SITXMGT002: Business – Establish and Conduct Business Relationships Case Study - Report Writing Assessment Answer

Internal Code: E_AI_DHFA_AHC Code: SITXMGT002

Establish and Conduct Business Relationships - Report Writing Assessment Answer

Assignment Task: Activity A – Conduct negotiations (group activity) Use the following case study and work in teams of three to complete Tasks 1, 2 and 3 in Activity A. Activities B and C are to be completed as individual work.

Case study - SITXMGT002

You are the purchasing manager for a hotel complex. The hotel has a number of outlets.

• An up-market bistro seating 200 and open Tuesday to Sunday (Friday and Saturday nights average 300 covers. Sunday lunch and dinner usually average 150 to 200 covers.)
• A public sports bar for up to 250 patrons
• An informal lounge bar with seating for 60
• A two-lane drive-through bottle shop
• A gaming room with 70 poker machines
• A small coffee shop seating 20, attached to the gaming room. SITXMGT002

All stock required for the outlets must be requisitioned through your department. You’re responsible for dealing with suppliers, placing orders, receiving deliveries, storing and distributing stock, contacting maintenance and repair specialists as required, and managing the cleaning contractor. SITXMGT002 You have the authority to negotiate contracts with suppliers to the value of $150,000 per annum on your own. Above this amount, the Assistant Manager must negotiate with the General Manager to obtain final approval for all contracts. The hotel’s owners have received approval to extend a section of the bistro into an outdoor garden dining area which will seat an extra 100 guests. They’re demolishing a wall and replacing it with large glass panels and doors. The outdoor area requires appropriate furniture, umbrellas, awnings, and additional cutlery, crockery, glassware, and service equipment. SITXMGT002 They’re building a small bar in one corner of the garden area for use during busy periods or to service the area if it’s booked for a private function. They’re covering 1/3 of the area closest to the doorways leading from the internal bistro area with a permanent roof. For the cooler months, they’re considering either attaching outdoor gas heaters to the roof area or purchasing free-standing heaters. The renovations will take three months. An opening date has been set for the first Thursday in December. Promotion of the new area commences in one month. Customers can make bookings six weeks prior to opening. It has been forecasted that the new seating area will lead to a 40% increase in business in the bistro over the summer months. You’ve been given the job of sourcing all furniture, large and small equipment, and food and beverage service equipment required for the new dining area. You may decide to use current suppliers or locate new sources. Price and the ability to supply the products and services within required time frames will be important considerations. Any contracts for equipment must include delivery and installation deadlines. SITXMGT002 The bistro in its current format has been open for seven years. The food and beverage manager has indicated that the current service equipment (especially the crockery) is showing stains and signs of long-term use. Management will consider investing in new crockery and possibly cutlery for the whole bistro if the price is within budgeted range. Otherwise, amounts required to increase current supplies will be purchased. However, it must match or be similar to the current service equipment.

Choose one area, product or service to focus on for the purposes of your negotiations. SITXMGT002

• Service equipment: glassware, cutlery, crockery, etc.
• Furniture: tables, chairs, service stations
• Large or small bar equipment for the external bar
• Décor: umbrellas, shade awnings, table centre-pieces, decorative pots, water features or other decorative items
• Outdoor heating systems
• Linen
• Garden supplies and/or ongoing maintenance

Task 1a: Selection of items and suppliers (Group Activity) - SITXMGT002 The team of students select which items they will negotiate on from the above areas. This forms the basis of data for the report. The students should show details of any web sites used for research. The students must show what information they need to research before making initial enquiries with potential suppliers. Task 1b: Prepare a report to be used for the role play (Group Activity) - SITXMGT002 Once you’ve decided on suppliers to negotiate with, research the product, people and their organisation. The report should show the results of student’s research and any cultural factors they will need to consider during negotiations. Their report should list and prioritise their objectives, negotiable and non-negotiable requirements, desired outcomes and BATNA. The report should establish what concessions (if any) are the students prepared to make during negotiations to achieve their objectives. The report should show what roles team members will play during the negotiations. The report needs to have a list of internal and external issues that could affect this business negotiation as well as any challenges that can be foreseen to occur during the negotiation process. The report should include strategies for dealing with such challenges. The report should establish:

• who the students might seek input from within their organisation before or during negotiations
• who the students will communicate the results of negotiations to
• a written agenda for the negotiations.

Task 2: Role-play – (Group Activity) - SITXMGT002

• With your team, role-play a negotiation with the suppliers in Task 1. The duration of the negotiation role play will be a maximum of 20 minutes. A knock on the table will indicate when 15 minutes has been reached.
• Your assessor will use the following checklist to assess you.
• Make sure you demonstrate the following skills in your role play.

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