The senior assessor s report aims to provide the following information: An indication of how to approach the examination question

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2 INFORMATION FOR CANDIDATES The senior assessor s report is written in order to provide candidates with feedback relating to the examination. It is designed as a tool for candidates - both those who have sat the examination and those who wish to use as part of their revision for future examinations. Candidates are advised to refer to the Examination Techniques Guide (see the following link: ) as well as this senior assessor s report. The senior assessor s report aims to provide the following information: An indication of how to approach the examination question An indication of the points the answer should include An indication of candidate performance for the examination question Each question has a syllabus reference which highlights the learning objectives of the syllabus unit content that the question is testing. The unit content guides are available to download at the following link: ADDITIONAL SOURCES OF INFORMATION The Supply Management magazine is a useful source of information and candidates are advised to include it in their reading during their study. Please see the following link to the Supply Management website: C3/SA report/july

3 SECTION A Q1 B 2 marks Q6 D 2 marks Q2 C 2 marks Q7 B 2 marks Q3 A 2 marks Q8 A 2 marks Q4 A 2 marks Q9 D 2 marks Q5 D 2 marks Q10 C 2 marks Analysis of Section A Performance in this section varied from one examination centre to another, thus indicating the varying levels of preparedness. There were few candidates who managed to score the full 20 marks. Generally, question 10 appeared to be the hardest. SECTION B Q11 Explain how TWO of the market forces in Porter s five forces theory might create competitive rivalry. (5 Marks) Q11 Required the candidates to explain how TWO of the market forces in Porter s five forces theory might create competitive rivalry. Responses were expected to demonstrate knowledge of Porter s theory and its application to the supply market by identifying and explaining any two of the competitive forces that fuel rivalry in the supply market supplier bargaining power; buyer bargaining power; threat of substitutes; and threat of new entrants. Each point was awarded up to 2 ½ marks. A diagram of Porters five forces without explanation would be awarded only 1 mark. Most candidates gave correct answers to varying degrees but a few misunderstood the question and digressed into themes associated with corporate and competitive advantage strategies. Q12 (a) Suggest THREE reasons why a buying organisation with a prestigious reputation would hold a strong bargaining position in a negotiation. (3 Marks) Q12 (a) This question required answers to suggest THREE reasons why a buying organisation with a prestigious reputation would hold a strong bargaining position in a negotiation. Answers were expected to identify bargaining variables (such as quality/service; association; profile; security; reference) associated with a buying organisation that suppliers consider prestigious. Each point was worth 1 mark. Many candidates seemed to have an idea of the question requirement but struggled to raise three points, most of them seemed to associate prestige with bulk buying or prompt payment of invoices. C3/SA report/july

4 Q12 (b) State TWO types of personal power. (2 Marks) Q12 (b) This question asked candidates to state TWO types of personal power. This was the easiest question in Section B as the vast majority of candidates obtained full marks for this question. Q13 (a) A buyer expects a realistic lead time to be ten days but will negotiate for a shorter period. Produce a table showing the LIM objectives for lead time. (4 Marks) Q13 (a) This question required the candidate to produce a LIM table in a situation where a buyer expects a realistic lead time to be ten days but will negotiate for a shorter period. This question aimed to test candidates ability to apply the LIM concept on a particular variable. 4 marks were allocated for this question as follows: 1 mark for a correctly labelled table (Like, Intend, Must), 1 mark for Intend being 10 days and 2 marks if the numbers in Like and Minimum are lower and higher than 10 respectively. Although a vast majority of responses included a correctly labelled the LIM table, the rest of the question was generally weakly answered. Many candidates saw 10 as Minimum and some answers never had a10, whereas others gave ranges in the objectives (e.g. 7-9 days). Q13 (b) Explain why a buyer might decide to use the BATNA option in a negotiation. (1 Mark) Q13 (b) This question asked candidates to explain why a buyer might decide to use the BATNA option in a negotiation. This question was not well answered. Many candidates simply defined BATNA or gave vague explanation such as achieve objectives and value for money. A vast majority failed to link BATNA to the fall back position when the Minimum objective is not achieved during negotiation. Q14 (a) Provide THREE disadvantages of making immediate concessions in a negotiation. (3 Marks) Q14 (a) This question asked candidates to provide THREE disadvantages of making immediate concessions in a negotiation. The aim was to test the candidates understanding of the importance and value of concessions. 1 mark was awarded for each point. Correct answers included points like - lost opportunity to trade the concession or push the supplier for more; a sign of weak negotiation ability; setting a precedent for the rest of the discussions. Most candidates gave average or below average response to this question. Q14 (b) Provide TWO reasons why a skilled negotiator might consider a wide range of variables to trade in a negotiation. (2 Marks) C3/SA report/july

