Life is a series of negotiations because we go through a series of natural and spontaneous changes of which success is not always an outcome.  An average adult makes about 35,000 conscious decisions each day. Each decision, of course, carries certain consequences with it that are both good and bad. We encounter several negotiation situations each day, each moment/each hour. Yet, most people misunderstand a negotiator as someone who can manipulate people into getting what he wants. 

What we don’t realize is that almost every conversation we have, each day, is some kind of negotiation. We all use our strength to tackle all kinds of situations, we go through ‘highs and lows.’ We go through moments when we feel a sense of loss, confusion and self-doubt. In times like these it is only our determination that comes to our rescue and helps us to stand tall and save our self-worth.

Negotiation is a dialogue between two or more parties to resolve points of difference, gain an advantage for an individual or group of people for positive outcomes to satisfy various interests. The parties aspire to agree on matters. Whenever there is a want, desire or a need present on either side, we are in a negotiation. And we every day have wants, desires and  needs. The thing that trip up people is they knowingly or unknowingly get into action of negotiation as bargaining. For example, buying vegetables, fruits, milk, eggs, bread, what to cook for meal, getting the house cleaned from maids, getting the garden watered, which mattresses to use on bed, when to change curtains of windows, whether to attend a function or not, planning a holiday, planning a function ….so many negotiations we conclude before making decisions.   

There are bigger negotiations we go for such as: buying a car, negotiating a salary, buying a home, renegotiating rent, choosing a life partner, investment decisions, health related decisions etc. As we mature in life, we take emotional intelligence and intuition to the next level, before negotiating.  Emotional intelligence is critical for mastering negotiation skill. Emotional Intelligence is the ability to manage both your own emotions and understand the emotions of people around you.

We learn to negotiate better when we go with an open mind, we think and plan, when we articulate our thoughts, we succeed. Perseverance is most important requirement while negotiating. When we detach ourselves from the result negotiation works out better. Also, any negotiation is not one sided, we should think about other side too. A very important point is at times we get confused with want exactly we want. knowledge of the subject matter being negotiated, ability to think clearly and rapidly under pressure and uncertainty also matters. Most important skill in negotiation is listening skill.

In business negotiations most negotiations are sharp but need to be dealt with calm and composed mind, carrying the figures in head, quantifying every trade-off is fundamental to the deal. Or that’s what the science of game theory says. In real life however, people are not always rational under pressure, when time is short, and the stakes are high. In business, the biggest challenge in a negotiation is to stop emotions from overtaking logic.

Warren Buffett is one of the world’s most successful investors and has built an impressive, estimated wealth of $85.3 billion. He has also earned a strong reputation as one of the world’s most skilled negotiators. Buffet is known for doing his research and preparing for negotiations with meticulous detail. His ability to identify value, negotiate favourable terms, and build strong relationships has been key to his incredible success in the business world. He keeps his ego out of the door. He is ruthlessly unemotional while negotiating.

Indira Nooyi, CEO of PepsiCo is known for her flexibility during negotiations. She always was open to alternative solutions and willing to adjust her stance based on new information or changing circumstances. This adaptability allowed her to navigate complex deals successfully and overcome unexpected challenges.

Nooyi believed in thorough preparation before entering any negotiation. Whether it was a merger deal or a supplier contract, she ensured that she and her team were well-informed about the industry landscape, the counterpart’s interests, and potential areas of compromise. She always built strong relationships with stakeholders.  She looked at alternative solutions willingness to adjust her decisions based on new information or changing circumstances. Also, her communication skills made her a popular leader.

When we look at negotiation, it’s basically discovering what the other side wants, we must try to uncover their reasoning and motives. Nelson Mandela is remembered for being one of the most talented negotiators in history. He served as the first president of South Africa from 1994 to 1999 and used his strong negotiation skills to fight apartheid and secure a more peaceful society for millions of South African people. Mandela is well known for his resilience, patience, and strategic thinking. It took him decades to achieve his goals, and his focus on the greater good played a crucial role in ensuring a peaceful transition to democracy.

When we don’t recognize a negotiation as a negotiation, it’s much harder to be successful in it. In both personal and professional realms, the ability to negotiate effectively is an art and science. Science as a metaphor for negotiation emphasizes the strategic, analytical, and data-driven aspects of negotiation. It highlights the importance of preparation, research, and understanding the underlying dynamics of negotiation that can make the difference between success and failed opportunities.

