Rebirth of Military Workers

Chapter 1129

“Everyone, have you already understood our plan? In a word, we only pay and divide the money, and don’t intervene in our daily operations…” Zheng Yucheng looked at Changhong’s executives and said with a grin.

Although no one refuted him, and although everyone had a calm face, Zheng Yucheng could tell from the eyes of these guys that they were cursing himself in their hearts.

Zheng Yucheng didn’t care at all.

Only by seizing market share and then developing better products and putting them into the market, the older generation of products will continue to reduce prices, and the color TV production units that have no technical strength and no financial support will be squeezed to death.

If you say you don’t intervene in the business, you really don’t intervene. Do you need to say this here?

Everyone is very concerned about Hongqi Machinery Factory’s 500 million yuan. The unit is owned by the country. As for whether they can let them in, the superior has the final say.

“The content of the plan is that we hope to complete it as soon as possible. Within one year, at least an annual output of one million units will be built; within three years, an annual output of five million units will be built…” Wang Guilin stated their requirements.

The 500 million fund is to expand production capacity and technology research and development.

“To build an annual output of 5 million units in three years? It’s simply impossible! The production lines have to be imported from abroad, and it is too late to design the production lines by ourselves…” Someone raised an objection.

This is simply an impossible task.

Up to now, Changhong’s production capacity is less than 500,000 units.

And some other large domestic factories have similar production capacity, and many small factories even only have an output of 30,000 to 50,000 units.

In three years, the production capacity will be expanded tenfold. Even with sufficient funds, it is impossible. The introduction of production lines abroad requires the approval of the Ministry of Industry and Information Technology, otherwise it will not be possible at all.

At present, there are more than 120 domestic color TV production lines and hundreds of manufacturers.

“Yes, Director Zheng, this is a bit difficult. The introduction of production lines requires not only national approval but also foreign exchange. At present, there are already many domestic production lines, and the country has begun to restrict the introduction of production lines…” Zhao Changhong looked at Zheng Yucheng, not saying that he knew about color TVs. Is the current state of the industry?

Really understand how such a problem arises.

Xie Kai stood up and said, “Don’t worry, we have no plans to introduce production lines from abroad. We invested in Changhong because Changhong, like us, is also part of the military industry system. As a military industry unit, even if it is converted to civilian products. Production should also lead the development of technology like military units… Therefore, the leaders of Hongqi Machinery Factory hope that in the future, whether it is technology research and development or production lines, they will do it themselves instead of importing them from abroad, unless it is difficult for some domestic companies to do it. The key core equipment that came out.”

There is no problem with Changhong’s current situation.

In the future, Changhong will not introduce technology and production lines from outside, otherwise, it will not dare to take the lead in launching a price war in 1996.

The prerequisite for launching a price war is to reduce costs and find profit growth points.

Changhong launched a price war and achieved rapid industrial concentration.

It was also because after the price war did not find a profit model, and eventually lost the position of the industry leader.

“The price war is a means to clean up the door to the color TV industry, but it is not our company’s future development goal. At present, more than 120 domestic production lines have been introduced, and more than a hundred production units. The current color TV market continues to be hot. The production lines introduced by many companies have insufficient production capacity because the supply of key components such as chips cannot keep up. Under such circumstances, there are more units planning to enter the industry. We must raise the industry’s entry barriers and have no money. If you don’t have the technical strength, you just need to do clothing or something, what kind of electronics industry do you play?” Zheng Yucheng said arrogantly.

He has learned a lot about the domestic color TV situation through Xie Kai.

I feel that for the benefit of those companies, they have not thought about what will happen in the future, and have never thought about what will happen after everyone has entered the industry.

Anyway, what will happen in the future has nothing to do with the current leader.

After the political achievements came out, the leaders were promoted and transferred away.

Therefore, in the future, more companies will see the profits of the color TV market and enter the industry.

By 1995, there were more than 200 domestic color TV manufacturers, and more companies were preparing to enter. The national design production capacity exceeded 44 million units, but the actual output was just over 20 million units and sales were less than 20 million units.

After the construction of production lines in some factories was completed, there was almost no production.

As a result, it will cause serious waste of production capacity and serious duplication of construction.(Read more @ wuxiax.com)

This is also the reason why Changhong launched a price war.

“Once the price war starts, it may be very tragic before the winner is divided… And in this process, where does our profit come from?” Ni Runfeng asked.

He has been pondering this issue ever since he knew that Zheng Yucheng and the others were going to engage in a price war.

The price war is definitely thankless.

Not to mention now, in the world of Xie Kai, Ni Runfeng has not found a profit point after the price war.

