Rebirth of the Industrial Tycoon

The promotion of Puppy Electric has been going on for two months, and finally some colleagues who produce microwave ovens realize that Puppy Electric is fighting a price war!

There are many ways to deal with price wars, such as product differentiation strategy, product replacement pricing, multi-brand sniping, etc. In reality, there are also many textbook-like success stories.

However, for Chinese companies in the 1990s, they would not use all of the above methods. The only way for them to deal with price wars was to simply cut prices!

You drop 100 yuan, I will drop 200 yuan, then you drop 300 yuan, I will drop 400 yuan, there are not so many routines, simple and direct, it is like a vicious circle, the product quickly Will kill the price of cabbage.

Sometimes, when the price war gets red-eyed, it even sells at a loss, and then whoever can't hold it will naturally be eliminated from the market.

This kind of cruel price war is very similar to the money-burning subsidies provided by the Internet industry in later generations. Hundreds of millions of funds are smashed at every turn, and they are burned out in a few days.

However, the bosses of Internet companies can expand rapidly in a short period of time by spending a lot of money, and then fool the rich bosses to invest, and finally go public to make money from investors.

Any technology company, boasting that it has hundreds of millions of users, makes a profit of tens of millions in the account, and then goes public on Nasdaq, with a market value of tens of billions of dollars in minutes, early investors can cash out and run Way to go.

In the manufacturing industry, it is impossible to play like this. The core of the manufacturing industry is the product. If you want to get financing, you need not only a good product, but also the recognition of the market, not the so-called service and first concept.

Therefore, in the price war in the manufacturing industry, the goal is not to raise money and make money by listing, but it is really burning money, and the fight is a life-and-death struggle!

...

In Jufeng Microwave Oven Factory, Zhang Zhijie called the leaders of the factory for a meeting.

"In the past two months, the sales of our microwave ovens have dropped significantly. Now the reason has been found, that is, they thought that the price of the microwave ovens of Puppy Electric had dropped. The price of the product has been reduced by 500 yuan, which is completely a price war!"

Zhang Zhijie told everyone about the puppy electrical lottery routine.

Then Zhang Zhijie continued: "Since the puppy electric appliance has already started a price war, then we can't sit still and let the price of our microwave ovens be reduced!"

"Director, are we going to do a lottery to get coupons?" Someone asked.

"Why do you go to the trouble of directly reducing the price, a microwave oven will be reduced by 500 yuan!" Zhang Zhijie said.

"Factory manager, if we drop this much, our profits will also be greatly reduced." Another person said.

Zhang Zhijie snorted coldly: "Reduced profits are better than the loss of a factory! Even if we drop 500 yuan, we still have to make money, but it's just a little less, but if we don't cut prices, we'll be dead. !"

...

Those small microwave oven assembly plants don't have any marketing directors either,

They also won't use the road such as lottery coupons. Their price war is unpretentious, that is, a very simple price reduction.

At that time, the profit of producing microwave ovens was still very considerable. Even if the price was reduced by 500 yuan, these microwave oven assembly plants could already maintain a certain profit.

However, Puppy Electric's counterattack was also straightforward, and Zhong Yemao was no longer engaged in any lottery routines. On the basis of the original price reduction of 500 yuan, the price of all Puppy microwave ovens was reduced by 300 yuan.

This is equivalent to a price reduction of 800 yuan for a microwave oven, which basically achieved Li Weidong's goal of reducing the price by 30%.

Many microwave oven companies followed suit immediately.

It's just that for those assembly plants without core technology, the price of each microwave oven is reduced by 800 yuan, and there is no profit margin.

The components of the assembly plant are all purchased from other manufacturers, and the core components also need to be imported. For a magnetron alone, the imported one is three to five times more expensive than the domestic one.

However, at that time, there were no enterprises specializing in the production of magnetrons in China. Those who mastered the production technology of magnetrons were also enterprises that produced microwave ovens. They used magnetrons for their own use, where would they sell them to other manufacturers!

When the price war started, there were two options for these assembly plants. One was to keep going, and the other was to transform to produce other products as soon as possible.

...

At the wine table, in front of Zhang Zhijie sat several people who looked like bosses. Like Zhang Zhijie, they were the heads of microwave oven manufacturers.

