CASE STUDY

Negotiation Strategy Support for Leading Insurance Company

Jan 8, 2021

Introduction

In recent times, the balance of power for a successful negotiation strategy has dramatically shifted from buyers to suppliers. This shift has come about for different reasons such as suppliers eliminating their competitors by driving down costs or implementing disruptive business strategies. Moreover, the need for highly responsive supply chains has offered suppliers with the leverage to charge the prices what they want. In some cases, buyers have compelled suppliers so far that they have to exit the market, giving the remaining few more clout. Whatever be the reason, companies are no longer in the position that they can rely on hard negotiations. They need to approach suppliers strategically and follow procurement negotiation strategies that can help them gain the upper hand in the business.

Want to discover how you develop a successful negotiation strategy by implementing these best practices? Request a free proposal and we will get back to you with our customized solutions

Key procurement pain points that were addressed in this study:

  • To identify and develop effective negotiation strategy with the leading cloud service providers in the market
  • Understanding and benchmarking key vendors’ cloud offerings in terms of features, price, and services

The importance of negotiation strategy

  • Negotiations help the procurement professionals to ensure that the goods and services delivered are commercially sound and viable.
  • Negotiation in purchasing is especially needed if there are varied clauses or the quoted prices are unreasonably high.
  • Negotiation strategy that can be helpful in case of conflict between the buyer and the supplier.
  • Post tendering negotiation may also offer improvement possibilities in suppliers’ products and services.

Key objectives of this study focused on:

  • To support client’s IT procurement teams in coming up with best-in-class negotiation strategy (outside potential spend) with the target cloud service providers
  • Providing a complete information on the various aspects including the cloud services discounting options, SLA assessment, price was among top players, price comparison, things to consider while negotiation with cloud service providers and many more
  • To acquire information from various reliable sources

Creating a successful purchasing negotiation strategy

  • The Good/ Bad Guy Strategy
  • Provide New Market Opportunities
  • Develop Good Relationship with Suppliers
  • Don’t be Naive, Offer Counter Prices
  • Change Your Buying Pattern
  • Learn When to Walk Away
  • Collaborate with New Suppliers

What were the procurement insights derived in this assessment of negotiation strategy by SpendEdge?

  • Provided recommendations on the best negotiation strategy that can be adopted by client to get the best price in the market
  • Helped the client in gaining a good comparison of the prices that is being offered by different service providers
  • Helped in gaining understanding on who would be the best fit supplier of cloud services not only from cost perspective but also from services and quality perspective

Creating a successful negotiation strategy is crucial for companies to develop effective strategies. Stay ahead by requesting service on our procurement platform to gain the latest insights into procurement risks.

Success Story

Negotiation strategy support for a leading insurance client

Challenge: The client, a leading player in the insurance sector wanted to develop a successful negotiation strategy.

Benefits offered: Helped the client collaborate with key suppliers and optimally reduce costs associated with procurement.

SpendEdge Advantage

SpendEdge shares your passion for driving sourcing and procurement excellence. We act as a global strategic partner for leading Fortune 500 firms and other leading companies across industries. Our strength lies in delivering robust, real-time procurement market intelligence solutions that help sourcing and procurement professionals make informed decisions. Our innovative procurement solutions also help enterprises transform structural capabilities, improve execution efficiency, and fast-track time to savings. Every business needs smart procurement intelligence to stay at the top of their game; we provide actionable insights utilizing lean methodology to help enterprises make better purchasing decisions. We offer businesses with the precise combination of resources, tools, and techniques to help them redefine sourcing and procurement capabilities. We cover a broad spectrum of industries starting from pharmaceutical and life sciences to transportation with expertise in supply market intelligence, spend analysis and benchmarking supply chain risk assessment, and category management.

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