Solution

1.0 Introduction

1.1 ROSHN Organisation Background

ROSHN is a Real Estate community developer powered by the Public Investment Fund (PIF), which is one of the world’s largest wealth funds, the PIF has the largest investment portfolio. In addition, the PIF focuses on long-term and strategic investment in the Kingdom of Saudi Arabia and around the world. ROSHN real estate company was founded to improve and develop high-quality residential communities for the people of Saudi Arabia.

Since ROSHN is one of the largest real estate development companies in the Kingdom of Saudi Arabia, they are highly committed to supporting the Ministry of Housing, and also National Housing Company (NHC) to reach the rate of home ownership to 70% by 2030 (ROSHN, 2024). One of ROSHN real estate company’s goals is to work with local partners to create jobs for Saudi people.  ROSHN will also improve The Quality-of-Life Program. The Quality-of-Life Program was launched in 2018 to improve the quality of life of residents in the Kingdom of Saudi Arabia by becoming homeowners, and also by providing a great community where all residents can find their daily necessities close to their homes, such as gyms, supermarkets, malls, restaurants, and much more.

1.2 Introduction of Category of Spend

One of the key aspects of ensuring that ROSHN’s operations run smoothly is providing its employees who work on-site with vehicles. Since there are no vehicle manufacturers within Saudi Arabia, ROSHN has to rely on suppliers who act as distributors. This highlights the importance of effective negotiations between ROSHN and its suppliers. If ROSHN does not negotiate well, the suppliers will have the upper hand, which could lead to unfavourable terms and conditions. Therefore, it is crucial for ROSHN to apply the best negotiation strategies to ensure that it gets the best possible deal from its suppliers. By doing so, ROSHN can maintain its competitive edge and continue to provide the best services to its clients.

In the vehicles spend category, ROSHN budget approximately SAR50 Million yearly for facilitating their purchasing, leasing and also maintenance.

1.3 Purpose of this Report

The objectives of this negotiation plan is informed by the fact that a negotiation plan is important for commercial negotiations in order for an organisation to leverage on competitive advantage and dominate their area of practice. The negotiations assists in prioritising on stakeholders interests, managing costs, evaluating quality and hence value for money outcomes (CIPS, 2022). Further, the commercial negotiation is essential for enhancing communication with all stakeholders successfully. In this integrative assessment, the purpose entail coming up with a negotiation plan forming basis for commercial negotiation. This is since a mutual agreement is achieved as part of the negotiation amongst all parties engaged (Mwagike et al., 2022). In figure 2, a summary of the requirements of negotiation plan in alignment with Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) as a core area of negotiation is put into account (Antal & Mitrik, 2020);

Figure 1:Negotiation Cycle

Source: Summarised from CIPS Module notes

This integrative assignment would come up with an appropriate negotiation plan for ROSHN organisation. This would be guided by available data, statistics sourced, factual information and CIPS Module Notes and tools.

2.0 Commercial Negotiation Plan

2.1 Preparation & Planning

In this initial phase of negotiation, it include laying ground for the entire process of negotiation by aligning the objectives of negotiation with stakeholders and environment (internal & external). Through this, it becomes possible to achieve the Best Alternative to a Negotiated Agreement (BATNA) as evidenced by CIPS Module notes. The rationale of this is that at the start of the negotiation process, ROSHN does not have a clear understanding of their BATNA or Zone of Possible Agreement (ZOPA). For understanding BATNA and ZOPA, as part of implementation of the negotiation plan, it is essential to identify stakeholders to be accountable and responsible  for the various phases pursued in the negotiation process.

2.1.1 RACI Model

RACI  model is used in the negotiation plan  to detail on the stakeholders responsible for different processes of the negotiation process (NC State University, 2017);

Figure 2:Summary of the RACI Matrix

Source: Summarised from NC State University (2017)

For success of the negotiation plan, the stakeholders involved defining their relationships include;

Responsible- The individuals taking the role of executing various roles are considered in this level. To procure the vehicles, the contract and procurement teams are involved. From the senior management teams, all stakeholders are tasked with distinct functions. For instance, to source for vehicles to be used in commuting in cities, admin and people professionals must be engaged to determine negotiations on the number of vehicles and also capacity.