In the past, these people were rivals with each other, and they definitely couldn't get together, but today is different, they have a common enemy, and that is puppy appliances, which allows them to sit together.

In the face of the price war launched by Puppy Electric, these companies have already begun to be overwhelmed. Now they are not making any money selling microwave ovens, and they may even lose money.

So Zhang Zhijie gathered his colleagues to discuss countermeasures.

"I can't hold it anymore. It seems that this microwave oven business can't be done anymore. I have already planned to switch production to produce that kind of small tape recorder. I heard that the market for this thing is quite good. If a middle school student learns a foreign language , get one!" One of them said in frustration.

Another person persuaded: "Old Zhao, don't say anything depressing! Today, everyone is gathered together, isn't it just to discuss countermeasures, maybe we will discuss for a while, and we will have a solution, then you don't have to change production. !"

The third person next to him said with some schadenfreude: "Old Huang, I advise you to change production early, it can be considered as a way out! Don't stick to the microwave oven. The quality of your microwave oven is not very good, even if you are allowed to continue. Production, you can't make money!"

"You bald man, what do you mean by saying this? Even if you don't make microwave ovens, you won't be able to eat meat in this market, there are more products than you!" Lao Huang immediately retorted.

As competitors, these two have obviously been grumbling for a long time. Even if they get together to discuss countermeasures, they still can't help but quarrel.

Zhang Zhijie hurriedly became a peacemaker and persuaded: "You two, it's time for us, let's stop fighting, otherwise the whole microwave oven market will really have no place for us!"

After stopping the quarrel between the two, everyone finally began to discuss countermeasures calmly.

"At this price, our microwave ovens are sold at a loss of one! Big entrepreneurs have a solid foundation, and they can afford to lose a little bit, but how can a small factory like ours have so much capital to consume for a large enterprise!" Lao Zhao said. said.

"Yeah, the retail price of microwave ovens is about to drop to about 1,500 yuan. At this price, everyone is making money at a loss. That puppy electric appliance is playing like this, it's just hurting people!"

"If you want me to tell you, let Puppy Electric continue to make money at a loss. Anyway, sell one and lose one. I see how long Puppy Electric can last! There are one billion people in China, and the market is so big, if he has the ability, he will If you continue to sell like this, you won't lose him!" Baldy Wang said arrogantly.

The old Huang next to him curled his lips in disdain: "Baldy Wang, what do you know! The microwave oven magnetron of Puppy Electric is made by themselves, and it is much cheaper than the one we imported from Japan! Their production cost must be less than We are low! If you buy one and lose one, people may still make money!"

"According to what you said, what else should we discuss and surrender directly, anyway, we can't win the price war!" Wang Bald said.

The peace of mind that had been agreed was instantly gone. Seeing that the two were about to quarrel again, Zhang Zhijie had to change the subject:

"It's definitely not possible to continue the price war. We don't have as much capital as others, and the production cost is still higher than others. If we fight the price war, we will lose. So we have to think of other ways!"

"Is there any other way, Puppy Electric has made it clear that they are fighting a price war, and they want to seize the market at all costs. We can't let him lower the price!" Someone said.

"You really reminded me when you said that. Otherwise, we went to Qinghe's price department to report Puppy Electric, saying that he cut prices without authorization and disrupted the microwave oven market!"

"Does this trick work? Puppy Electrical Appliances is also a big company. It has to pay a lot of taxes to Qinghe every year! This God of Wealth, they have to be carefully maintained in Qinghe City. The local price department may not be able to manage it, right?"

Zhang Zhijie's eyes lit up, he said: "Doggy Electric is a big taxpayer in Qinghe, and the local government will indeed maintain it. But we are in our own place, who doesn't pay taxes according to law?

The price department of our own place has to protect us, right? So I think, you can seek help from your own local price department! I don't think there's a place that wants to see businesses in its own jurisdiction fail, right? "

"But my price department, at most, manages one-third of one mu of land, but it can't manage Qinghe!" Lao Huang said.

"Have you ever heard the saying that more people are more powerful!" Zhang Zhijie paused, and then continued; "After we went back, we reported to the price departments of our respective places, saying that Puppy Electric disrupted the market and made the price departments Report to superiors.

