Eureka Case 30 min Undergrad

Pastel Más Grande

You are Octavio Carranza-Mendoza, 43, Director Comercial of CarBajío, a tier-2 auto-components supplier in Querétaro. In two weeks you sit across from Holzmann-Schwarz, the German OEM that buys 38% of your output. The renewal frame contract is on the agenda. Their procurement lead, Stefan Eppinger, has already sent the opening shot: 9.2% price reduction or no renewal.

The situation

CarBajío sells precision-machined transmission components to three Mexican OEM plants of Holzmann-Schwarz. Current 3-year frame: MXN 1,640M/year revenue, 11.2% EBITDA. Eppinger's opening: 9.2% unit-price cut over three years. If you give it straight, your EBITDA collapses to 3.4% — below your bank covenants. If you walk, you lose 38% of your topline and your two production cells in Cuautitlán go dark.

You have spent eleven nights reading Eppinger's last three negotiations with other tier-2 suppliers. Two settled at 4–5% with payment-term extensions. One walked and was replaced. None of them traded the issues you think are tradable. Your CEO, Doña Mariana Ávila, expects a recommendation Friday: how do you approach the room?

Your job in this case: review the four issues on the table, map which of them are worth different amounts to your side vs theirs, and pick a negotiation approach that either splits the price or grows the pie. The first session is March 17 at 9:00 in Wolfsburg.

The decision

How do you open the room?

  • A · Counter-anchor on price, defend hard
  • B · Reframe to four issues; trade across them
  • C · Signal the BATNA, slow the room

The rest of the case is locked

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