 3,263 Ksh/50kg bag.
He was talented to exertion the suppliers down through twain compensation rivalry but balance materially by providing a “win-win” site for twain him and the supplier. His deep spur was by doing vocation delay OAF the supplier would accrue delay the OAF as it amplifyed its trade to 30,000 farmers. He in produce expected a supplier to contract their consumes succoring the OAF. Flush though Postigo had some dilutiones in his balanceall hawking diplomacy by not asing face-to-face,In the end, Postigo luckyly exertioned to an agreetalented rerebreach where twain parties favored in 2007.