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Amazon and Target are two of the largest retailers in existence, Amazon being one of the most successful in the world. There are rumors that Amazon is currently looking to buy and take over Target in the upcoming quarter. According to technology analyst Gene Munster, “The locations of Target stores are appealing and would provide a great opportunity for the sales of Amazon hardware. Moreover, the fashion appeal of Target's 1,834 stores makes this an interesting candidate (Loeb 2018).” As a part of Target’s Defensive Strategies Team, it is our responsibility to effectively and efficiently negotiate terms that best benefit Target as a company. This involves extensive research and preparation before negotiations begin to ensure a fruitful outcome.

When preparing for a negotiation, there are a few important things to consider. Successful negotiators are good at avoiding traps, ineffectiveness, and myths. All of these factors can come into play during negotiations and overcoming them can often be a challenge. Devising a smart and stable plan before negotiations ensures that Target will come out on top. We are concerned about our company as a whole and that includes current employees, customers, and finances.

Negotiation traps include leaving money on the table, settling for too little, walking away from the table, and settling for terms that are worse than your best alternative (Thompson, 2011). In 2008, Microsoft offered YAHOO! $44.6 billion to acquire their company and their offer was declined. Today, although still extremely successful, YAHOO! is valued at about $43 billion proving that YAHOO! fell into one of these traps by making the wrong decision (Desjardins 2015). As part of Target’s team, we are focusing on doing our best to avoid those traps. We are going to argue for the highest compensation we think Amazon will pay us, aiming for an asking price of $40 billion. Although we currently believe another competitor could also be after Target, we know for a fact they will offer less than Amazon and it would be unwise to take the other deal, even though we have a better working relationship with the other company.

Ineffectiveness during negotiation can also be a hindrance when trying to gain the best outcome. Factors such as egocentrism, confirmation bias, and satisficing all contribute to ineffective negotiating skills (Thompson, 2011). Most people believe they are better at negotiating than they really are. Our team at Target is making efforts to overcome these obstacles by communicating effectively amongst each other and keeping each team member on the same page. We are confident that by doing this we will be able to strike a deal with Amazon that maximizes our interests.

Debunking myths is another vital part of negotiating. Myths such as “Negotiations are a fixed-sum”, “Good negotiators are born”, and “Good negotiators take risks” are very common in the business world (Thompson, 2011). Often times good negotiation comes from experience and learning from past mistakes and business deals. Good negotiators also do not take risks if they can help it. Being tough or offering ultimatums tend to not end well in negotiating and can result in offending or putting off the client. Our Target team is willing to collaborate with Amazon and come to a fair compromise. While still being defensive of our company, we also understand we need to do what is best for Target financially, while still maintaining a trustworthy and respectful relationship with Amazon.

Ultimately, we have decided to make a deal with Amazon. We will take the deal of $40 billion and we have hammered out other details for the plan as well. Amazon will give a large percentage of in-store and online employees jobs. We have also negotiated to have some senior advisors stay on and help consult with Amazon. We are confident that we negotiated to the best of our abilities while avoiding known traps and coming to a fair and satisfying agreement.