AI is Shifting Negotiating Power. Are You Still Negotiating Like You Own It?
For years, some organisations didn’t need to negotiate. They dictated terms.
Protected by scale, brand, and switching costs… what looked like 'commercial confidence' was often just power.
AI is dismantling that. Fast.
The Moats are Drying Up
AI isn’t just driving efficiency. It’s redistributing negotiating power.
- Traditional consulting models are challenged as AI compresses effort and who gets the upside is debated.
- Over $1T has been wiped from the Australian share market software valuations with uneven recoveries earlier this year
- AI models make it easy to quickly reverse engineer products and business or pricing models, reduce switching costs, or even create new capabilities
This isn’t theory. The power is visibly shifting.
From Dominance → Dependence
AI is:
- Lowering barriers to entry
- Increasing buyer sophistication
Your counterpart now has more options, more insight, and less tolerance for being pushed around.
If your power is declining… your strategy must change.
The Mistake Most Will Make
They’ll keep negotiating like they’re still dominant: pushing harder, giving less, relying on legacy leverage.
This won't protect margin… at best it attempts to slow any margin erosion.
But the real issue is that adopting this negotiating philosophy accelerates substitution.
The Shift That Matters
We aren’t saying 'be nicer'… nicer is not negotiation.
Scotwork’s negotiating strategy shifts organisations from arm wrestling over value… to creating value.
What Smart Negotiators Are Doing Now
They’re expanding what’s negotiable:
- Pricing models → challenging traditional heuristics
- Risk sharing → reallocating risk as power shifts
- Manufacturing flexibility → critical in a fast moving and uncertain world
- Transparency → exchange insight for trust
- Co-investment → build switching costs through relationships
Because while they still have power… they’re trading it for something more durable.
If you’re still negotiating like you own the market when the market thinks otherwise… You’re already behind.
Time to shift your negotiation strategy? Get in touch - we'd love to help!