Video Game Empire

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A row of black cars drove into the Zhuyuan Hotel, which is one of the earliest Sino-foreign joint venture hotels in Shenhai Special Economic Zone, and one of the hotels with the best conditions in Shenhai City. According to international standards, Zhuyuan Hotel is at most a three-star level, but the few guests who got off the bus obviously didn't care so much.

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"Mr. Bradshaw, how do you feel about visiting our two factories?" Li Xuan asked with a smile.

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Li Xuan has just accompanied Thornton Bradshaw, the chairman of the American company, to visit the joint venture picture tube factory located in the Shekou Industrial Zone, and the TV assembly factory of another Lu's Electronics Company not far from it.

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"The workers here are very enthusiastic and disciplined, making me feel like I'm visiting a Sony factory in Japan!"

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Li Xuan saw the look of amazement on the other's face, and knew that his statement was a bit exaggerated. He shook his head and said: "Compared to the Japanese people's excellent and efficient production efficiency, we still need to improve a lot. Of course, Mr. Lu's company invited the Japanese management team to assist in the early stage. To improve the management efficiency of the factory, they also learned a lot of essence from the Japanese!"

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Lu Qintian's English proficiency was average, and he needed his son to gently translate the conversation between Li Xuan and Bradshaw. He humbly waved to Li Xuan, indicating that his company was not as good as what Li Xuan said.

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Li Xuan smiled and continued: "However, compared with Americans who pursue individual independence and a stronger willingness to be liberal, East Asian countries are influenced by the traditional oriental culture of the mean, their workers are more industrious and patient, and their labor disciplines are stronger! More importantly, there is no troublesome trade union force in the United States!

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I was wrong. In fact, there are socialist trade unions in China. However, unlike their American counterparts who often launch workers' strikes to demand wage increases, the main tasks of Chinese labor unions are to organize cultural performances, distribute summer heat subsidies, and be responsible for employees' weddings and funerals. "

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A look of incredible surprise flashed in the eyes of Bradshaw and other colleagues in the company. Are unions that do not strike still called unions? Britain's coal industry unions, for example, are now negotiating with Downing Street, and if the British government fails to meet their demands, it is likely to break out in one of the worst strikes Britain has seen in decades. Hundreds of thousands of coal companies stand ready to take to the streets to protest the Thatcher cabinet's coal privatization policy.

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"Mr. Bradshaw. May I ask how much labor cost in the company's TV production costs?" Li Xuan asked.

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This is not data that needs to be kept confidential, so Bradshaw replied readily: "The labor cost and the management cost are combined, reaching 15% to 20%!"

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This is also because of the company's recent years. Move the vast majority of TV production to Mexico, otherwise the proportion of labor costs will be even higher. The wages of American workers are higher than that of Japanese workers, but the labor efficiency is far less. This has caused a huge impact on American companies in one industry after another, including televisions, automobiles, copiers, etc.

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Bradshaw found that this time it was all the people in Hong Kong who were shocked. So he curiously asked about the labor cost of the Hong Kong factory.

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"Taking the TV assembly factory that Mr. Bledsoe visited just now as an example, workers' salaries plus corporate management expenses only account for 3% of the total cost of the TV set. Even if the labor of key raw materials such as picture tubes is counted. The production cost will not exceed 10%!" Lu Qintian explained.

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That is to say, under the same conditions, the TVs produced by Lu's Electronics Company can save at least 5% of the cost compared to the company. The company's profit margin on TV products is usually only about 10%. If the cost can be reduced by 5%, the company can undoubtedly greatly enhance its competitiveness and start a price battle with Japanese companies!

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"Hasn't the company considered transferring production capacity to Asia, where production costs are lower?" Li Xuan suggested for the company.

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Of course, things are not as simple as they seem. The company has long established a production base in Taiwan. If only a simple industrial transfer can enhance competitiveness. The company has already transferred its production capacity to Asia!

