Solution for BDVS case

Why did BDVS avoid negotiating with APG headquarters? From the case we understand that BDVS has a strong customer base(bench staff) and a good distributor system. They were positioned along the lines of quality and the customer came to BDVS for quality and not the price.APG was formed in the lines of bringing down the hospitals cost by 3-12% on the supply items. BDVS knew that their margin will be less if they were to take orders from the APG HQ.Even though there was a nationwide Purchasing agreements in vogue, APG didnt restrict the individual member hospitals from procuring directly from the supplier of their choice. Hence BDVS did not see APG as a barrier.Moreover it could also be inferred that the Private label program was against the BDVS as a brand.all these factors could have resulted in BDVS not negotiating with APG HQ. April 1985- July 1985 : How did the negotiations go? BDVS understood that there was a dire need to negotiate with APG as the central purchasing oragnisation has increased its strength with the member hospitals. The negotiations seemed to head no where.The situation seemed tensed. Meeting 1 : APG side was ill prepared for the meeting.They put in wrong facts(Ex : 90% of BDVS business was at stake) Meeting 2 : There was a marked progress in the manner APG was dealing, they went into specifics(Ex : price of every item purchased by every member from every supplier) Meeting 3 : APG side was well prepared during this meeting.(Ex : They had bought in the estimates of prices in BDVS product category ) Meeting 4 : In here, APG pointed out rightly that the price at which BDVS was willing to supply was much higher than that of the competitors . They also wanted to find out if they could lower the prices. Aug 5th-How did the meeting go? Kozy and smith prposed a contact with prices approximately 20 % higher than the competitors.The proposal required delivery within 90 days and 95% of member hospitals purchases of venous blood collection tubes