"The Operator of the Tunnel That Links Britain and France

question 76

Essay

"The operator of the tunnel that links Britain and France, Eurotunnel, said that commercial and tourist traffic using its car and coach shuttle service had fallen sharply in 2004, leading to a drop in operating revenues of 4%. Eurotunnel's chief executive, Jean-Louis Raymond, blamed cut-throat competition from budget airlines." (news story, January 2005)
a.If Mr. Raymond is correct, are the services of airlines and Eurotunnel substitutes or complements?
b.Use demand and supply analysis to explain how lower airfares between Paris and London impact the market for the shuttle services of Eurotunnel.

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Definitions:

Negotiation Planning

involves preparing strategies and objectives before entering into negotiation talks to better position oneself for favorable outcomes.

BATNAs

A reiteration emphasizing the importance of understanding one’s best alternatives to a negotiated agreement as crucial leverage in negotiations.

Distributive process

The method through which resources or outcomes are allocated among parties, often implying a zero-sum scenario similar to distributive bargaining but with a broader application.

Integrative process

A negotiation strategy focused on collaboration and finding mutually beneficial solutions for all parties involved.