Then we contact other counterparts, and also reflect to their price department. The so-called three people become tigers, if the microwave oven companies in the country say that the puppy electrical appliances disturb the market, this will definitely attract the attention of the leaders above, and it will be effective at that time.”

"Good idea! After I go back, I will contact my colleagues in the next few cities immediately!"

"That's right, let's all act together, as long as we unite, we won't be afraid of the puppy's electrical equipment hurting people!"

...

In this era, the State Planning Commission is in charge of national economic planning and market macro-management.

This "Planning Commission" is not a "Disciplinary Commission" or a Family Planning Commission, but the National Development Planning Commission, which is the predecessor of the National Development and Reform Commission in the future.

Reports about Puppy Electric disrupting the market were quickly reported to the State Planning Commission by local governments.

At the beginning, the Planning Commission didn't care. After all, the price reduction of commodities is completely commercial behavior.

Moreover, microwave ovens are not important strategic materials such as grain and oil. Even if the price is reduced, it will not affect national security and future development strategies, and there is no need for the State Planning Commission to intervene.

However, when more and more similar reports came up, the leaders of the Planning Commission also began to pay attention to this matter.

As Zhang Zhijie said, three people become tigers, and one thing is reported too much, and it will always attract the attention of the leaders.

So the Planning Commission immediately sent people to the market to investigate the sales of microwave ovens.

The middle-aged clerk walked to the door. Seeing that the door was not closed, he knocked on the door and walked in directly.

"Director Lin, I have already gone to the market to investigate, and it is true that the price of microwave ovens has dropped. In the past three months, the overall price of domestic microwave ovens has indeed dropped by 800 yuan, while the price of imported microwave ovens has not changed! Take the lead. It is indeed the puppy microwave oven that reduced the price." The middle-aged clerk said.

"800 yuan, which is so much lower? With such a large price reduction space, it seems that the profit of producing microwave ovens was very large before!" Director Lin nodded.

The middle-aged clerk continued: "Director Lin, I have also researched the sales of microwave ovens, and the best-selling microwave ovens are the puppy's microwave ovens. The puppy's electrical appliances have indeed benefited the most from this price reduction.

And some agents revealed that this microwave oven price war is not over, and next year, the price of Puppy Electric will continue to drop! It is inevitable that the price of microwave ovens will drop to less than 1,500 yuan. "

Director Lin did not nod, but frowned and thought.

The middle-aged clerk asked tentatively: "Leader, since there are so many voices in the local area saying that the price of puppy appliances has been cut indiscriminately, it is disrupting the microwave oven market, should we take care of it?"

"I'm afraid it's not easy to manage!" Director Lin sighed, and then said: "Li Weidong, the director of Puppies Electric, is a relatively well-known young entrepreneur in China, but he has another identity, a leading think tank. Members, they taught me a lesson before!"

"I've heard of that Li Weidong. He's younger than me, isn't he? He can actually enter the think tank?" The middle-aged clerk asked with an incredible look.

"If there's nothing wrong, how could it be possible to start from scratch and create such a big company!" Director Lin continued; "Li Weidong has a special status, so let's be more cautious about this matter! Well, let me know and I'll go there in person. Go to Li Weidong to find out the specific situation."

...

Li Weidong is also collecting first-hand market conditions.

Since the price war started, foreign brands such as Panasonic have not been affected, and there has been no new news about the construction of LG factories. On the contrary, a large number of domestic microwave oven manufacturers are the first to be unable to hold on.

This is also completely within Li Weidong's expectations. Whether it is a price war or an industrial upgrade, the first to fall must be those small manufacturers that lack core technology.

In Li Weidong's memory, the price war of microwave ovens in history was also a reshuffle of the microwave oven industry. When the price of microwave ovens fell below 1,000 yuan, 90% of the domestic microwave oven enterprises were drained.

For China at that time, more than 1,300 microwave oven companies were indeed too many.

The phone rang, interrupting Li Weidong's thoughts. Li Weidong picked up the phone, said "OK", stood up immediately, and walked out the door.

Leaders from the State Planning Commission came to inspect. They had already departed from the Municipal Party Committee and would arrive at the Puppy Electric Factory within 20 minutes. Li Weidong was going to meet him at the door.

A welcome banner has been posted at the gate of the Puppy Electric Factory.

A moment later, a row of cars drove over, two of them were Audis, and the rest were Santana.

