"If your sales in a year are not eighty-three units, but Erbai, or even four hundred units, can your factory price still be reduced?" Liu Yongzhuo continued to ask.

"If it's more than 200 units! That's definitely no problem. If I can make a profit by 40,000 units per unit." Xi Leiming answered neatly and answered...

This is the so-called scale effect problem. The costs of small-scale production and large-scale production are definitely different.

After the production batch is large, special tooling can be used, and molds do not need to be replaced back and forth. Moreover, after the purchase volume of some accessories increases, the unit price still has room for a decrease. In this way, it is normal to reduce the entire production cost by 10,000 or 20,000 yuan.

While Liu Yongzhuo and Xi Leiming had a question and answer, the bosses of other companies also began to secretly calculate their product costs in their hearts. They found that if the sales of their companies could increase by one to two times, it would be easy to reduce production costs by more than 10%.

On the other hand, if production costs drop and then ex-factory prices drop, then there seems to be room for product sales to rise. Could it be that Liu Yongzhuo's idea is this?

Sure enough, after asking Xi Leiming, Liu Yongzhuo turned to everyone and said, "I just asked Xi Leiming about these situations, and everyone has heard of them. I think the situations of each company are similar. If we can expand sales, the cost can be effectively reduced, and our competitiveness will become stronger."

"Mr. Feng just said that the four words "becoming stronger and bigger" have been overstated by everyone. I think these four words need to be said separately. In our machine tool industry, we must first become bigger and then become stronger."

Feng Jiahua took over the conversation: "Xiao Liu, I heard what you mean, and I suggest that everyone significantly reduce the current sales price to seize the market, and then use the advantage of scale to reduce costs and make up for the shortcomings. That's right?"

Liu Yongzhuo nodded and said, "That's right. I roughly calculated that most of the products of our entire machine tool industry still have a lot of room for price reduction. If we consider the cost reduction brought by the scale effect and reduce the price increase in some circulation links, it should be no problem for us to reduce the entire sales price by 30%.

“Reduce the price by 30%!”

Liu Yongzhuo said this and everyone was shocked. There are so many companies, but no company dares to say that their profits can reach more than 30%. If the product sales price drops by 30% at one go, wouldn’t everyone directly turn from profit to loss?

Of course, another situation that Liu Yongzhuo said is also true. If the price drops, the market share of various companies will definitely increase, and production costs will also drop by then. But even so, reducing the price by 30% is a loss.

For example, if you used to produce 100 machine tools, the profit might be 500,000 yuan; now the price is reduced by 30%. Sales have increased to 200 units, but the profit may fall to only 700,000 yuan. You can easily earn 500,000 yuan. Now you have more work but less money. What is this for?

"Mr. Liu, is the price reduction you mentioned a little too large?" Feng Jiahua asked timidly, "The customers are actually quite satisfied with our current price. There is no need for us to take the initiative to reduce the price."

"Yes, yes, Mr. Liu, I don't think it's necessary to do such a large amount." Xi Leiming agreed with Feng Jiahua's words, "Our factory has been losing money in the past few years. Finally, with the help of Huayang Heavy Industry, it has turned losses into profits. The employees in the factory are counting on the factory to earn more and give everyone more bonuses. If the price reduction is too large, we may not be able to bear the losses."

This is for Liu Yongzhuo. If someone else had suggested 30% of the price reduction to everyone, everyone would have left long ago. Those who are easy to talk to will think that you are inexperienced and give advice.

If you are not easy to talk to, you have to directly doubt whether you came here on purpose to make trouble for everyone.

However, the person in front of me was the eldest son of the Liu family who was kind to everyone. For the sake of Xinghua News Agency and Liu Haoran, everyone really didn't want to dislike each other.

Before Liu Yongzhuo spoke, he expected everyone to react like this. He smiled and said, "Everyone, I know that everyone is living a good life now, and he has a little bit of the idea of ​​being at peace. But don't forget that there are actually a group of strong enemies around us. Think about it, what should we do if the machine tool companies of several old-fashioned companies such as Longyuan start to lower prices?"

"No? Their price reduction space is not much." Feng Jiahua also investigated, so he said so loudly.

The machine tools produced by Xinghua News Agency and the machine tools produced by Tianyu Group and Longyuan Group have been competing for several years, and their trump cards are clearer. The machine tools of rival companies have some advantages in quality and performance, but they are disadvantages in terms of price. The quality of the machine tools we produce is unsatisfactory, mainly because they win the favor of users with their low prices.

Those hostile machine tool companies have thought about taking the low-price strategy, but old companies have troubles with old companies, and their salary standards, profit margins, etc., and they are hard frames that are not easy to break through.