SWOT analysis is a strategic planning tool which is used in helping an organization to identify Strengths, Weaknesses, Opportunities, and Threats related to competition and in strategic planning. SWOT helps in situational assessment or situational analysis.

Like the 4 Ps of marketing (Product, Price, Place and Promotion) there are 5 Cs of marketing.   The 5 C’s stand for Company, Collaborators, Customers, Competitors, and Climate. These five elements help in performing situational analysis which is strategic process that helps in identifying opportunities and threats both internal and external to an organization. The 5 Cs also help product positioning which helps in reaching the target segment. 

Company

Strengths and weaknesses are internal factors. They are the areas on which organizations have some control over; they can be changed or modified little easily as they are internal. For examples weaker employees can be trained, can be mentored, if organization has patents and intellectual properties it enjoys an upper hand over competitors.  Location advantage is big strength of an organization.  However, opportunities and threats are external in nature. Companies can take advantage of opportunities and protect against threats, but they can’t change them. Examples include competitors’ pricing, prices of raw materials which depend largely on supplier cartel, and buyer behaviour trends.

Before analysing external factors, organizations need to look at internal factors. They need to look at areas in which they enjoy competitive edge over their competitors. If an organization maintains innovative company culture for example Apple whose success largely comes from their approach to innovation. The company continuously improve their existing products which eventually leads to ‘Creative Destruction’. The iPhone which is Apple’s most successful product came from mixing their existing products the iPod and iTunes and combining them with a phone and camera which resulted in a product unlike any other at the time. Apple’s iPhone created huge market disruption. Apple enjoys unique product knowledge, excellent efficiency and productivity among employees and it is too good in giving customer service that creates fantastic sales and happy customers.

Customer

Happy customers build the company brand. Positive brand reputation leads to higher growth. Reputation goes a long way in a business. It attracts customers, investors, partnerships, and employees. While seeking to improve reputation organizations must start with excellent customer service. Keeping current customers happy results in more stable revenue and more accurate predictions. Exceptional customer service is the unconditional commitment to giving the highest level of product or service to every person, regardless of the circumstances.

Today’s digital age is compelling organizations to relook at their customer-centricity promises. Companies struggle to get customer insights from other industries to match their offering. Organizations cannot rely on benchmarking from the industry they exist. For example, HDFC Bank mobile banking app was compared with the Ola app in terms of simplicity. Consumers are now accustomed to best-in-class user experiences both online and offline. A customer-centric organisational culture is no longer just a good thing rather it is a necessity for survival.

With Taj hotels is the best known for its customer service. Customer delight is present in every interaction with guests. The staff whether in housekeeping, at the restaurants, or room service all are very kind and at the service of their customers. Taj employees go out of their way to give the best hotel stay experience to their customers. So, rather than a customer service process, the customer service culture shines through.

Climate

The climate in the 5 Cs of marketing approach stands for external factors opportunities and threats of SWOT. It refers to the attitude of government and lending institutions towards business activity. It also includes the tax rate, inflation and attitude of labour unions towards the employers. Favourable business climates lower risks, reduce costs and connect companies to customers and quality workers. There is no one-size-fits-all approach to business climate change. Each company’s approach depends on its particular business model. Energy, Commodity, Financial, Technology sectors are most volatile industries.

Since past 2 years, sports utility vehicles (SUV) sector is performing well. India’s major automobile manufacturing companies includes Tata Motors, Ashok Leyland, Mahindra & Mahindra, Force Motors, Maruti, Toyota, Hyundai, Kia etc. The craze for SUVs is increasing day by day. At present that waiting periods for some of the most popular models are stretching to over two years, and fresh orders are still flowing in. Car buyers are now willing to spend more on their personal mode of travel and are preferring top-end cars. The SUV segment is enjoying a healthy business climate in India. The SUV segment’s contribution, which was around 19 per cent of the industry, has now gone up to 40 per cent in 2021-22.

Collaborators

In today’s business world, companies are usually deeply tangled, providing each other with services that are vital for day-to-day operations. Collaboration is when a group of people come together and contribute their expertise for the benefit of a shared objective, project, or mission. For example, if an organization needs to control its marketing efforts, it needs to map out entire supply chain, listing all of the third-party distributors, suppliers, partners and contractors. The reason collaborators must be a part of the 5 C analysis is that collaborations create synergy.

