Daming Yuanfu

Price war is really a familiar but unfamiliar term to Gao Pragmatic. He said he was familiar because he heard too much in his previous life; he said he was unfamiliar because he heard too little in this life.

In the previous life, the various price wars in the Red Dynasty were extremely fierce. As a consumer, you may be secretly happy, but if you are a relevant party involved, it may be thrilling.

However, as a township cadre under the jurisdiction of a third- and fourth-tier city at that time, the price war had a limited impact on Gao pragmatism. As for this generation, when Jinghua started its business, it used technology monopoly + upper-level protection. After it became rich, it often did not need to engage in price wars because of its extremely high capital abundance.

Now comes the price war.

Now that things have happened, as a pragmatic Gao who has studied some economics, he naturally quickly understood that it was natural for the textile industry to break out of a price war. On the contrary, it was his failure to predict in advance that was the real negligence - in the final analysis , or because he is too busy. On the one hand, he has to be the chief minister of the imperial court, and on the other hand, he inevitably cannot care about the development and changes of Beijing.

Why did the price war break out? This is naturally knowledge that Gao Pragmatic has learned. Even if he has not used it for many years, he will not forget it. Generally speaking, there are several possibilities:

First, oversupply: with the improvement of productivity, overcapacity problems have arisen in some industries. In this case, companies are facing huge pressure to survive, and price reduction has become an effective response. A large number of companies or a few leading companies do this, and a price war breaks out.

Second, insufficient market demand: Although there is excess production capacity in some industries, in other industries, due to other problems that have not been effectively solved, consumers generally hold a conservative attitude and actively or forced to reduce consumption levels, which is also This will lead to price wars.

Third, product homogeneity: In many industries, the homogeneity phenomenon between products is very serious, which forces companies to reduce prices to attract consumers.

Fourth, market competition is fierce: Since China has been characterized by "vast land giants" since ancient times, except for a few eras of separatist rule, it has been able to form a unified dynasty most of the time, so overall it is a "super large unified market."

In this case, market competition is often particularly fierce, especially in the fields of necessary consumer goods such as food and cloth, so price reduction will naturally become the most common marketing method.

Fifth, the strategic choice of enterprises (or families, clans, or chaebols): For some powerful wealthy families, they may use their economic strength to adopt a strategy of dumping sales in a certain regional market at a price below cost, in order to To achieve the purpose of controlling the market.

Before the emergence of a business overlord like Jinghua, this style of play was generally limited to the coverage area of ​​the wealthy family. For example, a county, a prefecture, or something larger, but that's about it. Few families are powerful enough to control a provincial market.

However, after Jinghua appeared, this situation began to change. Due to the huge size of Jinghua, its competitors will naturally find that it is completely impossible to compete with Jinghua alone. They must form some kind of alliance, otherwise they can only surrender and change jobs, and let Jinghua take them away. Some markets are completely empty.

As a result, the Jiangnan area with the highest concentration of commercial capital began to form the Jiangnan Chaebol Alliance. Although they did not form an alliance based on blood and did not really form an inherent organization, they did unite with the purpose of coordinating the unified actions of the major chaebol families. " Resist Beijing’s oppression.”

This brings us to the sixth reason for the emergence of price wars, namely the competition for market share: in later generations, expanding market share is one of the major goals pursued by enterprises, and in a normal commercial market with transparent prices, price reduction is the most direct and effective way.

Jinghua has unique advantages in almost all fields involved in the Ming Dynasty: advanced technology, abundant capital, and political resource endorsement.

In this case, Jinghua's grab for market share is usually simple and direct: because of advanced technology, our products are highly competitive; because we have abundant capital, we can cut prices and promote sales, which can sometimes even be called dumping; because behind my back I have almost the strongest political endorsement in the world, so I have no fear of what you are doing behind my back.

In this way, pressure is put on competitors. The Jiangnan Chaebol initially thought that as long as everyone united and sold at a certain price, they could achieve the goal of stabilizing market prices and thus ensure profits. However, the reality is that Jinghua gave them a loud slap in the face - Jinghua Textile did not care about their unified pricing and directly followed its own sales ideas.

There is no doubt about the result, and consumers are not stupid. Your Zhang family's cloth sells for one or two yuan, while Jinghua's cloth only costs eight yuan, and Jinghua's cloth is even slightly better in quality. Then I would be stupid not to go to Jinghua to buy cloth. ah!

This can lead to the reasons for price wars in Articles 7 and 8. Seventh, gain first-mover advantage: If a company can take the lead in lowering prices, it can occupy a dominant position in the market in the short term and may continue to maintain this advantage in the future. Putting aside the new markets created by Jinghua itself, when Jinghua joins an old market, it usually starts like this.

The eighth point is more direct, small profits but quick turnover: In a market economy environment, companies need to achieve profits through various means, and reducing prices to a lower price can achieve the purpose of small profits but quick turnover, thus increasing the profit margin of the company. .

