This exercise places a medical supplier and a surgical center network in a recurring annual price negotiation where both sides know the relevant numbers, the history, and the alternatives.
The seller faces rising production costs and a pattern of past concessions that have eroded margins. The buyer is under pressure to reduce spending while continuing to request upgrades that increase the supplier’s costs.
These structural pressures create the conditions for a familiar “squeeze,” in which expectations of yearly price cuts persist even as the relationship becomes harder to sustain.
The scenario gives instructors a clear way to examine BATNAs, reservation points, and anchoring, and to show how quickly a straightforward price negotiation shifts once one side defines the starting point or reframes what stability and reliability are worth.