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Can't believe Sugar thought Chris's deal with the ticket agency was "shrewd"
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The Mentalist
11-12-2010
It wasn't shrewd, it was a big mistake that he happened to get away with. Yes, they still won the task in the end, but by giving a share of all revenues, they gave away far more profit than they needed to, and they removed any incentive for the ticket agency to actually sell any tickets. It's basic business sense.

The reason they won was because the other team did so badly, not because it was a shrewd move. Chris made a big mistake this week, and he's very lucky not to have been fired for it.

Alan Sugar can't really think that was "shrewd", can he?
Jepson
11-12-2010
I agreed with that POV initially but having done some maths on the available figures I changed my mind.

Chris was absolutely correct that getting the agency on board and, equally importantly, depriving the other team of the agency's efforts was of fundamental importance.

He certainly cocked up the negotiation and seemed a little confused about what he'd actually offered but the main point was that he got the deal.

I'm not sure that Sugar appreciated that or was just doing his usual 'perfect hindsight' analysis that the team that won must have made all the right decisions and the team that didn't must have made all the wrong ones.
soneil
11-12-2010
We don't see everything. They showed more of the negotiation on You're Fired and it seemed to imply that he was negotiating quite knowingly.

The agency would typically want 35% of the tickets they sold; he got them to take a punt on 20% of the total sales which, in the end, if the agency was responsible for more of the sales, brought them down 15% on their commission.

Neither team seemed to sell much (for instance, @ £25 per ticket, Liz only sold maybe 20 tickets). The majority of the winning team's sales must've come from the agency.

Joanna actually nearly mucked it all up when she went back and tried to re-negotiate - her arrogantly underestimating the sales potential of the agency compared to her own.

It's always a numbers game. Chris properly negotiated with them and got a good deal. The team would've had to outsell the agency by a huge margin for that to be a bad deal. You just fell for the edit.
miaviv
11-12-2010
at first he said it was a bad idea and then said it was shrewd, funny how he changed his tune when he knew the team had won despite this daft decision
thenetworkbabe
12-12-2010
Originally Posted by miaviv:
“at first he said it was a bad idea and then said it was shrewd, funny how he changed his tune when he knew the team had won despite this daft decision”

And if he knew the answer he knew it without doing the sums and he knew it when his own team and the travel agency people thought it was a mistake. Whatsmore, if he knew it, even with time overnight he still couldn't explain to Joanna and convince her why it was such a good move. He couldn't even convince her it wasn't the wrong move.
brangdon
12-12-2010
Originally Posted by miaviv:
“at first he said it was a bad idea”

No, he says it was "adventurous". He never said it was bad.

Quote:
“and then said it was shrewd, funny how he changed his tune when he knew the team had won despite this daft decision”

I'd be utterly astonished if he ever went into that meeting not knowing which team had won.

The reason he was non-committal at first was to sound out the other team members. In particular, he was giving Joanna enough rope to hang herself with. She was committed anyway, since she had tried to renegotiate the deal, but he wanted her to come out and say she still thought it was a mistake. Her failure to understand why her team won undermined her triumph as PM.

He had to have that conversation before the result was announced, because the winning team then disappears to go on their treat and he doesn't get another chance to grill them. Plus it makes good TV.
Jo09
12-12-2010
There's no evidence that it was a shrewd move that we saw. There was no footage of Chris trying to disuade Jo from re-negotiating his "shrewd" deal. No projected sales numbers that would justify his move. Would any other company copy this? Hmmmm. I think he got lucky that's all.
brangdon
12-12-2010
Originally Posted by thenetworkbabe:
“And if he knew the answer he knew it without doing the sums”

He would have done the sums.

Quote:
“and he knew it when his own team”

Do you mean Nick and Karren? What makes you say that? Or do you mean Joanna and Jamie?

Quote:
“and the travel agency people thought it was a mistake.”

The travel agency people were surprised because it was unusual and generous. They knew Stuart had made such a bad offer that Chris didn't have to do much to beat it.

It's true it was more generous than it needed to be, but Chris couldn't have known that because he didn't know what offer Stuart had made. Stuart could have understood the issue and made a very generous offer.

Quote:
“Whatsmore, if he knew it, even with time overnight he still couldn't explain to Joanna and convince her why it was such a good move. He couldn't even convince her it wasn't the wrong move.”