Last year Sabyasachi the famous women designer Indian clothing collaborated with H&M global brand. For Sabyasachi Mukherjee also it is a first with a high-street retailer. He has collaborated successfully before with French Shoe Designer Christian Louboutin and New York-based luxury department store, Bergdorf Goodman. Sabyasachi has dedicated a lot of attention to online interactions with consumers and is aware that online interaction with consumers can increase the position of the brand in the market. #SabyasachiSaree is a trend that never goes out of fashion in India. This, he has used to an advantage. It is for the first time that H&M have had a saree in their collection. Being the second largest clothing retailer in the world, it is present in 74 countries with over 5,000 stores under the various company brands, and the saree has never before featured as fast fashion. Imagine, if the trend takes off, this would be what saree enthusiasts only dream of. Sabyasachi’s collaboration with H&M has deepened Sabyasachi’s global market share.

Collaboration leads to more innovation, efficient processes, increased success, and improved communication. Collaboration helps in increasing strengths of a company.

Competitors

No business operates in a vacuum. Whether its sole proprietor shop or a or a large company, a product is always being judged in comparison that provides the same value. Healthy market competition is fundamental to a well-functioning economy. Basic economic theory says that when firms have to compete for customers, it leads to lower prices, higher quality goods and services, greater variety, and more innovation. Competition is critical not only in product markets, but also in labour markets. When firms compete to attract good employees, they must increase compensation and improve working conditions.  Firms grow when they are grounded and they spend sufficiently on market intelligence. Competition is an important C in the 5 Cs model. 

The detergent market in India can be divided into premium (Surf, Ariel), mid-price (Rin, Henko, Tide) and popular segments (Ghadi, Wheel, Nirma, Mr. White). Regional and small unorganized players still account for the 40% market. Per-capita consumption of detergent in India at 2.7 kg is the lowest in the world.

In 1987, Ghadi was launched by RSPL (Rohit Surfactancts Pvt. Ltd.), the product was also less priced and targeted at the rural customers, middle class and lower-middle class customers. It also had more or less the same positioning strategy as Nirma. In 1988, HUL launched Wheel to take on Nirma. In early 2000’s Wheel beats Nirma and takes the No.1 spot. In late 2011 and early 2012, Ghari beats Wheel and takes the number one spot in Indian detergent industry. These detergent brands fought with each other on the basis of price.  Competition reduces prices which helps people from lower income strata to buy products.

Environmental scanning is the monitoring, evaluating, and disseminating of information from the external and internal environment to key people within the corporation or organization. Business environment analysis is a regular business feature. It results in a quantity of information related to forces in the environment. It usually relates to events, trends, issues, natural calamities and expectations. ETOP analysis (environmental threat and opportunity profile) is the process of gathering information about events and their relationships within an organization’s internal and external environments. The basic purpose of environmental scanning is to help management determine the future direction of the organization. Structuring of environmental issues is necessary to make them meaning full for strategy formulation.

Understanding of management strategy or organization policy and effectiveness is not as easy; it requires looking at how company is griped with challenges, looking at the threats and opportunities and finding solutions for facing it. It requires proper evaluation on the position of an organization, whether the adopted strategy is working well and if not why and how should it progress ahead. Strategies are means of operationally signing a policy for goals and objective. For company to function very well and to be productive to its maximum standard effective strategy should not be impeded.  Sometimes very micro and neglected issues mar the strategy.

ETOP involves dividing the environment into different sectors. Each sectors can be subdivided into sub sectors. For example oil & gas  sector can be broken down into sub-sectors such as exploration & production, integrated oil & gas, oil equipment & services, pipelines, renewable energy equipment, alternative fuels producers, oil equipment, services & distribution, alternative energy etc. ETOP further analyzes the impact of each sector and sub-sector on the organization. For example, GE Oil & Gas as an existing organization in this sector requires to scan the environment from an industry perspective: O&NG industry is divided into three major sectors – upstream, midstream and downstream. The upstream sector is a term commonly used to refer to exploration, recovery and production of O&NG. In industry jargon it is simply called Exploration and Production (E&P). The downstream sector is a term commonly used to refer to the refining of crude oil and the selling and distribution of natural gas and products derived from crude oil. The midstream industry processes, stores, markets and transports commodities such as crude oil, natural gas, natural gas liquids (liquefied natural gas such as ethane, propane and butane) and Sulphur.

