Chapter 303 Vicious Competition
Yanjing, Chinese Medicine Factory No. 3.
Factory director Huang Baogui sat behind his desk with a sullen face. The ashtray in front of him was filled with cigarette butts and he held a half-burned cigarette in his hand. Not only him, but Jiang Guoxun and Liu Xinhong beside him were also smoking. The three heavy smokers made the whole office filled with smoke, as if it was a fairyland on earth.
"Tell me, what should we do now?" Huang Baogui took a deep puff, extinguished the remaining cigarette butts directly in the ashtray, and asked.
"Director, I met with Lao Liu before I came here. The supply and marketing department doesn't have a good solution. There are too many similar products on the market now, and the prices of several factories have dropped again in the past few days. They are very low. If this continues, our sales problems will become more and more serious..."
Liu Xinhong said with a grim look that none of the three people present had expected that the market would undergo such earth-shaking changes in just a few months.
Previously, Factory 8 pioneered the warm cup packaging, which made the previously unsalable loquat paste and cough syrup hot-selling in the market, which immediately reversed the loss situation of Factory 8 and made Factory 8 earn a lot of money from this product.
Seeing that the originally dying Factory Eight had come back to life thanks to this product and was living a better and better life, the other factories naturally couldn't sit still.
Especially on the side of Factory 3, Huang Baogui has always aimed to surpass Factory 1 and Factory 2 over the years, and has been feeling resentful that Factory 3 is not as good as Factory 1 and Factory 2.
In Huang Baogui's opinion, if the foundation of Factory 3 was not inferior to that of Factory 1 and Factory 2, with his own abilities he would definitely be able to lead Factory 3 to become the leader in the industry instead of being suppressed by these two factories.
So when the warm cup packaging products of Factory No. 8 were selling well in the market, Huang Baogui was the first to see the business opportunity and made the decision to follow up immediately.
Huang Baogui is very confident about this. After all, Factory Three far exceeds Factory Eight in terms of scale and strength. If Factory Three can launch similar products at the fastest speed, then Factory Eight will not be able to compete with Factory Three at all. In this way, it will be Factory Three, not Factory Eight, that will dominate the market.
By that time, the desire to surpass Factory 1 and Factory 2 will no longer be a fantasy. With this product, Huang Baogui feels that he can definitely achieve this goal.
It is a pity that ideals are beautiful, but reality is cruel.
Huang Baogui saw this keenly, and other factories also saw this.
In order to compete for this market, all factories are eyeing this new product and are ready to find ways to rush into the market and get a piece of the pie before others.
At the beginning, Factory 3 still had an advantage. When it initially negotiated packaging with the local supplier in Yanjing, each factory had placed packaging orders. In addition, the warm cup packaging required mold making and production cycle, which took time.
However, Factory 3 was really lucky. At this time, they found out that Factory 8's packaging was purchased from Tianjin. Huang Baogui decisively asked the supply and marketing department to go to Tianjin to negotiate. Soon, Tianjin gave good news. It seemed that Factory 8 suddenly stopped the subsequent purchase orders for some reason, so the manufacturers in Tianjin had enough capacity to supply warm cup packaging to Factory 3 in the shortest time.
Huang Baogui was overjoyed when he heard the news. He directly instructed the Supply and Marketing Department over the phone to sign the contract immediately and arrange a vehicle to bring the packaging back as soon as possible.
In this way, the third factory produced similar products nearly half a month ahead of other manufacturers, and worked overtime to put them on the market as quickly as possible.
When the third factory put its products on the market, the eighth factory temporarily stopped production of the products due to insufficient raw material supply. Upon hearing the news, Huang Baogui laughed in the office. God is helping me! No wonder the purchase of warm cups from the eighth factory in Tianjin stopped, and the eighth factory did not continue to put the products on the market. After all the trouble, they were powerless to follow up!
Huang Baogui, who had worked as the factory director of the Third Factory for so many years, was no pushover. When he learned the news, he immediately ordered the entire factory to work overtime. The Supply and Marketing Department also took this opportunity to market their products at any cost and snatch away the original market channels of the Eighth Factory in one fell swoop.
In this way, Factory 3 quickly replaced Factory 8 and became the market leader. In just over a week, the products produced by Factory 3 sold better than those produced by Factory 8. Every day, when Huang Baogui saw customers lining up outside to order products and seeing truckloads of products being pulled out, and the entire factory was busy, his heart was as sweet as eating honey.
Unfortunately, such good days did not last long. Half a month later, similar products from Factory 1 and Factory 2 also began to be put on the market. The original situation of one dominant company instantly turned into a three-way competition.
Just when Huang Baogui was ready to use his first-mover advantage to compete with Factory One and Factory Two, it wasn't long before products from other factories came out. The market suddenly changed from a three-kingdoms situation to a warlord melee.