5 (b) This question asked candidates to provide TWO reasons why a skilled negotiator might consider a wide range of variables to trade in a negotiation. This was to test the candidates knowledge of the attributes of a good negotiator and their effect on the negotiation. 1 mark was awarded for each point. This question was not well answered. Most candidates failed to recognise or appreciate the advantages of having many variables and related concessions e.g. to create negotiation/trading flexibility, opportunity, leverage; avoid deadlock or facilitate the finding of common ground; ranking, prioritising and bundling/grouping them; etc. Q15 Suggest FIVE benefits of using a SWOT analysis during negotiation preparation. (5 Marks) Q15 This question asked candidates to suggest FIVE benefits of using a SWOT analysis during negotiation preparation. The aim was to test the candidates understanding of the importance of negotiation preparation and the effect of internal/external pressures. 1 mark each for the above or similar and relevant Strong answers included not only identifying the elements of SWOT (Strengths, Weaknesses, Opportunities and Threats) on both sides but also suggesting how they would impact the negotiation leverage on both sides of the table. Each correct point was awarded 1mark. Many candidates merely described SWOT but were unable to link it to the question and thus received half marks. Q16 Describe TWO ways in which evaluating a negotiation might affect future negotiations. (4 Marks) Q16 (a) This question required candidates to describe TWO ways in which evaluating a negotiation might affect future negotiations. The aim was to test the candidates understanding of the benefits of evaluating negotiation performance. 2 marks were awarded for each point. A wide range of answers was expected relating to negotiation action planning and execution, meetings, tactics, etc.; and their outcomes linking to team performance, failures/successes, lessons learnt; failure/success of objectives; appraisal and administration of agreement; etc. Some candidates obtained high marks where they included the reflective nature of the question with a view to future improvements. Many candidates however appeared to misunderstand the question and some were even more lost by introducing irrelevant themes like supplier appraisal. Q16 (b) Provide ONE reason why an objective might not have been achieved. (1 Mark) C3/SA report/july

6 16 (b) Candidates were asked to provide ONE reason why an objective might not have been achieved. This was to test the candidates understanding of what causes negotiation failure e.g. unrealistic objective; failures in planning or persuasion; failures in implementation. Surprisingly, this apparently straightforward question was not as popular as Q12b. SECTION C Q17 (a) Q17 (b) Q17 (c) Describe the specific roles of FOUR potential members of a negotiating team. Explain how a member of the buyer s negotiating team might use reward power. Explain how THREE internal customers might influence the negotiation process and outcome. (4 Marks) (2 Marks) (9 Marks) Analysis of the Question Q17 (a) This question aimed at testing the candidates knowledge of the titles, roles and responsibilities of those involved in negotiations. Q17 (b) The question aimed at testing the candidates understanding of a specific form of personal power. Q17 (c) The question tested the candidates knowledge of who are internal customers and how they can influence negotiations through their own requirements. This is a non-specific question expecting answers that may vary based on candidates experience and academic knowledge. This was a high value question commanding 9 marks. Analysis of the Answer For part (a) The correct answers identified four titles in the negotiating team. Concession was given for titles such as secretary for summariser or accountant for expert if their roles were correctly explained. 1 mark was awarded for each correct answer. For part (b) the core answer should highlight a team member s authority to trade something of value to the other party e.g. award a future contract, to give a promise or assurance of contract extension, etc. This was a 1 mark short-answer question. Part (c) was a nonspecific question expecting varied answers based on candidates experience and study knowledge. Internal customers are normally the business departments whose names (marketing, finance, production, Technical, logistics, etc.) vary from one organisation to another. Some responses could also identify internal customers by titles linked to certain offices such as Engineer, Finance Director, etc. Purchasing department was not considered an internal customer (since internal customers were technically customers of purchasing) unless the answer would clearly bring out exceptional cases where the objective of the negotiation was primarily for the consumption of purchasing. Strong answers were to identify three internal customers and attach explanations including the main areas of interest for each, that would pressure the buyer to include them in the C3/SA report/july

