The years of red flags

"What else can cause trouble?" Jiang Hua asked with a smile: "I have been keeping to myself these days. Apart from this article, I haven't done anything else out of the ordinary."

The leader angrily slapped the piece of paper on the table: "It was the chain reaction caused by your article that gave me such a big problem."

Jiang Hua took the paper and didn't read it. He smiled and said, "Is there anything else that can trouble you?"

After saying that, Jiang Hua carefully read the contents on the paper. It turned out to be an application report from the CEO of Changhong Group in Western Sichuan, requesting that the color TVs of Changhong Group be sold at a reduced price.

He read the first few lines hastily, but Jiang Hua didn't read it carefully at the back, but said jokingly: "What's so embarrassing about this? It's a perfectly normal decision. We have no obvious advantage in technology, we can only make a fuss about price." , the CEO of Changhong Group is very wise."

"Isn't it difficult? Wise?" Another leader said, dumbfounded: "Look at how much he asked for a price reduction. He is simply posing a difficult problem for us."

Jiang Hua took a closer look and found that Changhong Group requested a price reduction of 30.00%. To be honest, Jiang Hua didn't feel much about such a price reduction. Many things in later generations were reduced in price at diving prices. He didn't think there was anything inappropriate. The market It’s just a conventional means of marketing.

The leader said excitedly: "30.00%, is selling at this price disrupting the market?"

Jiang Hua shook his head: "How can this be called disrupting the market? What really disrupted the market was the moment foreign brands entered the market. The market was already in chaos at that time."

A middle-aged man said: "People compete in the market normally in accordance with laws and regulations."

"Then this kind of price reduction and price war is also normal market competition." Jiang Hua shrugged and said: "Price war is not an illegal operation internationally."

"If he cuts prices by 30.00%, what will other companies do? They can't all follow him and cut prices, right?"

Jiang Hua nodded: "Just lower the price with him. As we said, our products have no technical advantages compared with foreign products, so we can only make a fuss around price."

"30.00%, let's not talk about the impact on the market." The leader patted the table and said: "Do you know what the gross profit margin of Changhong color TV is? It's only 20.00%. Every time one is sold, it will lose 5.00%."

Another leader also said sadly: "There are 20 billion products piled in Changhong's warehouse. What is 5.00%? According to his calculation, a full [-] million will be lost. Isn't this a waste of state-owned assets?"

Jiang Hua smiled: "The leader's calculations are quite good, but the accounts are not settled clearly."

"I didn't understand it?" the leader said angrily: "Okay, since I didn't understand it, then you can figure it out for me, and you can explain it to me."

Jiang Hua nodded, took a sip of the already cold tea and said, "Then let me do the math for you and see if what I say makes sense."

"You just said that Changhong currently has 20 billion color TVs piled in the warehouse. If they are all sold at a reduced price, according to this discount situation, they will lose [-] million." The leader shook his head: "You don't need to repeat what I said, I still There is no old fool, I remember clearly what I said."

"But think about it again, if you don't reduce the price, these 20 billion products cannot be sold. The loss is not 20 million, but the loss of 20 billion. If you can't sell it, these [-] billion products don't count. .”

Jiang Hua's answer was well-founded and rhymed, and several leaders couldn't help but nod in agreement.

"This is an opportunity, a huge opportunity." Jiang Hua continued: "Use the 20 billion goods to reduce the price and bring the price down at once. You can not only occupy the market, but also clear the inventory. After getting the funds, you can use To expand production, it can also be used to develop new products.”

"You have to know that where these 20 billion goods are stored, apart from being useless, it will also increase logistics and warehousing costs, so I say he is a wise man."

At this time, Liu Anmin spoke. He sneered and said to Jiang Hua: "Boss Zhang has to admit that what you said is very reasonable, but have you realized one thing, that is, once Changhong Group takes over its color TV Once the price drops, it will be difficult to rise again in the future. Do we have to sell each unit at a loss of 5.00% in the future? Then what is the point of occupying the market?"

Jiang Hua said jokingly: "Oh, I didn't expect that I was wrong. You still have some real qualities."

Liu Anmin was both proud and angry. Jiang Hua smiled disdainfully: "First of all, color TVs are different from those Hermès and LV luxury goods. After the price drops by 30.00%, it means that the brand value has dropped. Color TVs are not included. 30.00% is considered a big reward at most. In the future, when color TVs with different technologies are launched, the price can be adjusted appropriately, as long as it is not outrageous."

"Secondly, I don't know if you have heard of supply chain management."

"Supply chain management?" Liu Anmin nodded: "I've heard of it, but I haven't studied it in depth."

The leader asked with interest: "What is supply chain management?"

"A scientific management method." Jiang Hua explained with a smile: "For a long time, we have defaulted to production costs as raw materials, worker wages, energy consumption, and machine depreciation. In fact, warehousing costs and logistics costs are also among the production costs. an item."

Jiang Hua gestured with his hand: "There is an iceberg theory in logistics management theory. What is logistics cost? It is like an iceberg floating on the sea. On the surface, we see that the iceberg is so big. In fact, under the water, we see The places you don’t reach are bigger.”

"You mean, as long as I manage the logistics costs, I can save a lot of money?"

Jiang Hua and Liu Anmin nodded at the same time. Jiang Hua continued: "So the theory of supply chain management was proposed. The ideal situation is that the factory does not have a warehouse at all. For example, the factory workers go to work every morning. Before. Raw materials were transported to the factory, workers produced them immediately, and the finished products were shipped out before getting off work, which directly reduced the storage cost, which is a lot of money."

"Sounds like a very good reason." The leader said with a smile: "Unfortunately, it requires the cooperation of all parties."

"That's right." Jiang Hua started to say: "So this is the most ideal situation. We can't do it at present. This requires big data analysis, Internet applications, etc., to achieve a certain level of technology." (This chapter over)