In this way, in the end, Changhong can only become a source of lessons learned by other peers.

“First, market grading. This requires us to invest heavily in future color TV research and development, always maintain technological leadership, make profits through high-end products, and squeeze the living space of our competitors with mid- and low-end products; second, establish two sets Mode, the domestic market maintains large-scale production to share costs, and vigorously explores foreign markets. Let alone profits, it is just export tax rebates. This is a large profit; third, the development of home appliances supporting products, such as audio and projector , And at the same time signed a strategic cooperation agreement with a related company like Kaiser Game Machine Company…”

There is also a VCD, Xie Kai did not say.

This requires complete preparation.

The threshold of VCD technology is not high, and Wan Yan was dragged to death by the copycat.

What’s more, the cooperation agreement with Changhong has not yet been reached, so one point must be guarded…

“Export? It’s easier said than done. The foreign color TV industry is much better than ours in terms of market and technology.” Some people think that these solutions proposed by Xie Kai simply do not work.

The number of exports is not enough, or even the cost of market development.

Foreign home appliance agents simply ignore Chinese products.

The country lacks foreign exchange and can export to earn foreign exchange, which is the dream and pursuit of all Chinese companies.

“In developed markets such as Europe and the United States, our products do not have a market. But what about regions such as Africa and Latin America?” Xie Kai asked.

The people in Changhong were stunned.

Africans can’t even afford to eat, have money to buy TV?

Xie Kai didn’t explain too much. If Chinese products want to enter the international market, they must first start with the less competitive African and Latin American markets.

“We have provided 500 million yuan of funds, 200 million yuan will be used to expand production capacity, and 300 million yuan will be used for technology research and development…” Wang Guilin also made it clear how to use the money they invested.

With 40% of Changhong’s shares, no one will agree if it is still unable to participate in the decision-making process.

Zheng Yucheng said before that they are not involved in daily operation and management.

It’s just that you don’t participate in daily management, but you definitely need to participate in major decisions.

“Only by continuously maintaining the technological lead can we win in the future.” Zheng Yucheng said.

Zhao Changhong watched Zheng Yucheng avoid talking about how to expand production to 5 million units in five years. They kept changing the subject and asked directly. If there is no plan, then it is estimated that the money will not be available, and they will have more. An uncle of management.

“Comrade Xie Kai, since you haven’t considered importing production lines from abroad, how can the production capacity be solved?” Zhao Changhong asked with an uncomfortable expression.

This matter cannot be resolved by them then.

“Merge the domestic bankrupt color TV manufacturers and let them become our foundries.” Xie Kai replied calmly.

Before that, they had already planned it.

“Once the price war is launched, those factories that have no technical advantages and introduce production lines just for assembly, do you think, how long can they be supported?” Xie Kai asked everyone insidiously. “Moreover, we can use the pre-order method. Isn’t the product insufficient? No problem, first pay a part of the deposit…”

It can be said that in order to fight this price war and integrate the home appliance industry, Xie Kai has taken out various marketing methods decades later.

This is also helpless.

The beginning of the price war is the beginning of the fight for market share.

“Currently, the supply of color TVs in the market is already in short supply. Everyone is increasing prices, but we are lowering them?” Chen Annan asked, “Isn’t this just letting other companies make money for nothing?”

At present, domestic color TV sets no longer need to be supplied by ticket.

However, the market is in short supply, and the market price of a 20-inch color TV has exceeded 3,000 yuan.

The cost is only over one thousand.

“If we lower the price, customers only need to wait a few months to buy it. Do they spend a few hundred more to buy immediately, or would they rather wait three to five months to have a few hundred left? Everyone, how about the salary? Changhong’s Ordinary employees, what is their monthly salary?” Xie Kai asked.

Everyone understood what Xie Kai meant.

The domestic color TV market is booming now because everyone does not have any decent belongings at home.

Ordinary employees have a salary of 60-100 a month. If you want to buy a color TV, you need at least two and a half years without food or drink.

“If in the beginning, how much would our price drop first?”

“20%!” Xie Kai said without hesitation.

Everyone was suddenly upset.

This has almost let out half of the profits.

“I know what everyone thinks. The price cuts are too much, and almost all the profits are reduced. But you can think about it in another way. If we haven’t produced yet, we have already sold out, and there will be no more inventory, and there will be market demand. Produce as much as you want…” Xie Kai knows that these people’s thinking models have not been baptized by the drastic changes in business models over the past few decades, and they are earnestly introducing the benefits.

Changhong first launched a price war, on the one hand for strategic purposes, to quickly concentrate the industry, and on the other hand for destocking.

Now once prices start to be cut, companies that want to enter must think twice.