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Frasier (A) Case Solution

Solution Id Length Case Author Case Publisher
710 1412 Words (4 Pages) Guhan Subramanian, Michelle Kalka Harvard Business School : 801447
This solution includes: A Word File A Word File

Fraiser negotiation involved two eminent parties of the television industry i.e. National Broadcasting Company and Paramount. NBC wants to pay less than a particular amount in order to run a show through Paramount while Paramount is asking for a greater amount. Both parties are relying on the fact that the other party will fulfill their demand, considering NBC’s BATNA, Paramount’s BATNA, and ZOPA. Value of the show can be created in the negotiation for both the parties by settling on an acceptable price rate and maintaining the same network in order to avoid the loss of viewership for NBC. The success of this negotiation can be credited to Marc Graboff, who deployed a win-win strategic negotiation which resulted in the overall benefit of the two parties.

Following questions are answered in this case study solution:

  1. Who are the parties in the Fraiser negotiation, and what are their interests? How can various parties influence the negotiation process and its outcome?

  2. What is NBC's BATNA? What is Paramounts's BATNA? What is your best estimate of their respective reservation prices? Is there a ZOPA?

  3. How can value be created in this negotation, and who is likely to get? What obstacles might prevent agreement, and how can they be overcome?

  4. How should M arc Graboff judge success in this negotiation? As President of NBC West Coast, how would you want to compensate Graboff?

Frasier A Case Analysis

1. Who are the parties in the Fraiser negotiation, and what are their interests? How can various parties influence the negotiation process and its outcome?

National Broadcasting Company (NBC) and the Paramount Television Group are the parties involved in the Fraiser negotiation. The two parties had different motives over the same situation, each pressing its objective to be attained. However, a middle path was required in order to come over a common conclusion. The interest of the Paramount Television Group was to increase the license fee of the show “Fraiser” telecasted from the  National Broadcasting Company (NBC) otherwise the show would be telecasted on the sister network of Paramount Television Group that is CBS; whereas, National Broadcasting company did not seem to be agreeing on the increase licensed fee. The Paramount Television Group company had a motive to telecast the show from their own network which would affect the viewership of the show originally telecasted from National Broadcasting Company (NBC), also affecting the viewership of the other shows being shown before and after the Fraiser.

The Paramount Television Group has a more strong influence over the National Broadcasting Company (NBC) for the reason that it was also their production and had another network available for the run. Whereas, National Broadcasting Company (NBC) had a good viewership due to which it negated the idea of paying more than the present situation, and planned to continue reaping the benefits wholly and solely. The Paramount Television Group also had an idea that the change of the network from National Broadcasting Company (NBC) to CBS would cause them a loss in less viewership despite they kept their firm stand on their point of view to take advantage of the benefit that National Broadcasting Company (NBC) had; which it had managed to maintain over the years.

2.What is NBC's BATNA? What is Paramounts's BATNA? What is your best estimate of their respective reservation prices? Is there a ZOPA?

BATNA stands for Best alternative to a Negotiated agreement. In case of NBC, the best alternative to a negotiated agreement was to offer the best possible value to avoid the change of network and loss in the viewership. In addition to this, switch in the network would have also resulted in price wars in the television industry. However, on the contrary, Marc Graboff the decision maker from National Broadcasting Company (NBC) had an idea that the very stance of the Paramount Television Group to switch the show over to another network that is CBS, was not fairly possible for the fact that the network could not afford to have a comedy show at such a high cost. Therefore, on the part of National Broadcasting Company (NBC), it was alright to bid on a price lower than the one proposed by the Paramount Television Group, yet more than what was already offered.

The Paramount Television Group was relying on the fact that Friaser was the key show of National Broadcasting Company (NBC) and that it would agree on the new price and terms otherwise resulting in huge losses. The Paramount Television Group proposed to switch the network of the show; however, they had an idea that the network would not be able to pay such a high license fee, yet they pressed on their proposal. This created a situation for both parties to come to a solution that was acceptable to them and hence the ZOPA, Zone of Possible Agreement, resulted in the benefit of both parties. Zone of possible agreement became possible when they cooperated and settled on an increase in price, not as the one proposed by The Paramount Television Group but a middle acceptable situation for both parties.

3. How can value be created in this negotiation, and who is likely to get? What obstacles might prevent agreement, and how can they be overcome?

The value can be created in the negotiation for both the parties by settling on an acceptable price rate for the show and maintain the same network to avoid the loss of viewership on National Broadcasting Company (NBC) and good will of Paramount Television Group. This middle situation will create value for National Broadcasting Company (NBC) in the form of maintained viewership not only for the Fraiser but also for the other programs being telecasted before and after it. On the other hand, Paramount Television Group would benefit from the high license fee that they initially wanted to have in the whole negotiation, resulting in a win-win situation for both parties.

The aggressive stand of Paramount Television Group on not coming down on a low license fee and forcing National Broadcasting Company (NBC) to accept the proposed rate might create an obstacle for a mutually decided situation. Paramount Television Group needs to show some flexibility to help National Broadcasting Company (NBC), accept the proposal and reap the benefits of the value that are lying on a middle path way. If the two parties remain resistant and strong on their motives, both of them will face a huge financial loss. On the other hand, going for a mutually decided situation and a solution will be beneficial for both parties. Therefore, there is a need to look up for a middle way and solve the problem.

If in case the problem is not resolved between the two parties it will also result in creating a bad name for the show itself in addition to the network including National Broadcasting Company (NBC) and Paramount Television Group.

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