MBI vs Epsilon: Role of MBI
This case revolves around a negotiation scenario where the newly appointed CFO of MBI, the world’s third-largest automaker, is tasked with negotiating a contract with Epsilon, a supplier of in-car infotainment systems. MBI is preparing to launch a compact car and aims to sell 100,000 units in the first year, with a target of 500,000 within three years.
MBI has selected Epsilon as the preferred supplier after extensive research. The negotiation primarily concerns licensing fees, per-unit charges, update costs, and access to different levels of content (Basic, Selected, Extended, Premium). A key challenge is that Epsilon requires MBI to assume full responsibility for accidents caused by driver distractions, adding complexity to the negotiations.
The CFO has recommended exploring alternative suppliers, preparing a negotiation strategy, and forming a specialized negotiation team. MBI’s goal is to secure a favorable deal with Epsilon on licensing fees, risk management, and content access. If negotiations fail, MBI has an alternative offer worth €7.25 million.
MBI has selected Epsilon as the preferred supplier after extensive research. The negotiation primarily concerns licensing fees, per-unit charges, update costs, and access to different levels of content (Basic, Selected, Extended, Premium). A key challenge is that Epsilon requires MBI to assume full responsibility for accidents caused by driver distractions, adding complexity to the negotiations.
The CFO has recommended exploring alternative suppliers, preparing a negotiation strategy, and forming a specialized negotiation team. MBI’s goal is to secure a favorable deal with Epsilon on licensing fees, risk management, and content access. If negotiations fail, MBI has an alternative offer worth €7.25 million.
Collection: IESE (España)
Ref: NEG-50-E
Format: PDF
Number of pages: 3
Publication Date: Nov 6, 2024
Language: English, Spanish
What material is included in this case:
Description
This case revolves around a negotiation scenario where the newly appointed CFO of MBI, the world’s third-largest automaker, is tasked with negotiating a contract with Epsilon, a supplier of in-car infotainment systems. MBI is preparing to launch a compact car and aims to sell 100,000 units in the first year, with a target of 500,000 within three years.
MBI has selected Epsilon as the preferred supplier after extensive research. The negotiation primarily concerns licensing fees, per-unit charges, update costs, and access to different levels of content (Basic, Selected, Extended, Premium). A key challenge is that Epsilon requires MBI to assume full responsibility for accidents caused by driver distractions, adding complexity to the negotiations.
The CFO has recommended exploring alternative suppliers, preparing a negotiation strategy, and forming a specialized negotiation team. MBI’s goal is to secure a favorable deal with Epsilon on licensing fees, risk management, and content access. If negotiations fail, MBI has an alternative offer worth €7.25 million.
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MBI has selected Epsilon as the preferred supplier after extensive research. The negotiation primarily concerns licensing fees, per-unit charges, update costs, and access to different levels of content (Basic, Selected, Extended, Premium). A key challenge is that Epsilon requires MBI to assume full responsibility for accidents caused by driver distractions, adding complexity to the negotiations.
The CFO has recommended exploring alternative suppliers, preparing a negotiation strategy, and forming a specialized negotiation team. MBI’s goal is to secure a favorable deal with Epsilon on licensing fees, risk management, and content access. If negotiations fail, MBI has an alternative offer worth €7.25 million.
Geographic Setting: Germany
Industry Setting: Automotive and auxiliary
Learning Objective
The pedagogical objective of this case is to teach students the critical aspects of negotiation in a complex business environment. The case focuses on the negotiation of licensing agreements, risk management, and supplier relationships, all while balancing the strategic goals of a large organization. It encourages participants to evaluate various negotiation tactics, understand the importance of risk assessment, and weigh the financial and legal implications of contract terms. This case is designed to foster discussion on decision-making, strategic negotiation preparation, and achieving favorable outcomes in high-stakes business situations.
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