I have said many times before that all departments within Jinghua implement a self-financing model, but what is not elaborated on is what is behind the "self-financing" model. In fact, since you have to be responsible for your own profits and losses, there will naturally be corresponding reward and punishment mechanisms such as "dividend incentives" and "last elimination". Otherwise, Gao Pragmatic would have gone bankrupt long ago. How could Jinghua be the commercial giant it is today?

Basically, unless Gao Pragmatic orders various departments to conduct joint deployment - for example, all departments in Jinghua in the northwest are now required to contribute to the Western Expedition - otherwise there will not only be no joint action within Jinghua, but sometimes there will even be misaligned competition.

For example, the two powerful departments of Jinghua Steel and Jinghua Infrastructure sometimes fight over some overlapping products. Generally speaking, although reports on these matters are sent to Gao Pragmatic's desk, Gao Pragmatic does not report them at all most of the time. in spite of. It's not that no one "boldly speaks to the boss" about this, but Gao Pragmatic will usually answer: "Only with competition can progress be achieved." And then continue to ignore it.

Under such a management model, the managers of various departments in Jinghua are naturally competition-oriented. They must compete internally and even more externally. After all, the truth is obvious: whether I want to pay dividends or "make progress", I must first increase profits, because profit is the primary assessment goal of all departments in Beijing (even relevant departments that need to directly participate in the war).

So, what will Jinghua Textile do? Do we need to explain it in detail? We, Jinghua, are the inventors of the "Jinghua Spinning Machine", and we also have a steady stream of technical personnel sent from Jinghua Craftsman School. I can continuously improve the spinning machine technology, continuously optimize the production organization model, and finally reduce costs and increase efficiency, achieving the goal of "I can crush you with technology, but I can still crush you with quality."

After a period of time like this, the production and sales pressure of the Jiangnan chaebols naturally increased step by step, and eventually reached a point where it was difficult to resist. But the reason why the Gangnam Chaebol can become a chaebol is that they will not be stupid enough to wait until the final date comes.

They quickly united after sensing the danger. They first intended to shake Gao Pragmatic politically. After failure, they did not delay and immediately returned to the main commercial battlefield (but did not completely give up politically) and directly started a price war. They hope to seize back the market and force Jinghua to make concessions.

Some people may wonder, with Jinghua’s advantage so great, how could the Jiangnan Chaebol think price wars are useful? In fact, the price war is just a reaction at the commercial level, and they may not really think that price war alone can force Jinghua to make concessions.

Their real purpose is to make the matter so big that Gao Pragmatic has to face the intensity of the Jiangnan business war and consider making a compromise. Will Gao Pragmatic give up the various advantages that Jinghua already has and make compromises because the Jiangnan business war is too fierce? Of course it is possible, and the probability of compromise is high.

Why? Because the Jiangnan chaebol knew very well that Gao Pragmatic's "main business" was never a businessman. He was the chief minister of the imperial court and the leader of a party; he was the number one scholar in the Sixth Order and the leader of scholars.

In the special political environment of the Ming Dynasty and even the entire "feudal era" in China, it was impossible for such people to get into money, because social moral constraints are often "the higher the status, the greater the constraints" - look at Zhu Yijun in the original history When he was young, he got drunk and beat up an eunuch, and even had to be ordered to do so by Empress Dowager Li. This was also part of the "social moral restraint".

Speaking of which, it was thanks to the fact that Gao Pragmatic's family was a "practical learning sect". When he founded Jinghua, what he preached to the world was "I did this to prove the feasibility of rejuvenating the country through industry and commerce", which was part of the practical learning thought. Otherwise, Jinghua would have been charged with high pragmatism long ago!

Now that Beijing has achieved this, Gao Jingshi was impeached for talking about using power for personal gain. It can only be said that Gao Jingshi has made too much contribution in the past, and the financial performance of the Ming Dynasty has indeed proved that "rejuvenating the country through industry and commerce" is indeed feasible. Among the big chaebols, At a time when they could still get by, they didn't want to overturn the table.

As for now... isn't it impossible to survive even if you just make do with it?

It must be said that their goal has actually been achieved, because after Gao Pragmatic figured out the logic behind it, he naturally planned to compromise.

This is not a war, not a life-and-death struggle, and even Gao Pragmatic never intended to "eliminate" the Jiangnan plutocrats.

Are you kidding? What he wants to do is to cultivate the emerging bourgeoisie. Wouldn't it be contrary to his own ideals to eliminate them? After wiping out these sprouts of capitalism, does his high pragmatism expect the still stubborn landlords to run into capitalism?

The emergence of Jinghua was, firstly, used to provide Gao Pragmatism with funds; secondly, it was used to guide nobles and some officials of the pragmatic school and the families behind them to start the bourgeois transformation; thirdly, it was used to force business families across the country, represented by the Jiangnan Chaebol, to compete. to accelerate development and transformation.

In short, for the Jiangnan chaebol, Gao Pragmatic actually hopes that Jinghua will be their whetstone, but he will never break their knife with one stone.

Since he planned to compromise, Gao Pragmatic immediately called Cao Wenzhen, president of Jinghua Textile, to discuss the matter.