I suspect he did explain, but it was cut for being too technical.
dave2233
12-12-2010
Originally Posted by The Mentalist:
“It wasn't shrewd, it was a big mistake that he happened to get away with. Yes, they still won the task in the end, but by giving a share of all revenues, they gave away far more profit than they needed to, and they removed any incentive for the ticket agency to actually sell any tickets. It's basic business sense.

The reason they won was because the other team did so badly, not because it was a shrewd move. Chris made a big mistake this week, and he's very lucky not to have been fired for it.

Alan Sugar can't really think that was "shrewd", can he?”

and how do you know this ??? ,
we don't have the numbers, so how can you say it was shrewd or not shrewd, we simply don't know.
Jepson
12-12-2010
Originally Posted by brangdon:
“She was committed anyway, since she had tried to renegotiate the deal, but he wanted her to come out and say she still thought it was a mistake. Her failure to understand why her team won undermined her triumph as PM.”

Her team almost certainly won because Chris go the agency deal.

It didn't win because of the 20% v 35% detail.

What makes you think she wasn't aware of the part the agency played in their win?

Theres no reason why she has to applaud the unnecessarily generous terms just because she appreciated the deal in general.

What is the evidence that she didn't understand?
thenetworkbabe
12-12-2010
Originally Posted by brangdon:
“He would have done the sums.

Do you mean Nick and Karren? What makes you say that? Or do you mean Joanna and Jamie?

The travel agency people were surprised because it was unusual and generous. They knew Stuart had made such a bad offer that Chris didn't have to do much to beat it.

It's true it was more generous than it needed to be, but Chris couldn't have known that because he didn't know what offer Stuart had made. Stuart could have understood the issue and made a very generous offer.

I suspect he did explain, but it was cut for being too technical.”

There's no sign of him doing the sums in what looks like a continous conversation and no evidence he can do the sums. There is implicit evidence from what everyone says he just said the wrong thing.He seemingly never interrupts the conversations about him making a mistake to even say I know what I am doing

There's no evidence he could explain the deal's benefit and Joanna still trying to renegotiate it suggests he couldn't convince her. If the maths is as clear cut as some reckon it is, she ought to be easily convinced about a low risk, high probablity gain. Its explicable in terms of probabilities or by putting realistic figures in and telling her the outcomes. Its seemingly never explained to Joanna either way. She isn't convinced. The team are still not convinced by the boardroom. That means either he couldn't explain, or she can't even follow the conclusion let alone the maths and he can't even convince her to have confidence in him.

I think the travel agency people are surprised because it looks such a bad offer . Either they don't understand the maths either, or they know they wont sell enough to reach a point where its not a bad offer for them, or they know they will just stop selling his tour when they stop getting as much as they would by sending people on some other tour.

Agree getting the contract probably is key but that just makes it a dumb task. If it all depends on negotiating an, either you or them, deal when you know nothing about the supplier, the market or prices and the maths is obscure and beyond most people, its gping to be luck or who has the best statistician who wins.
Jepson
12-12-2010
Originally Posted by thenetworkbabe:
“ If the maths is as clear cut as some reckon it is, she ought to be easily convinced about a low risk, high probablity gain.”

The maths is clear cut in hindsight when you have all the figures.

At the point that Chris was negotiating it is a problem with four variables: Your sales, the other team's sales, the agency's sales and the percentage the agency is taking (and of what they are taking a percentage).

Moving from the 'industry standard' 35% of agency sales to 20% of all sales would change the nature of the risk but the direction in which it changed would be dependent on an unknown composite variable: the proportion of sales generated by the agency.

As that proportion rose the 20% deal would have got better. As it fell it would have got worse.

A compounding complication (and one which Brangdon pointed out earlier) is that the agency would have less incentive to sell your tickets as they would be making 35% of all they sold of a rivals and only 20% of what they sold for you. This was what made me think, whilst watching the programme, that Chris had blown it - an opinion that was reinforced when they reported that they hadn't sold a single ticket for the 3:00pm tour.
thenetworkbabe
12-12-2010
Originally Posted by Jepson:
“The maths is clear cut in hindsight when you have all the figures.

At the point that Chris was negotiating it is a problem with four variables: Your sales, the other team's sales, the agency's sales and the percentage the agency is taking (and of what they are taking a percentage).

Moving from the 'industry standard' 35% of agency sales to 20% of all sales would change the nature of the risk but the direction in which it changed would be dependent on an unknown composite variable: the proportion of sales generated by the agency.

