## Q72 key (Vendor Renewal Strategy)

1. Three-year Northline subscription cost is 3 times $3,600,000, or $10,800,000. Add $1,200,000 implementation, $400,000 dual run, $300,000 migration, and $250,000 disruption for an all-in BATNA of $12,950,000. Missed: switching friction is omitted or counted outside the comparison period.
2. Equivalent annual BATNA cost is $12,950,000 divided by three, approximately $4,316,667. Vireon's $15,000,000 proposal exceeds the BATNA by $2,050,000. Missed: Red Alder compares $5 million only to Northline's $3.6 million subscription and overstates leverage.
3. For otherwise equivalent terms, $12,950,000 total is the reservation price. Accepting more would cost more than executing the supplied alternative. Unpriced nonprice value may affect the final choice only if the client expressly values it, not through invented dollars. Missed: “switching is hard” becomes an unlimited premium.
4. Open at the objective status quo: $12,000,000 total for three years, or $4,000,000 annually, with the requested nonprice package. The target remains $12,000,000 because no supplied added value supports an incumbent premium; the reservation price is $12,950,000. Do not use the unsupported $10,000,000 margin guess. Missed: the opening, target, and ceiling are justified by imaginary vendor economics or left indistinguishable.
5. Demand 12-month termination assistance, stronger service credits, annual audit rights, no cross-customer training, and the year-three exit option. Do not assign invented dollar values. Missed: price is settled while material operating protections remain undefined.
6. Red Alder's supplied leverage is a ready 30-day Northline offer, 90-day migration within the 120-day runway, 6 percent revenue share, and case-study rights. Vireon's leverage is real switching cost and operational risk. Missed: either side is portrayed as having no alternative.
7. Launch Northline contracting and migration planning now, not on day 100, while negotiating with Vireon during the 30-day offer window. If Vireon will not reach at most $12.95 million with acceptable terms, sign Northline and execute the switch. Missed: delay destroys the BATNA and converts the reservation price into a bluff.