Cao Wenzhen's "Cao" has nothing to do with Cao Gan, the president of Jinghua Trading Company, and his son Cao Ke, the confidential secretary of Jinghua Secretariat. Cao Wenzhen originally had three sisters and two brothers, and he was the youngest.

His initial relationship with Gao Pangshi came from his eldest sister Cao. Cao was Gao Gong's concubine and the biological mother of Gao Gong's four daughters.

As mentioned a long time ago, Gao Gong had no children in his life, so after his death, he adopted his second son Gao Wuguan from his sixth brother Gao Cai as his heir. However, Gao Gong originally had three daughters, all of whom were born to his concubine Cao, but unfortunately they all died in infancy.

Gao Gong's three daughters, the eldest, Qizhen, died at the age of fifteen; the second, Qizong, died at the age of fourteen, and was going to get married in a year or two; the youngest, Fifth Sister (Fifth Sister is a nickname, may be Because he did not dare to take a name, his name was not recorded.) He died at the age of fourteen. All died unmarried.

Gao Gong has a very good relationship with his daughter. Her daughter is particularly attached to him, especially the youngest daughter. When she was young, he would hold her in his arms every day. After the first two daughters died in infancy, their biological mother Cao died of excessive grief. The younger daughter had suffered from hemoptysis since she was a child. The pain recurred due to the death of her biological mother and she also died of the disease.

Gao Gong was a Hanlin scholar at the time and was temporarily buried outside Beijing. He planned to move his burial back to his hometown in the future. However, it was delayed due to fierce political struggles. It wasn't until Gao Pangshi finished the Monan War and stabilized his position in the court that he took the time to move his cousin's grave to the ancestral grave in Xinzheng in a glorious manner.

Because of this incident, Gao Pragmatic met Cao Wenzhen, who came to the capital as his cousin and uncle. After some introductions and exchanges, he learned that the Cao family has always been engaged in textile business, but on a limited scale - this is not surprising. The north has always focused on military and political affairs, and has long been inferior to the south in terms of "industrial development", especially in the Jiangnan region.

At that time, Gao Jingshi was still a little strange. Although Cao was only Gao Gong's concubine, Gao Jingshi was the "double heir" of the third uncle Gao Gong's political status and academic status. He should treat the third uncle's wives and concubines in both emotional and logical terms. The family is taken care of. Now that he has reached this position, why has the Cao family never come to him for resources?

Later, through communication, I learned that the Cao family had difficulties in business operations in the early years and was politically suppressed by business opponents, so they had no choice but to give their eldest daughter to Gao Gong as a concubine. However, Gao Gong took great care of the Cao family, especially when it was confirmed that his wife would have no children, so he took even more care of the Cao family.

However, Gao Gong himself was not rich. To put it bluntly, this kind of care could only give him two to three hundred taels of silver every year. The Cao family was already managed by two adult brothers of the Cao family. As the head of the Cao family, the eldest brother used the name Gao Gong to bully and dominate the market in Mi County (Lin County, Xinzheng, where the Cao family is located). As a result, Gao Gong found out and was furious. Mi County was ordered to conduct a strict investigation...

In short, the final result was that the two brothers-in-law of the Cao family were severely punished with "three thousand miles of exile". That's fine, the key is that these two were still unlucky. After being exiled to Yulinwei, Shaanxi Province, they encountered an Ordos bandit (I had not paid tribute yet) and both lost their lives.

Because of this incident, Cao Wenzhen, who was still underage at the time, publicly swore to sever ties with his "brother-in-law" Gao Gong because of his youth and arrogance, and then he really broke off the relationship.

Gao pragmatic understood these situations and naturally used his usual advantages to convince Cao Wenzhen. To this end, he even publicly staged a "three visits to the thatched cottage" style performance, which convinced Cao Wenzhen to believe his sincerity and retract his angry words.

However, the reason why Gao Pragmatic did this was, on the one hand, to consider the posthumous reputation of Gao Gonggong, who had already received the posthumous title of "Wenzheng" (although annihilation of relatives for righteousness was considered a compliment in this era, it was not a complete compliment), and on the other hand, he discovered Cao Wenzhen had some good insights into business and textiles, but because he had a falling out with the Gao family, most people turned around him, so it would be good if the Cao family's industry could be sustained, but there was no hope of growing bigger.

The timing of this incident was very coincidental, because in the early years, Gao Pragmatic had no intention of entering the textile industry. Later, in order to promote spinning machines and see if it could promote technological progress, he decided to let Jinghua personally join the textile industry. At this time, a supervisor was needed, and Cao Wenzhen happened to appear, so Gao Pragmatic naturally would not let down God's kindness and took Cao Wenzhen under his command.

After this, Jinghua Textile was established and Cao Wenzhen was appointed president. Cao Wenzhen lived up to his mission and allowed Jinghua Textile to conquer the red sea of ​​the textile industry step by step. In the past two or three years, he finally overpowered the Jiangnan chaebol and forced them to take this strategy.
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PS: I originally planned to write a little bit to make up for the 5K, but when I came back tonight, I accidentally got caught in the rain. I didn’t do much at first, but now I feel a little heavy-headed, so I stopped...