Accountable- This transcends past decisions required to be made for ensuring inclusivity. For Vehicles sourcing in ROSHN, entire stakeholders need to account for how their operations are implemented. The senior teams in PS&M are involved in negotiation. The inventory planning of the vehicles are engaged to ensure that the negotiation process is successful and aligned with KSA laws (Silva-Aravena et al., 2020). For the vehicles category of spend, management and admin in ROSH must approve to determine the quality level to be negotiated with their suppliers.

Consult- As part of implementing the real estate projects by ROSHN, different consultants are involved. As active players in their business sector, they are involved in enhancing efficiencies in negotiation. The end-users of the real estate projects being pursued by ROSHN would need to be consulted in order to establish the quality of vehicles being offered. With ROSHN primarily using iSourcing in vehicles sourcing, this can entail sourcing timely feedback on improvements.

Inform– In the negotiation, there are stakeholders who would need to be notified and be aware of the process (Omar et al., 2021). As it shall be evidenced from the stakeholders analysis, these are classified as monitoring category. The real estate regulators in Saudi Arabia (KSA), quality assurers of the constructions sites would have to be informed. This is intended to ensure that their operations are aligned with expectations in the KSA  real estate sector.

2.1.2 Stakeholders Analysis

In line with RACI Model tool analysis, stakeholders analysis is instrumental. A stakeholder is “an individual/body of persons impacted by implementation of a project/offering products and services in their required format” (CIPS, 2022a). Also, by engaging the different involved stakeholders, negotiation is achieved in a strategic, operational and tactical way with sufficient support and commitment achieve. The different stakeholders for ROSHN are as summarised in the following;

Figure 3:ROSHN Stakeholders Groups

Source: Summarised from CIPS Module Notes

In negotiation process, the stakeholders categories (figure 4) are engaged in influencing supply chain operations and entire negotiation process comprising customers, transport teams and operations due to the nature of vehicles spend category. The different stakeholders elicit a direct implication on negotiation strategy. This is with complex issues managed elicited by globalisation, innovativeness and communication issues.

Taking into account of the vehicles spend category negotiations, the stakeholders have different interests and influence. This influence how they are involved in the negotiation and their handling (CIPS, 2022a);

Figure 4:Mendelow Matrix Analysis

Source: CIPS (2022a)

Low Interest; High Power- The Government of KSA since ROSHN is a government institutions and regulators in real estate sector, negotiations for the vehicles have less influence and interest. Their support is only ensuring that ROSH is facilitated and has an appropriate operating environment for successful negotiations.

High Power; Low Interest- The management teams in ROSHN and CEO/Directors have a lot of power in all operations for purchasing of vehicles. In particular, depending on the vehicles to be sourced, they scrutinize the list to ensure there are no wastages and right suppliers are engaged.

High Power; High Interest- The PS&M department in ROSHN has a significant power and interest as they drive negotiations on the vehicles spend category. Also, the real estate clients, KSA admin and employees have a significant influence of type of vehicles purchased hence directly influencing negotiation process.

Low Power; High Interest–  The vehicles sourcing involve the different players in the automobiles sector. In the negotiations, their interest is to ensure ROSHN gets the best deal from this process. Also, with real estate projects by ROSHN touching on the communities directly, accessing them would determine negotiations of the vehicles to be sourced.

2.1.3 SWOT Analysis

SWOT analysis in preparation of the negotiation is used to evaluate the internal environment of ROSHN to identify the strengths, weaknesses, opportunities and threats they have at the start of negotiation (CIPS, 2021). To achieve BATNA, communication and managing any idea which conflict is instrumental (Shiele, 2019). A summary of the analysis is as follows;

Figure 5:SWOT Analysis summary

Source: Summarised from ROSHN internal documents

To summarise, from the SWOT analysis, it is clear ROSHN operates through sustainable relations with their vehicles suppliers. To succeed in the negotiation, professionals such as legal professionals, vehicles experts and IT experts would need to be involved to easily achieve ZOPA. The existing opportunities entail appropriate negotiation in place, good brand image, reputation and leveraging on competitive advantage. The threats identified would potentially delay the negotiation process, but they would be prioritised and considered.

2.1.4 STEEPLED Analysis

This tool is identified in CIPS Notes as appropriate in scanning external environment for identifying implication of different factors influencing the vehicles negotiation process in ROSHN (CIPS, 2021a). The analysis is as shown in the following;

Table 1:STEEPLED Analysis

Source: Summarised from CIPS (2021a)……

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