Scenario

Because of financial problems, Francisis forced to sell his antique car. Last week Francis advertised his1936 Rolls Royce Silver for sale. Yesterday Francis received a callfrom Mr. Lee who offered him $500,000 to buy his car. Francis didnot accept this offer as he need more time to consider. Thismorning, another collector of antique cars, Mr. Chan, whospecializes in the Rolls Royce and Bentleys cars, phones Francis tomake up an appointment to see his car. Before meeting Mr. Chan,Francis determines to set his resistance point at $500,000. Basedon this resistance point, he sets his selling price at$520,000.

After inspecting Francis’s car, Mr.Chan is very satisfied with the quality of Francis’s car anddetermines to buy the car. When Francis indicates his sellingprice, Mr. Chan responds quickly and says, “Your offer is notacceptable. I could offer you $490,000. Please accept it.” In fact,the resistance point of Mr. Chan is $510,000.

Question 3

Evaluate whether Francis uses a rightapproach to set his target point and resistance point.      

Question 4

Identify the bargaining range of bothparties and the bargaining zone for the above situation. Explainwhether there is any possibility for both parties to reachagreement.

Question 5

Identify and explain briefly ONE effectivenegotiation skill of Mr. Chan.