Blue Star, based in Mumbai, was one of India’s leading multinational companies and manufacturers of air conditioning and refrigeration systems. It faced a key challenge to reduce the cost of compressors, a major component of air conditioners. Its supplier was Beijing Cooling Systems (BCS), one of the world's largest manufacturers of compressors. Blue Star’s need for cost reduction was pivotal to the negotiation, but BCS also had a position of strength as a seemingly-indispensable supplier of compressor technology. This created a complex scenario where the Blue Star team had to negotiate skillfully to achieve the desired cost reduction without compromising its crucial partnership with BCS.
Serum Institute of India (SII) was the world’s largest manufacturer of vaccines and had signed an agreement to produce the Oxford vaccine, a top five candidate. The chief executive officer, Adar Poonawala, had announced in late July 2020 that the government of India had agreed to buy two doses of the vaccine, at a price of US$13 per dose. In early August, two developments caused Adar to revisit SII's initial pricing decision. The first development was that Russia had announced it had developed a vaccine that was ready for mass distribution in early October—two months ahead of SII. The second development was that Johnson & Johnson had announced a price of US$10 per dose. The case outlines the decisions facing SII concerning the pricing strategy and pricing dynamics for their COVID-19 vaccine.