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In fact, before the company, most of the labor-intensive processes, including TV assembly, were transferred to Mexico, hoping to reduce labor costs. Although there have been certain effects, it still cannot fundamentally reverse the cost disadvantage of the company in the competition.

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"Has the company considered transferring production capacity in a more thorough way?" Li Xuan looked at Bradshaw and said, "For example, outsourcing production! You must have noticed when you visited Lu's TV assembly plant. Mr. Lu's company is also responsible for producing monitors for Aikang Company while producing its own brand TV sets!

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If the company wants to defeat the aggressive attack of the Japanese company, it can only be equal to the other party in terms of cost! American companies are very well paid for their employees. And the production efficiency is low. But Mr. Lu's company is different. Maybe Lu's Electronics Co., Ltd. can't compete with Japanese companies in terms of production efficiency, but Mr. Lu's factory has lower salary expenses.

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In the two factories we visited just now, the monthly salary of each ordinary worker is only 240 yuan. Equivalent to about 120 US dollars, it is only equivalent to one-tenth of the American worker! But they are more diligent and efficient than American workers!

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I heard that the company's establishment of a factory in Mexico was not smooth. Not only is the political situation in Mexico unstable, but there is also a lack of qualified industrial workers! In fact, the company does not need to build its own factory at all, but should pass on the production risk.

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I think you can have a chat with Mr. Lu if your company outsources all TV production contracts to him. What is the lowest price he can give you? I'm guessing it will be cheaper than your company's own production in Mexico! "

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After listening to Li Xuan's words, everyone present fell into thought. The foundry model of the electronic industry in later generations has been very mature. For example, the famous Foxconn, the world's "kidney machine" is made for Apple. Another example is the Lenovo computers we use, almost all of which are not produced by Lenovo.

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Bradshaw took a deep look at Li Xuan, he was quite interested in Li Xuan's proposal. Outsourcing the production of the entire product eliminates the need to bear the risks and costs of building a factory, which will undoubtedly allow the company to get rid of the burden and travel lightly.

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Moreover, after the cooperation with Lu's Electronics Co., Ltd. on the previous project of the picture tube factory, the company actually recognized the management level of this Hong Kong enterprise, which laid a foundation of trust for the continued cooperation between the two parties. However, Bradshaw was a little puzzled about Li Xuan's purpose. As far as he knew, the Oriental Group did not seem to have any intention to deeply intervene in the TV industry.

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For example, in the previous CRT plant project, Dongfang Company only played the role of a major shareholder and financial supervisor. Don't care about gaining leadership in corporate management. And Li Xuan's words just now revealed that he paid a lot of attention to the company, and even knew the company's business in Mexico.

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Now he suddenly speaks out to coordinate the in-depth cooperation between the company and Lu's Electronics. What is the underlying purpose? Bradshaw never believed in love for no reason in the world. If the other party does not have their own purpose. Why bother taking care of other companies' affairs?

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At the same time, Lu Qintian was also a little surprised, but he was more excited. Don't look at the rapid development of Lu's Electronics Company in the past two years, but more than half of the company's business still relies on the OEM production of monitors for Aikang. And Lu's own TV products have a certain reputation in Southeast Asia. Only recently, relying on the good relationship with the mainland government, has gradually entered the friendship shopping mall system in the mainland.

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Lu's company produced and sold about 300,000 TV sets last year. However, although the company is in the United States, the world's largest consumer market, its share of TV sales has dropped again and again, from 45% at its peak to 20% now. However, the company's total TV sales for the year still reached 4.5 million units, 15 times that of Lu's company.

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If the company is really willing to subcontract all the TV production to Lu's Electronics Company, even if each TV only earns 10 US dollars in foundry fees, Lu Qintian will have at least 300 to 400 million Hong Kong dollars in profits every year, and he Now the entire net worth is only three or four billion Hong Kong dollars.

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And the annual order of 4.5 million units is enough for him to negotiate with the mainland to build a factory. Make the conditions the most demanding. At the same time, such a large-scale order is enough to maximize the advantages of large-scale production. Lu Qintian is confident that the current manufacturing cost will be further reduced.