In addition, their high technology did not fall from the sky, but was supported by a large amount of R&D funds, which had to be distributed to the sales price of machine tools. So it makes sense that Liu Zhi said that there is not much room for price reduction for imported machine tools.

Liu Zhi, chief engineer of Liubei Forging Machine Tool Factory, said: "Mr. Liu, are you too worried? If we even have to consider these things, then don't compete with them."

Liu Yongzhuo said angrily and amusedly: "Master Liu, are you good to care about current affairs? Since the end of the large-scale military order, several large groups such as Long Yuan and Tianyu have begun to discuss price cuts. This is not a matter of worrying. I asked everyone to prepare for a 30% price cut, and this is also taken into account."

"Let's talk about the threat first. I just said that due to the influence of the national economic transformation, relying on military orders is not working, which will lead to the original company's price drop in the price of machine tools. In addition, during the crisis period, companies will lower their profit expectations, not seeking to make money, but seeking to ensure capital. In order to increase sales, they may also actively reduce prices and compete with us." Liu Yongzhuo used some information he received to help the people present analyze.

"So, what about the opportunity?" Feng Jiahua asked.

Liu Yongzhuo smiled: "The opportunity means that these old-fashioned companies are now facing financial difficulties and are eager to recover funds from the market. It is difficult to bear high losses. In this way, if they want to fight a price war with us, they will inevitably look forward to it and dare not get entangled with us to the end."

"We should seize the other party's mentality and act like we are willing to fight with each other and lose both ways, and the other party will naturally become afraid. This is a good opportunity for us to recover lost ground."

Liu Yongzhuo's words were very simple, but the people present were thinking about the market trends every day. They didn't need to hit the drum hard, and Lin Zhenhua broke it lightly. Everyone understood.

This is the current situation. Regardless of whether the machine tool companies under Xinghua News Agency intend to sell at a lower price, machine tool companies hostile to industrial groups must lower prices to grab the market. Instead of being passively fighting, it is better to take the initiative. And once the competition starts, it will be necessary to fight until the other party has no power to fight back.

"Haha. Xiao Liu is always better at seeing problems than others. I admire you. I admire you." Feng Jiahua said with a light patted.

Liu Yongzhuo waved his hand and said, "When you laugh, you laugh, I'm just throwing a brick and attracting desires. These views were raised by our group's marketing department. By the way, Member Chen Yaguang of the Management Committee also has this view. On this issue, I went to him specifically to discuss it. He also believes that this is a good opportunity for our Xinghua News Agency's machine tool industry. The temple."

"Messenger Chen is a proud disciple of Director He Yongnian. He is young and promising and has extraordinary knowledge." Li Chang said, "Have he ever mentioned what the Strategic Committee thinks about the current economic situation?"

After graduating from Dr. Chen Yaguang, he was left to work in the Strategic Commission and was soon promoted to the Director of the Policy Research. It is said that he was the author behind many of the macroeconomic policies issued by the Strategic Commission, so Li Chang was particularly concerned about Chen Yaguang's views on this matter, because these views may eventually be reflected in the official documents of the Strategic Commission.

Liu Yongzhuo added: "The Strategic Committee needs to consider many issues. In addition to purely economic factors, they also need to take care of the domestic balance and coordination strategy. From a macro perspective, we are still implementing the principle of friendly and mutual assistance, and will not be too ostentatious and radical at this time. However, Dr. Chen Yaguang also said that some industries will not oppose it and may even provide some support."

Everyone knows the principle of friendship and mutual assistance. Due to the war, China became a world hegemonic power in the Eastern camp, and it offended the entire Western world. If internal struggles continue, it will inevitably lead to Western countries led by the United States taking advantage of the situation.

In this case, the government has put forward the principle of good mutual assistance and mutual support for enterprises. The purpose is to avoid internal consumption as much as possible, maximize the time for stable development, and further widen the gap in science and technology and civilization with Western camp countries.

The words of Chen Yaguang transferred by Liu Yongzhuo revealed two information.

First, during the current economic development period, the country will not adopt any policies to encourage internal struggle from the macro perspective, but will use the purpose of unity and mutual assistance to make all walks of life trust and support each other. Second, the country does not oppose certain industries to compete in healthy competition based on their own situation. Of course, the degree of action still needs to be carefully considered.

As the affairs officer appointed by the Strategic, Li Chang naturally understood this kind of official rhetoric the fastest. He nodded and said, "Since the Strategic Commission has such a spirit and Mr. Liu has just made such an incisive analysis for us, then the strategy of our machine tool industry is very clear. I think Xinghua News Agency should seize the opportunity, take bold measures, not be afraid of difficulties and fight a turnaround."

"I think it's okay!" Xi Leiming echoed first, and his emotions were also mobilized.

