Reed-Ypec Case
Reed oilwell is an American drill bit manufacturing company looking to expand into Ecuador and other South American countries. While YPEC an Ecuadorian oil field service company wants to buy drill bits for its top customers. This deal is very important for Reed Oilwell, as they view this as an opportunity to get into the Petroecuador supplier network and also boost its sales revenue, as due to recent economic recession the business has been little slow. The most important part of this negotiation is the cross cultural elements that have to be considered by the Reed Oilwell to strike a deal with YPEC team.
From the Reed oilwells point of the view, certain must have items on the negotiation table will be, that the sales team led by Pablo Ascona:
1) Be prepared to accept the cultural differences and have an engaging conversation with the team from YPEC and built their trust, which is very important in the South American culture.
2) Have a great knowledge of the product that they are there to sell-PDC drill bits
3) Know the prices of the different size of PDC drill bits and also know how they fluctuate with the change in oil industry.
4) be mindful of their competitors in the market and get enough information on them and on their prices.
5) Reassure that there will not be any delay in the future shipments since the COO, expressed little displeasure about Reed oilwell recent delay in shipment.
This business deal is very crucial for Reed oilwell since this is the best marketing opportunity available for them to get into the South American region. The team should also keep in mind the political situation in Ecuador might work out to their advantage in the future, as Petroecuador might be a near monopoly soon. Hence Reed oilwell is looking for a long term benefits out of this deal, relationship building strategies should be given high importance and they should be willing to compromise to a great extent on the price of the PDC drills bits.
The most important job of the Reed oilwell sales team is to be able to Empathies with the YPEC negotiation team. As Ecuador has a high context culture compared to America, Reed oilwell team should be mindful of certain important cultural difference that would play a great role in getting this deal.