As that proportion rose the 20% deal would have got better. As it fell it would have got worse.

A compounding complication (and one which Brangdon pointed out earlier) is that the agency would have less incentive to sell your tickets as they would be making 35% of all they sold of a rivals and only 20% of what they sold for you. This was what made me think, whilst watching the programme, that Chris had blown it - an opinion that was reinforced when they reported that they hadn't sold a single ticket for the 3:00pm tour.”

Indeed, so you have to allow in the calculation that at some point when they make less than 35% the agency will start redirecting all their customers to some other tour that does pay 35% while continuing to take 20% on your own sales.

Thats another complication in the negotiation. If its only clear to us with hindsight and Chris doesn't do the maths, isn't it looking far too complicated to calculate at that meeting - and what would a gut instinct even be based on?

Alternatively, if the task hinges on getting the contract, does Chris getting that point make him shrewd if he comes up with a mistake/or risky offer to secure it? Or is he shrewd when others reached the same conclusion that they needed the contarct while he negotiated the deal?
brangdon
13-12-2010
Originally Posted by thenetworkbabe:
“There's no sign of him doing the sums in what looks like a continous conversation and no evidence he can do the sums.”

It sounds like by "he" you mean Chris. I had thought we were talking about Lord Sugar. If you read the final paragraph of #2, about Sugar's "perfect hindsight", then read #4, my #6 and #8 will make more sense. Oh, and the thread title contributes, too.
Jepson
13-12-2010
Originally Posted by brangdon:
“It sounds like by "he" you mean Chris. I had thought we were talking about Lord Sugar”

Yes we are but it's necessary to work out if there is any chance that Chris was being shrewd before you can applaud or criticise Sugar for thinking he was.

I think most people agree that he got the 'we need the deal' part exactly right.

The 20% straight off the top part is a lot more contentious.

With hindsight it worked but if both teams had sold a lot more by their own efforts it could have been the cause of his team losing.

Without knowing if he had any clear insights into the amount/proportion of tickets the agency were likely to sell it's impossible to say whether he was shrewd or lucky on this aspect of the deal.
brangdon
13-12-2010
Originally Posted by Jepson:
“Yes we are but it's necessary to work out if there is any chance that Chris was being shrewd before you can applaud or criticise Sugar for thinking he was.”

The deal could be shrewd even if Chris wasn't.

Indeed, I think Lord Sugar is quite capable of praising the deal, while understanding that Chris got it through luck. Especially when using it as a stick with which to beat other candidates. It's only to Stuart he calls it shrewd (and compared to Stuart's negotiation it was).

Even to Stuart, he only says that once. I wonder if we are attaching too much weight to what was just a bit of hyperbole. Most of Lord Sugar praise for it is less fulsome: "adventurous" and "innovative" and "a roll of the dice that paid off".

Quote:
“Without knowing if he had any clear insights into the amount/proportion of tickets the agency were likely to sell it's impossible to say whether he was shrewd or lucky on this aspect of the deal.”

From what Chris said, he did expect the agency to sell a high proportion. And it doesn't have to be that high for the deal to be good.

What bothers me is that I don't think he ever says what for me is the key point: that it's important to deny the agency to the other team. Not even in the boardroom when he's had time to think about it. So I don't want to give Chris a lot of credit.

My assessment of Chris, Lord Sugar's assessment of Chris, and Lord Sugar's assessment of the deal, are three separate things.
RMorgan
13-12-2010
It could have just been done for dramatic effect but you would think that if the Agency had made more for them than 20% of the other sales then they wouldn't have been handing over a wad of cash to the agency at the end, instead they would have been collecting an amount from the agency which would have been reduced by whatever 20% of all sales was.

Doesn't make sense how they keep holding it up as a shrewd move that won them the task.
Jepson
13-12-2010
Originally Posted by brangdon:
“What bothers me is that I don't think he ever says what for me is the key point: that it's important to deny the agency to the other team. Not even in the boardroom when he's had time to think about it. So I don't want to give Chris a lot of credit.”

I thought he did. I can definitely remember it. Unfortunately, that doesn't mean it happened.

I'll give it another look if I get the chance. I've only been giving him any credit because I thought he was adamant that it was important to deny the other team the agency deal.
notary
13-12-2010
Has anyone worked out the break even point. When no money changes hands.
20%(a+b)=a I think.
brangdon
13-12-2010
Originally Posted by Jepson:
“What makes you think she wasn't aware of the part the agency played in their win?