When Lin Zhenhua first proposed a 30% price cut, Bao Guangming felt a little painful, but after thinking about it carefully, he felt that this plan was not that scary. If some hostile companies could really squeeze out the products and other companies from the market, the lost profits may not be able to be made back.

Price war is often used commercially.

In order to defeat your competitors, you can reduce the price of your product to a loss. As long as you can hold on, you can raise the price again after the opponent collapses. At that time, your product is in a monopoly position. Don’t you have the final say on what price?

Of course, there are tricks to increase the price after the price is reduced. You cannot directly raise the price of the original product again, as this can easily lead to customer dissatisfaction. You can stop the original product and launch an improved version of the product, and take the opportunity to raise the price. This trick is familiar to everyone.

"Mr. Liu, what do we do? We will do it according to your instructions." Liu Zhi and others also figured it out and said to Liu Yongzhuo together.

Liu Yongzhuo nodded with satisfaction: "What's the point of instructions? I don't dare to take it. I only have immature ideas. Let's talk about it and discuss it together. We have analyzed it before. Now it is a very good opportunity. If we seize this opportunity, it may give a fatal blow to the hostile machine tool company, so that they will not be able to recover their vitality for at least a few years."

"My idea is this. All the bosses here will work hard after they go back. They will carefully calculate the cost of the company's products and estimate a price reduction that can be affordable. Then, according to the calculated results, we gradually lower the product prices in stages, squeeze the market of hostile enterprises, and force them to fight price wars with us."

"Steply lowering the price? What does this mean?" Xi Leiming asked in confusion.

Liu Yongzhuo explained to him: "Director Xi, think about it, if we reduce the price by 30% in one step, what will our hostile enterprises do?"

Xi Leiming blurted out without thinking: "They must have admitted defeat directly. I just calculated that they could not afford a 30% drop no matter what."

"That's right." Liu Yongzhuo said, "If we reduce the price by 30% at once, the other party will definitely not respond, but will directly shrink back and let us play a one-man show, so we will suffer a lot. We will not only cut the price to grab the market, but also drag our opponents into the water and let them drown half dead."

"I understand." Liu Zhi interrupted, "Mr. Liu meant that we should keep our cards in check and reduce them by 5% or 10% first, so that the other party feels that it is possible to compete with us. They are definitely unwilling to give up the market just like this, so they will also lower the price with us. After they are reduced to the right level, we will continue to reduce the price by 5% to lure them to follow up. After this, they are dragged into the water by us."

"No, this is too dark?" Xi Leiming also reacted.

According to Liu Yongzhuo's idea, old machine tool companies such as Longyuan must participate in the war. Xinghua Machine Tool companies lower prices by about 10%. If the other party's company does not lower prices, the market will be snatched away by companies under Xinghua News Agency. At such a price, Xinghua News Agency's franchise companies can still maintain profitability.

In order to protect the market, these hostile companies had to lower prices, and then they started to get trapped.

After these companies lower prices, Xinghua News Agency's franchise companies will then reduce the price by 10%, and then the other party will be in a dilemma. If you continue to follow up, you may face losses. But if you do not follow up, the results of the previous price reduction will be redundant.

In such a dilemma, if Lin Zhenhua plays some tricks to make his opponent feel that he can take advantage of it and continues to move down with a lucky mentality, he will eventually be dragged into the water.

Compared with the one-step price reduction, Liu Yongzhuo's idea is indeed much darker. If Xinghua News Agency's companies reduce prices alone and other machine tool companies do not follow up, then although Liu Yongzhuo and others can gain a larger market share, they will inevitably give others the impression of low-end products.

It’s different to pull other domestic peers to reduce prices. Everyone is reducing prices, which means that everyone’s products are almost the same. In the end, other companies can’t withstand the greater price reduction of Liu Yongzhuo and others and withdraw from the market in the middle, which is a foil for Xinghua News Agency’s franchise companies in vain.

In addition, Xinghua News Agency and other peer companies do not completely overlap in product lines, especially in high-end machine tools. Longyuan and Tianyu Group's machine tool companies can still retain some share.

If these machine tool companies reduce prices on low-end products, high-end products must also be expressed, otherwise it will cause dissatisfaction from customers. Therefore, Liu Yongzhuo's strategy is to force competitors to lower product prices across the board. When this price war is settled, these peer companies will find that they not only lost the low-end market, but also significantly reduced profits in the remaining high-end market.

This achieves what Lin Liu Yongzhuo said at the beginning: he must not only grab the market, but also let the other party bear losses.

Feng Jiahua is also a government official and has not been in business for a long time. He can't understand these tricks at once.

However, there was no shortage of people who were attentive to him. After saying this to him, Feng Jiahua then understood Liu Yongzhuo's ideas. He pointed at Liu Yongzhuo with his finger and said with a smile: "Xiao Liu, I really can't tell that you are such a cruel person."

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