Global Business

Alpha Corporation is a Carlsbad CA based startup founded by two 28 year old former professional surfers. They recognized the growing drone marketplace and the problem that many drones are lost when crashing, especially into the ocean. They have developed unique software, called HomeBase, that allows a drone to restart after crashing, whether on water or land, to be able to rise and return to its home base. Their 1st generation drone, waterproof and crash worthy, received rave reviews for its HomeBase technology, but was severely criticized for its inferior camera and video capabilities. Recognizing that it needed to upgrade its camera technology for its 2nd generation drone, they have elected to license and purchase CCD camera modules from Camera Modules Corporation, a Japanese company and the leading player in that marketplace.

Alpha Corporation Information: Alpha has high expectations for its 2nd generation drone but understands that its funding is running dry so its success is crucial to its continuation as an entity and strategy of going public. It has expectations of selling 250K units over the next year and needs inventory immediately in order to timely complete orders to key distributors and retailers in the drone marketplace.

As a Southern California startup founded by surfers, its office is very informal with couches and no offices. Dress is consistent with the surf community, board shorts, flip flops and t shirts. In addition, the office has the following dynamics:

· All employees are expected and encouraged to participate in negotiations and offer their views.

· Ceremony and formal social rules are not followed. No importance is placed on tradition, seniority or experience.

· All employees are very friendly, outgoing, and easy going.

· Greeting are usually a high five or warm handshake, and on a first name basis.

· Discussions are direct and frank. Information is openly shared. They are aggressive in their approach to negotiations.

· All employees are skilled in persuasive communications and argument and come prepared to negotiations, with many alternatives prepared in advance of meetings.

· They are impatient. Time is of the essence. They want negotiations to move along at a fast pace and to close ASAP.

· All employees are emotional, openly displaying their happiness or frustration.

Camera Module Corporation Information: Camera Module is the leading company in the supply of camera modules (for phones, automobiles and drones); however, it lags behind some of its competitors in the drone marketplace because it is a small market with significant regulatory concerns and potential liability from its supply of the key component for drones. As a result, it has publicly announced its intention to enter the marketplace in full force and gain significant market share. It will only enter the drone marketplace if it can do so profitably and will change its announced plans if it cannot gain significant market share because the small drone marketplace poses significant liability risk. It is also very interested in Alpha because of its HomeBase technology and believes that Alpha is set up for success in this market. In fact, it has considered investing in the next round of capitalization of Alpha, although has not made those intentions known to Alpha.

As a Japanese company, following its cultural traditions is very important. Its employees recognize, respect and follow these cultural traditions including the following:

· All employees collectively work together to form consensus decision making.

· Seniority is highly respected regardless if the senior person is the most knowledgeable on the subject being negotiated. Many times when a consensus decision is not reached the senior member will make the final decision, although never in front of the other side which would embarrass his/her cohorts and go against the consensus decision making process.

· In group negotiations, they select a speaker for the group. This speaker may not be the senior most member, in fact may be the junior member or individual who speaks English best. The speaker may in fact not be the final decision maker.

· Employees are formal and indirect in their communications. They formally greet the other side with bows, presents, exchange of business cards and use of last names. They also avoid eye contact.

· Employees are unemotional and passive. Public displays of emotion and aggressive behavior are considered culturally unacceptable.

· Employees are very patient, comfortable with silence during negotiations, and in deferring decisions to another day.