Theres no reason why she has to applaud the unnecessarily generous terms just because she appreciated the deal in general.”

You're right. I had thought Lord Sugar had given her a hard time over it, but actually he only gave her a hard time about trying to renege on the deal.
Shappy
13-12-2010
Originally Posted by brangdon:
“He had to have that conversation before the result was announced, because the winning team then disappears to go on their treat and he doesn't get another chance to grill them. Plus it makes good TV.”

I always thing this type of grilling pre-winner announcement gives away which team has won.

It was obvious that Chris's deal was the make or break factor in their team, and ordinarily it would have formed the crux of the discussion about who deserved to be fired had theirs been the losing team. The fact that the Lord spend a bit of time mentioning it and pulling Joanna up on it before he announced the winning team, hinted that there would not be another opportunity for the Lord to scold Joanna about it i.e. her team had won.
thenetworkbabe
13-12-2010
Originally Posted by brangdon:
“The deal could be shrewd even if Chris wasn't.

Indeed, I think Lord Sugar is quite capable of praising the deal, while understanding that Chris got it through luck. Especially when using it as a stick with which to beat other candidates. It's only to Stuart he calls it shrewd (and compared to Stuart's negotiation it was).

Even to Stuart, he only says that once. I wonder if we are attaching too much weight to what was just a bit of hyperbole. Most of Lord Sugar praise for it is less fulsome: "adventurous" and "innovative" and "a roll of the dice that paid off".

From what Chris said, he did expect the agency to sell a high proportion. And it doesn't have to be that high for the deal to be good.

What bothers me is that I don't think he ever says what for me is the key point: that it's important to deny the agency to the other team. Not even in the boardroom when he's had time to think about it. So I don't want to give Chris a lot of credit.

My assessment of Chris, Lord Sugar's assessment of Chris, and Lord Sugar's assessment of the deal, are three separate things.”

But, if you watched the final 5 show, the shrewdness of the deal by Chris has now entered into his CV (or at least the CV drawn up by whoever produced that show, or believes what it says) It may end up justifying a win. The point was made that he lacked imagination early on but that's offset by the argument that his "shrewd" deal shows he has it by the end. The argument adds a big plus to Chris, takes away a big negative from him and leaves him with one of the only sparks of brilliance (the spark?) seen to date.

It also gives Lord Sugar a reason to get rid of Liz if he needs to rationalise his biases. If there was a moment of brilliance he can make the point to himself that it wasn't, supposedly smart , Liz with the business degree having it - if there was none, he ends up complaining she hasn't spotted what no one else spotted either.
thenetworkbabe
13-12-2010
Originally Posted by notary:
“Has anyone worked out the break even point. When no money changes hands.
20%(a+b)=a I think.”

That seems to be the view.

The lurking problem is that if the Travel Agency thought as Lord sugar seems to at times, they could send every customer on another tour and pocket the higher rate 35% for that, send no one on Joanna's tour and then demand 20% of whatever the team sold....??
brangdon
13-12-2010
Originally Posted by thenetworkbabe:
“If there was a moment of brilliance he can make the point to himself that it wasn't, supposedly smart , Liz with the business degree having it - if there was none, he ends up complaining she hasn't spotted what no one else spotted either.”

I don't think he needs it. Even if Chris's deal was so bad he was better off without the agency at all, that doesn't justify Stuart's deal.
thenetworkbabe
13-12-2010
Originally Posted by RMorgan:
“It could have just been done for dramatic effect but you would think that if the Agency had made more for them than 20% of the other sales then they wouldn't have been handing over a wad of cash to the agency at the end, instead they would have been collecting an amount from the agency which would have been reduced by whatever 20% of all sales was.

Doesn't make sense how they keep holding it up as a shrewd move that won them the task.”

I suppose the team might have taken both wads of cash from themselves and the agents, added them, and then given 20% of the total back - but it does look odd the way they filmed it. The wad would have looked smaller on air though if the agency had already taken their cut from what they sold before passing it on. It might suggest that the negotiation cost a lot on their own sales or it may suggest that the show is set up in detail to get the most dramatic effect.

If its set up for dramatic effect , its in effect set up to support the Chris did well ending. The wad suggests the evidence for Chris doing badly, and, having lured the audience into thinking that, it sets up the conclusion - which seems to be that, actually, he did very well.
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