Francis & Mayo, Inc.: Alex Smith

7 Pages Posted: 21 Oct 2008

See all articles by Sherwood C. Frey

Sherwood C. Frey

University of Virginia - Darden School of Business

Jacob Ulvila

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Abstract

This case provides confidential information from the perspective of the seller of an exotic automobile. The companion case is "Francis & Mayo, Inc.: Richard Mayo" (UVA-QA-0374). The pair of cases provides an opportunity for students to experience face-to-face negotiations in a disruptive bargaining context.

Excerpt

UVA-QA-0375

Rev. Nov. 9, 2010

Francis & Mayo, Inc.: Alex Smith

You are Alex Smith, an attorney and business agent for a number of professional athletes based in Dallas, Texas. Recently one of your clients, who has tired of his 1972 Lamborghini Espada, asked you to sell the vehicle for him. Emphasizing that he was definitely not interested in any trades, he instructed you to get the highest possible cash price. In addition, he insisted that the automobile be sold by the end of January 1988, because he would be taking delivery on a new car in early February and wanted to pay cash for the substantial balance that would be due.

Back in December, when you received your client's instructions, you stopped by his house to look at the car (except for pictures in magazines, you had never seen a Lamborghini). It was by no means new. You were surprised; however, that the odometer indicated only 42,000 miles, even though the automobile was 16 years old. Your client explained that he had bought the car in 1982 from an older gentleman who bought it new and drove it sparingly—less than 3,000 miles per year. For the past six years, under the ownership of your client, the car had been driven primarily in the off-season. You noticed that although both the paint and the two-toned leather interior exhibited signs of age, they looked pretty good. The car's brown color seemed peculiar for a flashy exotic, but your client told you that Lamborghini had in fact painted its 1972 show car the same color. You chuckled over the eight-track tape player in the dash and were surprised to see four seats in an automobile of this nature. Your biggest thrill came when your client let you take it for a spin. The high-revving, 350 horsepower, V-12 engine was like nothing you'd ever driven. It had plenty of power, but still smooth. You knew that this was no ordinary car, but you were not sure how to go about selling it. As you leave, your client gave you a spec sheet (Exhibit 1) that he had found in the bottom of the glove compartment.

For the past six weeks, you undertook the most obvious courses of action in an effort to move the car quickly—advertisements in newspapers and visits to local car dealers. As a result of the newspaper advertisements, you have entertained about a dozen tire-kickers, who just wanted to drive a Lamborghini but had neither the intentions nor the means to buy one. Nevertheless, the ads were drawing a steady stream of enthusiastic lookers. The best offer had been made by a local used car dealer who was willing to buy the vehicle for $ 18,000. He intended to display it in a highly visible part of his used car lot in an effort to attract prospects who might buy one of his other automobiles. You had an uneasy feeling about that offer and suspected that the car could be worth a lot more; in a recent cocktail party conversation, someone had mentioned that a new Lamborghini Countach would run $ 125,000 to $ 150,000.

. . .

Keywords: negotiation

Suggested Citation

Frey, Sherwood C. and Ulvila, Jacob, Francis & Mayo, Inc.: Alex Smith. Darden Case No. UVA-QA-0375. Available at SSRN: https://ssrn.com/abstract=911855

Sherwood C. Frey (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/frey.htm

Jacob Ulvila

affiliation not provided to SSRN

No Address Available

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