Zopa Negotiation – Everything You Should Know
For this article, we will talk about how ZOPA is in negotiation and some key points that you have to take note of when evaluating ZOPA.
By the end of this article, you should know how to recognize ZOPA easily and utilize it to your advantage.
What is ZOPA in Negotiation?
Zone of Possible Agreement or ZOPA is the range in a negotiation where parties can find a common ground. This is the area where parties will usually compromise and strike a deal.
In negotiation, parties need to work toward a common goal and seek areas that have at least some of their ideas to reach an agreement. Thus, why ZOPA is crucial in negotiation.
No matter how far you have come in your negotiation, an agreement can never be reached outside of the zone of possible agreement. For a deal to happen, negotiating parties must understand their needs, interest, and values in the negotiation.
You must take note that a ZOPA can only exist if there is some overlap between what all parties are willing to accept from the negotiation.
Negative Bargaining Zone
When parties cannot reach a ZOPA, then they are in the negative bargaining zone. In the negative zone of possible agreement, a deal cannot be reached in the current circumstance if no one from both sides is willing to adjust their view of what is acceptable.
For example, in the case of buying a car, if the buyer is not willing to pay more than $6,000 for the brand-new car which the seller only accepts, then neither of the party’s terms can be met.
This Negative ZOPA can only be overcome if negotiating parties are willing to learn and adjust to each other’s interests, views, and needs.
Positive Bargaining Zone
There is said to be a positive bargaining zone when the terms of both parties somehow meet or overlap with each other. This simply means that the buyer agrees to align with the terms the seller is willing to accept.
For example, you are hoping to purchase a car for a price between $4,000 and $5,000. On the other hand, the seller is willing to sell a car for a price between $4,750 and $5,500. In this case, positive bargaining exists because the price that you are willing to pay and the price that the seller is willing to accept overlap.
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BATNA as Foundation of ZOPA
In negotiation, for disputing parties to identify the ZOPA, they must know what alternatives are available. Your BATNA will help you determine each party’s reservation point or walkaway point in the negotiation.
Additionally, you should also explore the BATNA of the other party. By doing so, you can gain a realistic sense of what to expect in the negotiation.
Once you have seen an alternative that both parties will accept over an impasse, then a ZOPA exists.
Key Points to Keep in Mind in ZOPA
1. Your success depends on so many factors and not just your skills
Sometimes, luck plays a crucial role in negotiation, especially if you have no idea whom you will negotiate with on a given day. Some people will be unreasonable while others will be more understanding and are willing to offer more than what you hoped for.
Although you might have employed your best negotiation tactics, remember that some situations will always be uncontrollable.
2. Knowing your limits
Knowing the upper and lower boundaries of your ZOPA is a great advantage. A negotiator is usually reluctant to show or disclose their walkaway or bottom line. They will check all the options before walking away if none of those appeals to them.
It is possible to push the other party close to their limit to reach a favorable outcome by knowing the boundaries of a ZOPA.
3. ZOPA can be viewed in a different light
Your ZOPA can shrink, disappear, or grow during the course of the negotiation as both you and the other party shows their priorities and reassess each other’s walkaways.
When preparing for a negotiation, you should know that situations can always change and some will not go according to your plan. Thus, being adaptable to these changes is the key factor to being a successful negotiator.
4. Preparation
In a negotiation, you seldom know how big or small the ZOPA is or whether there is room for agreement at all. If you prepare well, you will have set guidelines for yourself when to walk away. Thus, establishing one boundary of your ZOPA.
However, the other party’s walkaway point will be unknown to you. The good thing is, you are both uncertain of your walkaways. This mutual uncertainty underlies much of the exchange of offers and counteroffers that follows.
Mastering the Art of Negotiation
Negotiations are complex as situations and offers keep changing even if you have a concrete idea or plan of the outcome. However, through proper negotiation, you can gain maximum value in the agreements you reach.
With our Negotiation Course For Procurement Professionals, you will learn how to deepen your understanding of the dynamics of negotiation. Additionally, you will understand key concepts in negotiation that will allow you to close every deal.
Frequentlyasked questions
+ What is ZOPA?
ZOPA is where parties usually see a common ground that enables them to compromise and strike a deal.
+ Why is it important?
ZOPA enables parties in the negotiation to work toward a common goal that incorporates some of their ideas in the agreement.
+ What is BATNA?
BATNA or the Best Alternative to a Negotiated Agreement is your backup plan if your negotiation does not lead to a deal.
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