Col Sim 3 Devmt Site Neg

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Col Sim 3 Devmt Site Neg

  1. 1. Simulation 3: Site Development Introduction ResortoCol, ColmarCo’s specialist in all-inclusive resort development, is shortly to enter into negotiation with the government of a less developed nation which has not yet been opened up to tourism with a view to securing permission to acquire and develop on an attractive1.25km coastal site. (If it helps to envisage a specific nation, please do so, provided it is not yet developed for tourism to any significant degree. I was picturing Albania when I wrote this) In advance of the meeting both sides are considering their positions and negotiating stances. One small group will assume the role of the negotiating team from ResortoCol ( Developers) and the other will represent appropriate members of the national / regional / local government.( Government) Each group will prepare its ground, and seek to ensure that the finally negotiated position (if it is possible to arrive at one) will be to its distinctive advantage. The Context The Developer , ResortoCol, is a major player in the worldwide development of 'all-inclusive' leisure resorts. In the face of the growth of this market and the demand for 'new' destinations, the company is continually seeking out new development opportunities particularly in undeveloped / underdeveloped economies. The company has a hard-nosed attitude to business and is clearly focused on the proverbial 'bottom line', that is to say upon profit and rate of return as is evidenced by its history and mode of operation: Founded in the late 1950s by two French and American entrepreneurs (servicemen who had met during WW2), the company swiftly established itself as a hotel and resort developer in Spain (60s & early 70s), Portugal (70s & early 80s), Turkey , Caribbean & Tunisia (mid / late 80s), Far East ( late 80s & 90s). The preferred mode of operation for the company is as follows :- • develop resorts in the earliest stages of destination creation • maximise the use of government incentives (of whatever form) • exploit government tourism/development naivety & lack of control. • 'milk' the early 'premium price' market • aggressively develop into the mass market over 5-10 years • sell on at the 'peak' (when the destination is reaching the end of the growth stage of the product life cycle where the sale price can be maximised before over-development, over-supply, unfashionability and unprofitable price discounting become evident.)
  2. 2. The past trading record has shown that this deliberately short-termist approach is the key to the company's success, and has reinforced its belief that the minimisation of development and operational costs coupled with a well-timed exit from the market is much more crucial than taking a long term view. The Government The government is the first democratically elected body in the country for a generation. The population is filled with expectancy and demands economic regeneration as the number one priority. The general conditions within the country are difficult, to say the least:- • Years of repression have seen little industrialisation and minimal infrastructure development • The economy is mainly based upon subsistence agriculture and outmoded/uncompetitive (non-market-led) heavy industry generating few exports and little in the way of hard currency • Effectively closed borders for years have resulted in little exposure to western trade influences • The general lack of development has meant that there are vast areas of attractive and unspoilt coastline, hinterland and heritage with considerable tourism potential • Strong indigenous culture and traditions unsullied by western influence • Very low wage / low skill economy with chronically high unemployment • Little formal education and training • Strictly limited central government financial resources, targeted, of necessity, towards national infrastructure provision (airport / arterial routes / telecommunications etc). Little or no direct, up-front, financial inducement is available to secure the inward investment which is so desperately needed to provide new industrial 'plant'. • Lack of a developed or sophisticated national or local public sector management structure for planning, resource allocation & control. • Intense pressure on the government to deliver in the immediate rather than the short or medium term - the 'honeymoon', period of grace afforded by the populace to the government is over. The site in question This is a beautiful cove with a magnificent unspoilt beach, with small dune system, some 1.25 km long. The attributes of the site are as follows :- • size: 1.25 km long x 400 metres back from the high tide mark. To include the entire beach and the sea up to 500 metres from the low tide mark. • ownership: 23 individual native owners of small parcels of highly productive agricultural land. Land has been handed down over generations within local families. • buildings : 30 small family homes, plus 2 boathouses to house the fishermen’s boats and smoke, preserve & store their catch. • infrastructure : nearest surfaced road is 2.5 km distant. Site reached by a track barely useable by motor vehicles. No mains drainage /sewerage, tap water. Low capacity electric system. One phone in the community. No community services to speak of. • other features : attractive rolling hinterland, in easy day trip distance of significant natural and heritage attractions.
  3. 3. The project This is the development of what has become ResortoCol’s trademark product: an all- inclusive leisure resort demanding complete exclusivity over the entire site in question. In Phase One this will comprise a variety of styles of high quality serviced accommodation for 520 people with extensive sports and leisure facilities to meet the needs of a discerning international clientele. Phase Two, subject to the success of Phase One, will add further accommodation units, possibly in a self-catering format in 2 years time. (NB. For this product, think ‘Sandals’ and see: http://www.sandals.com Other matters. ResortoCol is developing one new site per year currently and has interests in this site and 2 other possibilities in the Pacific Rim. It is hoping to make a site selection from the three after this meeting. Roles &Tasks to be Undertaken. Three teams are required: 1. Chairing Team of THREE or FOUR people. Their roles are to: • produce an agenda for the meeting to be furnished asap to both other teams to enable them to prepare for the meeting • make an opening statement of welcome introducing how you wish the meeting to run. • chair / manage/ summarise the meeting and the nature of agreement reached under key headings • Take minutes of the meeting and record important resolutions • Produce a written Draft Heads of Agreement embodying the resolutions made and plotting the way forward for the parties and present it at the end of the negotiation. 2. ResortoCol (Development Negotiating Team) of half the group remaining Their roles are to: • EACH individual (or pair – depending upon the number of issues on the agenda) to take a LEAD on at least one key issue and present and negotiate it to a conclusion with their ‘opposite number’ on the Government Negotiating Team. This involves: • Considering and defining a negotiating position on the issue between the extremes of what you IDEALLY WANT and the MINIMUM YOU NEED to achieve your objectives. • Considering what your adversary’s position on the issue might be and how you will ‘handle’ this in terms of negotiation strategy. • Producing in writing for your Senior Negotiator (and for me for marking purposes) a brief of your negotiating position clearly defining your targets and negotiating strategy. • The Team must identify a Senior Negotiator to take responsibility for co- ordinating and delivering the negotiating strategy.
  4. 4. 3. Government Negotiating Team of the other half the group remaining. Their roles are to: • EACH individual to take a LEAD on at least one key issue and present and negotiate it to a conclusion with their ‘opposite number’ on the Government Negotiating Team. This involves: • Considering and defining a negotiating position on the issue between the extremes of what you IDEALLY WANT and the MINIMUM YOU NEED to achieve your objectives. • Considering what your adversary’s position on the issue might be and how you will ‘handle’ this in terms of negotiation strategy. • Producing in writing for your Senior Negotiator (and for me for marking purposes) a brief of your negotiating position clearly defining your targets and negotiating strategy. • The Team must identify a Senior Negotiator to take responsibility for co- ordinating and delivering the negotiating strategy. Assessment All negotiations will be evaluated and assessed, each team being awarded a Base Mark which will be moderated, as appropriate for conspicuous individual performance. For Government and Developer teams the criteria will be: • Pre-negotiation: development of appropriate negotiating position and strategy on each issue (being clear about 'wants' and 'needs': i.e. 'the negotiating territory') • Negotiation: ability to clearly articulate demands and to negotiate within the limits identified For the Chairing Group the criteria will be:- • Pre-negotiation: development of Agenda and opening statement/handling instructions • Negotiation: managing conflict; keeping focused on resolution of issues; summarising the position, finding a way forward; an accurate restatement of the Heads of Agreement on each issue.

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