An organization’s internal environment consists of the elements within the organization, including current employees, management, the organization’s culture which is defined by operating procedures and employee behavior. Though some elements affect the organization as a whole, others affect only the management. A manager’s philosophical or leadership style directly impacts employees. Traditional managers give explicit instructions to employees, while progressive managers empower employees to make many of their own decisions. Changes in philosophy and leadership style are under the control of the manager. Unlike the external environment of a business, the internal environment can be controlled. It is important to recognize potential opportunities and threats outside company operations. However, managing the strengths of internal operations is the key to business success. Leadership matters a lot in controlling the internal environment.

The external environment of an organization are those factors outside the company that affect the company’s ability to function. Some external elements can be manipulated by company marketing, while others require the organization to make adjustments. Organizations need to monitor the basic components of a firm’s external environment, and keep a close watch on it at all times. The external environment consists of customers, government, economy and competition.

Managing image of an organization is most important in the external environment. Corporate image, or reputation, describes the manner in which a company, its activities, and its products or services are perceived by outsiders. In a competitive business climate, many businesses actively work to create and communicate a positive image to their customers, shareholders, the financial community, and the general public. A company that bungles or ignores its image is likely to encounter a variety of problems. Once an organization gets into reputation problems, it goes on growing like weeds in a garden.

Opportunities and Threats: External opportunities provide an organization with a means to improve its performance and competitive advantage in a market environment. Some opportunities can be foreseen, such as being able to expand a franchise into a new city. When organizations can think far ahead, they can create some opportunities

External threats are anything in the outside environment that can adversely affect its performance or achievement of its goals. Ironically, stronger organizations can be exposed to a greater level of threats than weaker organizations, because success raises envy and competition which a successful organization needs to fight to get ahead. Examples of external threats include new and existing regulations, new and existing competitors, new technologies that may make products or services obsolete, unstable political and legal systems in foreign markets and economic downturns. When organizations are alert and have enough resource they can turn a threat into an opportunity, such as a new technology that may displace one of the key products but also provides an opportunity for new product development.

For GE Oil & Gas the opportunities are:

• According to figures released by America’s Cambridge Energy Research Associates, India is home to around 64 trillion cubic feet of unexplored gas at various locations. This gas can be extracted, and supplied into houses and production units to trigger country’s growth.
• Demand for oil and gas in India will keep on increasing due to country’s rising energy needs.
• Oil and gas majors like Cairn, ONGC and Reliance have lined up plans for huge investments in-order to increase oil and gas production in the country, which has fuelled the growth.
• GE oil & gas can grow from within by focusing on niche products and markets where its larger rivals aren’t a factor.
• GE specializes in growth areas such as drilling equipment and compressors.
• GE is cash rich company. It aspires to continue to develop technology overlaps between the businesses it has.
• Narendra Modi government is planning to set up several power plants. It is considering setting up gas based power generation projects in states like- Madhya Pradesh, Odisha and Uttar Pradesh. While it plans to set up thermal power plants in states like Andhra Pradesh, Chhattisgarh, West Bengal, Jharkhand and Bihar which produce coal, this is indeed good news.

 For GE Oil & Gas the threats are:

• The environmental pressure and market demand that oil companies experience today force them to explore new industries, i.e. renewables.
• State owned oil and gas companies like ONGC and Oil India limited are market leaders in the country. However, they are facing tough competition in oil exploration and production from private players like Reliance, Essar, Adani, etc.
• Analysts are doubtful GE Oil & Gas can achieve enough weight without acquisitions to be a major player in the industry.
• GE Oil & Gas needs to get bigger and develop a clearer strategy if it hopes to keep up with its larger competitors.
• The Oil & Gas sector need to emphasize on R&D. India is weak in it.
• Currently, Dehradun based University of Petroleum and Energy Studies is considered as the only private University which offers PHD, post graduate and undergraduate courses in energy and petroleum. This University aims to create professionals who can serve India’s rapidly growing oil and gas Industry.

This is how ETOP analysis provides clarity of which sector and sub sectors have favorable impact on the organization. It helps interpret the result of environment analysis due to which an organization can assess its competitive position.