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Chapter 1349 – Giving the Leader a lesson
These few companies, which foreign companies formerly controlled, had developed well in China, especially their branding. With good branding, marketing, and sales channels, the product will be profitable even with poor quality. If the product’s quality is good, it will be more profitable.
Feng Yu would not have the opportunity to invest in these companies if those foreign companies did not exploit the loopholes. This is an opportunity for Tai Hua Consulting to invest in those companies.
Although the State a.s.sets shares of these companies will be lowered, the overall shares owned by the Chinese Government and Tai Hua Consulting will be over 67%.
This means both parties can work together to force those foreign companies out. Of course, they will not do it now as they need to consider their public image.
China had sued these foreign companies for taking over Chinese brands and kicking the State a.s.sets aside. They cannot chase those foreign companies out immediately after they regain control of the companies. This will affect foreign investors from investing in China.
Feng Yu had spent a lot on this lawsuit, but he did not suffer any loss. Most of the money is paid by those foreign companies. The joint venture companies’ a.s.sets had returned to China’s State a.s.sets and Feng Yu.
Those foreign companies did not lose the Chinese market completely and had taken some of the companies’ profits away. Or else, things will not end so easily.
……
“Manager Feng, you had done it. The county must learn from you when it comes to business.” Committee Member Bao laughed.
“Don’t mention it. We are doing what we can, and it’s not all my credit. Furthermore, the outcome might be different without the country’s support. Did this incident affect our country’s policy of attracting foreign investors?”
“There is some impact. Some investors changed their minds, but it’s fine. We cannot continue to please those investors to get them to invest. I had checked the data. Those companies were doing well in the past, and the foreign companies took over it slowly.” Committee Member Bao sighed.
“This is normal. We are not sure of those contract terms in the past, and the way we Chinese conduct business is different from them. We accept verbal agreements, but those foreigners prefer everything to be stated in the contracts. We are learning at that time, and we should just treat it as school fees. Now, we had learned our lesson and must not commit the same mistakes again.” Feng Yu replied.
“School fees? This is a good a.n.a.logy! We have been reflecting on our decisions at that time. But all these had happened, and we cannot turn back time. At least our economy is better now, and we realized the importance of branding after seeing you become successful.”
“Don’t be modest as this is the truth. We have started to realize the importance of our former national brands and want to rebuild their brand image. We have lots of popular products in the past. Still, we don’t know about brand management and protecting the technologies behind them. As a result, our compet.i.tors caught up and overtook us.”
“We finally understand the importance, and we will be supporting our local brands from now! Our brands will be known all over the world!”
Feng Yu laughed in his heart. You all have not even occupied the local market share, and you are thinking of the overseas markets? Although it’s possible, it will give up your advantages and compete in the areas you are weak in.
As China’s national brands, you all should consider the Chinese market first. You all might not need to kick those foreign brands out, but you should become the market leader first.
Feng Yu’s Wind and Rain Brand, Songjiang Brand, is the same. They had occupied most of the Chinese market before venturing overseas. After all, they are most familiar with the Chinese market most and have an advantage in marketing and sales.
This will increase the companies’ profits. The profits can be used to develop new products, marketing, and lower their compet.i.tors’ sales. In the long run, the gap between them and their compet.i.tors will be widened.
For example, Jianlibao. Why did they venture overseas? It was because they were unbeatable in the local market. Which overseas distributor is willing to sell your products if your products are not the best in China?
“Committee Member Bao, I feel we should let these brands establish a strong foothold in China first before venturing overseas. It’s not good to take such a big step.” Feng Yu is telling them not to be too ambitious.
Committee Member Bao nodded. “I understand. You are more experienced in business, and we will follow your suggestion. Which brand should rebuild first?”
“That will depend on which industry’s market leader is a foreign brand. For example, Songjiang Motors is the market leader for our automobile sector. Other automobile manufacturers have started to introduce new cars under their brand. Beidacang, China Food, etc., are the top agriculture brands in China and Asia. But our daily chemical products, apparel, sports brand, fast food, etc., are all owned by foreign brands. These foreign brands are more compet.i.tive and famous. It will take time to build up our local brands in these industries.”
“But you all can rebuild some old brands or develop new brands. With better marketing and sales channels, you all can quickly increase the market share. During the initial phase, you all can give up on making profits in exchange for the market share. With a bigger market share, the future profits will not be too low.”
Committee Member Bao nodded. “We need to do some research. But what if we are not compet.i.tive in that particular industry?”
Many companies are not successful overnight, and they might suffer losses if the outcome is not in their favor.
Feng Yu points to himself. “I can help if you all face any difficulties. If our technologies are too far behind our compet.i.tors, we can purchase more advanced technologies from overseas. If we lack development funds, I can provide them. Although our former closed-door policy had failed, we are still self-sufficient. We only need to be wary not to be too far behind our compet.i.tors.”
“Seems like rebuilding our national brands should be our country’s main focus now. I have learned a lot from you and will let the Leaders know. Please do not reject us if we need your help in the future.”
Feng Yu replied and is feeling proud in his heart. It feels good to give lessons to a leader.