For a time, similar products were everywhere, and each factory showed off its own skills in the fierce competition in the market. In just over a month, some factories that followed up even took the initiative to cut prices in order to compete with Factory 1, Factory 2, and Factory 3, intending to use this method to gain market share.
Faced with this chaos, Huang Baogui responded calmly and immediately made two preparations. The first was to appropriately reduce prices to ensure the first move and market share. The second was to expand foreign markets and sell products to other places to make up for the loss of profits by increasing sales.
It has to be said that Huang Baogui's response was correct, so in the next two months the three factories barely managed to stabilize the situation. Although product profits fell sharply due to price cuts, with the expansion of foreign markets, production and sales soared, and the overall situation was maintained.
But Huang Baogui did not expect that what he could do could be done by others as well. The response measures of the third factory were also seen by others. Before Huang Baogui could catch his breath, other manufacturers followed up at the same time. The war spread directly from Yanjing and the surrounding areas of Yanjing to all parts of the country and intensified.
In the era of planned economy, products produced by state-owned enterprises and collective enterprises were distributed according to plans, which included not only the supply of raw materials but also sales. When the market was opened, the pure planned economy began to turn into a planned market economy, and the original order was directly broken, which brought about disorderly competition within the industry.
What Huang Baogui is facing now is this kind of disorderly competition. Manufacturers are fighting each other for a similar product. What's more terrible is that as the product is promoted to the national market, other factories in other places also begin to follow suit. For a time, a large number of similar products flooded the entire market. The originally popular steamed buns have become commonplace in a blink of an eye.
As time went by, due to the continuous decline in product profits and increasingly fierce competition, inventory backlogs were inevitable at the third factory.
In addition, the current market is different from when Factory Eight first invested in this type of product, because the product has begun to shift from a seller's market to a buyer's market, and there are more than a dozen brands of similar products on the market competing for it. Hospitals, pharmacies, etc., which serve as sales terminals, naturally will not adopt the method of paying first and getting the goods as when they cooperated with Factory Eight.
Nowadays, sales have long been changed to a consignment sales model, that is, delivering goods first and then settling the payment after the goods are sold. Moreover, this type of payment is nominally due in one month, but in actual operation it often takes two months or even more to get the payment back normally.
Even so, it is still unknown whether the money can actually be recovered, because the money can only be recovered if the products are sold. If the products are unsalable, not only will there be no recovery, but there will also be problems with returns.
In addition to Yanjing and surrounding areas, the Third Factory is now building sales channels in other provinces and cities. The total number of these sales channels is a huge number. In terms of the number of these sales channels, if each channel only ships and sells in the smallest batch, the Third Factory will need to provide an astonishing number of products.
If everything was a virtuous cycle, the three factories would not have to worry. But now it has become a vicious competition, which has caused the three factories to invest a huge amount of money in their products. With the continuous deterioration of the market and the fierce competition, the backlog of funds is also increasing, and even the three factories, which are large and powerful, cannot afford it.
"Director, this won't do." Jiang Guoxun looked serious and took over the conversation to remind him, "The financial pressure on the factory is too great now, and the payment from various places is so slow. If this problem cannot be solved in another month, we may not be able to maintain normal production."
"They are all a bunch of bastards!" Huang Baogui was extremely angry. He stood up and slammed the table, cursing, "These guys have ruined my good business. They turned a pot of meat into a pot of rotten porridge. What's worse is that the porridge is made of wild vegetables mixed with sand. How can I eat it?"
Huang Baogui was extremely angry. If it weren't for Factory One and Factory Two, as well as other factories that followed up and desperately competed with him for the market, and even resorted to stupid things like proactively lowering prices, which would kill a thousand enemies and hurt itself eight hundred, how could Factory Three be facing such a problem?
How nostalgic we are for the good old days when Factory 8 withdrew and Factory 3 took the opportunity to enter! How well did Factory 3's products sell in the market at that time? How high was the profit? But what about now? Everyone's products are not selling well, and the profit has dropped sharply. It's still better in Yanjing, but if it's in other markets, plus the freight and so on, the profit now is simply incomparable to what it was back then.
But Huang Baogui himself didn't think about it. Compared with other factories, Factory 3 was not much better. Because the first to produce and launch such products was not Factory 3 but Factory 8. Factory 3 was also a copycat trying to grab the market. The eldest brother didn't talk about the second brother. In essence, they were all the same.
Of course, people have double standards. They are lenient with themselves and strict with others. In other words, they are strict with others and lenient with themselves. Although Huang Baogui is the factory director, he is also an ordinary person, an ordinary person who eats grains and has seven emotions and six desires. Of course, this is also true.
In Huang Baogui's opinion, the current situation was caused by others and has nothing to do with him. He and the Third Factory are just victims. If it weren't for these guys messing around, the Third Factory would surely be living a happy life now. Where would these problems come from?