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Taking his own company as an example, Li Xuan introduced Aikang's experience in outsourcing the production of a series of computers. While Aikang is rapidly expanding its production capacity to seize the market, it has effectively avoided a large number of redundant staff caused by the company's excessive bloat through production outsourcing.

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The vigorous development of the foundry industry is actually the product of industrial transfer and division of labor in the next wave of economic globalization. However, in Hong Kong, due to Li Xuan's butterfly wings, almost all of the PCs, arcades, home game consoles, handheld game consoles, etc. under the Oriental Group are produced by OEM.

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With the rapid development of Dongfang Group, all the electronics factories involved in OEM production also got a share of the pie. Let this model have been generally accepted in Hong Kong. For example, in addition to Oriental Games, there are six or seven arcade companies in Hong Kong.

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Although the game consoles of these companies have not been able to sell well all over the world like Dongfang Game Company, they are at least in Hong Kong. And nearby Taiwan, Southeast Asia and other markets have certain sales. These companies did not produce arcade machines by themselves, but adopted outsourcing like Eastern Game Company. In this way, even only four or five people can support an arcade R&D company, which greatly reduces the entry threshold.

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"Mr. Li, the suggestion you made before is very valuable to the company, but what is your purpose?" Bradshaw went to Li Xuan before dinner. asked curiously.

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"If I said I just wanted to win your friendship, would you believe it, Mr. Bradshaw?" Li Xuan said with a smile.

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"Just call me Thornton, our friendship isn't worth studying the company so carefully!" Bradshaw shook his head and said.

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After Li Xuan left, he thought carefully about Li Xuan's previous conversation in the room, and felt that Li Xuan's proposal was by no means a temporary initiative, but seemed to have carefully studied the company's situation.

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"Okay, Thornton! I have really collected the company's information and analyzed it carefully! After all, I have a lot of cooperation with you, the picture tube project, the semiconductor project, the liquid crystal project! And in the long-term attention to your company , I found that the company has entered a dead end, that is, it cannot compete with its Japanese counterparts in cost control!

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This has caused your company to be at a loss when faced with the price war of Japanese companies, and can only watch your market share be eroded by Japanese companies! Fifteen years back in time, Japanese TVs were almost negligible in the US market. Competitors at that time were American appliance makers such as Westinghouse, General Electric, Filco, Motorola, Magnosco, Emerson and others.

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But now, Westinghouse Electric and Motorola have withdrawn from TV and their business, and General Electric is also preparing to sell their TV division. Other companies are either going bankrupt or being acquired! And what to do next, the board of directors under your leadership clearly wants to reduce costs by moving production to Mexico, but Mexico is clearly not a good choice!

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Although wages in Mexico are much lower than in the United States, Mexicans have worse labor discipline than the United States. Moreover, the political situation there is turbulent, the government is very corrupt, and companies need to pay a lot of extra costs, which offset the advantages of cheap labor!

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So in my opinion, Mexico is by no means a good choice! The future is in Asia~www.readwn.com~ In fact, the rise of the four Asian tigers before has heralded the beginning of the transfer of the world economy and industry. It's just that the light industry represented by textiles and clothing was transferred before.

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Now, including Taiwan, Hong Kong, and South Korea, all are facing the problem of industrial upgrading and transformation. The future of transformation is the electronics industry represented by TV sets! Companies should follow this trend of global economic development and make their own changes! "Li Xuan said loudly.

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But after saying so much, he still didn't reveal his ultimate purpose, so Bradshaw continued to smile at him.

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"Okay, my purpose is to hope that the Dongfang Group can cooperate with Deep and Deep!" Li Xuan finally said.

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"More in-depth cooperation?" Bradshaw chewed on the meaning of Li Xuan's words, "TV field?"

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Li Xuan nodded and shook his head again. When Bradshaw was a little confused, Li Xuan then said something that made him a little unbelievable: "If I say that Dongfang Electronics hopes to acquire a company, will you think that I am ignorant?" (Unfinished) Continued.) xh118

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