Li Weidong recognized that one of the Audis with the 00001 license plate was a special car of Zhang Jiagang, a leader.

Seeing Zhang Jiagang walking out of the car with a man, Li Weidong thought that this man should be the leader of the Planning Commission.

"Director Li, let me introduce you, this is Director Lin of the State Planning Commission." Zhang Jiagang introduced.

"Director Lin, hello. You are welcome to come and guide the work." Li Weidong hurriedly stepped forward.

"Director Li, we meet again!" Director Lin said with a smile.

Li Weidong was stunned for a moment, then began to think quickly, where he had seen Director Lin.

Zhang Jiagang next to him asked curiously, "Are Director Yuan Lin and Director Li old acquaintances?"

Director Lin replied, "Director Li may not remember it, but I am deeply impressed by the class that Director Li taught!"

Li Weidong instantly understood that when he went to the capital to give lectures to leaders of various ministries, Director Lin must have been there, so he knew himself.

Zhang Jiagang was a little puzzled. He thought to himself that Li Weidong's junior high school culture, could it be that he was a teacher?

Li Weidong learned that Director Lin knew him, but his heart was much more settled. After all, the identity of a think tank is itself a layer of protection.

Li Weidong invited several leaders into the reception room. He first exchanged a few words, and then briefly reported the situation of the Puppy Electric Factory.

These are all normal procedures. After the procedure is over, Director Lin explained his purpose.

"Director Li, I'm here this time because the price of puppy microwave ovens has been greatly reduced recently!"

Director Lin paused, and then said, "Our Planning Commission has recently received some responses, saying that the price reduction of Puppy Electric has disrupted the microwave oven market!"

Without waiting for Li Weidong's response, Zhang Jiagang said first, "Director Lin, the price reduction of commodities is completely a commercial act, how can it be regarded as disrupting the market!"

Puppy Electric is a big company in Qinghe City. Zhang Jiagang must first maintain a wave of mindless maintenance, at least his attitude must be revealed first.

After Zhang Jiagang expressed his attitude, Li Weidong said, "Director Lin, this time our puppy appliances are indeed fighting a price war! I will not hide that this price war is indeed aimed at our peers in the industry, including Domestic microwave oven companies also include foreign microwave oven brands.

The purpose of our puppy electrical appliances is to win more than 70% of the domestic microwave oven market! If you want to say that it is disrupting the market, it may be a relatively light accusation. What I want is to monopolize the domestic microwave oven market to a certain extent! "

The responsibility of the State Planning Commission is to plan the macro-management of the national economy and the market, and anti-monopoly is also under its jurisdiction. Director Lin did not expect Li Weidong to be so straightforward. In front of the leader of the State Planning Commission, he bluntly said that he wanted to monopolize the market!

This means that he was recruited directly before the trial. For a while, Director Lin didn't know how to answer.

Li Weidong said, "Director Lin, there are actually some benefits to a price war. Especially at this time, I think launching a price war is good for the entire microwave oven industry."

If others said the same thing, Director Lin might sneer, but Li Weidong, as a member of the think tank, said this, Director Lin must listen carefully.

So Director Lin said, "I would like to hear the details!"

"Director Lin, speaking of price wars, you should still remember that in the late 1980s, there was a price war for color TVs in our country!"

Li Weidong paused, then continued: "The color TV price war in the late 1980s caused the entire color TV industry to undergo a major reshuffle, but it was also that price war that made our country's home appliance industry begin to establish norms. management system.

In the following years, the domestic home appliance industry began to develop rapidly. Now well-known brands such as Haier, Little Swan and Gree have emerged, which have been successfully exported to other countries, creating foreign exchange for the country.

This year, our country's home appliance exports should exceed 1.6 billion US dollars! If this happened five years ago, it would have been unthinkable! "

"Director Li, your puppy electric appliance is also one of them! You are also credited with the $1.6 billion." Director Lin praised.

"Compared with those big brands, there is still a big gap between our puppy appliances. However, what I did in this microwave oven price war is the same as the TV price war in the late 1980s!"

Li Weidong paused, then said, "I hope this price war will bring a complete reshuffle to the domestic microwave oven industry. After the big waves wash away the sand, our microwave ovens will also be exported to foreign countries to seize the market of foreigners. , earn foreigners' money!"