7 negotiation variables. Some interests may conflict and compel the buyer to do a balancing act in order to get the best value for the organisation as a whole.1 mark was awarded for identifying an internal customer and 2 marks for explaining their requirements and how the negotiation plan will try to accommodate these varied requirements Exam Question Summary For part (a) was the most popular question in Section C as the vast majority of candidates managed to gain full marks. Incorrect answers reflected misinterpretation of the question by discussing types of people and people styles warm, tough, logical and dealer. For part (b) many candidates answered correctly but some were incorrect by referring to rewarding the negotiating teams or discussing gifts and bribes. Part (c) was a popular question which was generally well answered although many responses did not gain full marks because they simply identified departments and described their roles without linking them to the negotiation factor. There were also many that identified purchasing as one of the internal customers without giving a convincing explanation. Q18 (a) Q18 (b) Explain how a buyer might use each of the FIVE methods of persuasion when negotiating with a supplier which holds a dominant market share. Explain TWO actions a buying organisation might take to strengthen its position before negotiating with a supplier with a dominant market share. (10 Marks) (5 Marks) Analysis of the Question Part (a) aimed to test the candidates knowledge of the various persuasion methods and understanding of their appropriate use in negotiating with a dominant supplier. In part (b) aimed to test the candidates application of SWOT analysis in negotiation preparation involving a dominant supplier. Analysis of the Answer In part (a) to gain marks candidates were expected to identify each persuasion method (logic, emotion, threat, bargain, compromise) and demonstrate how such method could be applied against a dominant supplier. Identifying each method would earn 0.5 marks and inclusion of explanation would raise the mark up to 2 marks depending on how it links to a dominant supplier. In part (b) a strong answer would include an acquisition and analysis of the supply market information based on competitive bidding, independent experts, substitutes, other sources, consulting and collaborating with other buyers. Higher marks (up to a maximum of 2.5 marks for each of the two points) would be awarded to answers that linked these points to a dominant supplier. C3/SA report/july

8 Exam Question Summary Part (a) answers were average as the candidates identified the persuasion methods and described them. Those few who earned higher marks demonstrated a linkage of these methods to negotiations with a dominant supplier. Weak answers identified the wrong list that deals negotiation tactics (building block, silence, recess, salami, etc.). Part (b) generally was not well answered. However the question appeared to evoke plenty of guess work and creativity (outside the marking scheme) from many candidates. Some responses introduced convincing views such as- additional planning, strengthening the team e.g. by involving the tough and the dealer, understanding interests and positions of the people in the other team, improving corporate image by say paying invoices promptly, etc. Q19 (a) Q19 (b) Q19 (c) Explain TWO reasons why it might have been useful for this buying team to set clear objectives before the first meeting. Provide a detailed negotiation plan to show how the buying team might manage the following stages in the next days meeting: (i) propose stage (ii) negotiation stage. Suggest, using examples, how the buyer might use FOUR negotiation tactics to achieve Company A s objectives. (4 Marks) (8 Marks) (8 Marks) Analysis of the Question Part (a) aimed to test the candidates understanding of the effect of setting objectives relevant to the negotiation case study. Analysis of the Answer Part (a) expected responses covering themes such as keeping track of discussions; covering all requirements/variables; considering the range of possibilities coming from the supplier and preparing for counter offers; prioritise the variables and concessions e.g. term vs price; avoid recess and save time; etc. 1 mark would be awarded for each generic answer and 1 mark for application to the case. Part (b) tested the candidates understanding of the bargain and agreement stages of the negotiation meeting. (i) At the Propose Stage candidates would be expected to include points such as - supplier to propose first; buyer to listen effectively and ask clarification/hypothetical questions; buyer to link variables and get ready for bargaining stage; summarise frequently. (ii) At the Negotiation Stage the actions involved are: trade concessions; attach conditions to concessions e.g. if we would you...; apply numerous small concessions and move slowly/steadily from one to the next; summarise frequently; and keep focussed on the priority objectives. A mention of the roles of the team members and particularly that of the buying or finance expert may indicate a strong answer. A maximum of 2 marks was awarded for generic C3/SA report/july

9 answers to each stage. To gain other marks up to 8 marks, the candidate would use examples from the case study. Part (c) aimed to test the candidates understanding of the tactics used in a negotiation meeting. Answers needed to include four negotiation tactics (from- building block, onus transfer, one more thing, deadlines, salami, broken-record, re-escalation of demand, silence, recess, divide and rule). A generic answer listing FOUR negotiation tactics was awarded 0.5 marks each (maximum of 2 marks). Strong answers earned up to 2 marks each depending on relevance to the case. Exam Question Summary Part (a) was weakly answered with many candidates providing vague answers revolving around planning, preparation, objectives, and value for money. There was little or no reference to the case study. Part (b) was also weakly answered with little reference to the case. At the Propose Stage many candidates failed to spot the hypothetical question or the suggestion that the supplier should go first. There were also many cases of candidates mixing up propose and negotiation/bargain actions. Part (c) was relatively well answered as most candidates correctly identified the required four negotiation tactics and described them. However, most candidates could not earn higher marks for failure to link these tactics to the case. C3/SA report/july

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