Chapter 50 Price Wars
This time, the "smashing of the store" did not cause major damage because it occurred during the renovation, and the Shangjin branch did not cause major economic losses, and the opening of the new store was not affected at all after the case was handled.
The Shangjin branch did not bring much pressure to Li Ran, because after all, it was only a branch store. Wanjia has drawn the experience of opening a branch from the development of Shangjin Branch, which is what Shangjin Branch values to Li Ran. In fact, what really worries Li Ran is Guomei, which is the enemy of Wanjia.
At the beginning, Wanjia relied on overwhelming advertising leaflets to open the market, and developed to today's scale by fighting and raising wars. In terms of the number of stores in Yanjing alone, it has reached the same level as Gome, reaching eight stores, and not only the number of stores, but also the quality of store services is far beyond Gome, so Wanjia is far superior to Gome in terms of user reputation, of course, the disadvantage is that Wanjia's salary expenditure is quite large.
It is said that Gome will sooner or later be used as a stepping stone by Wanjia to step on the advantages of such a fight, and the various promotional activities that Gome has carried out since have been regarded by Li Ran as a dying struggle. But it is no accident that Huang Guang, a witness to the facts, can have such a great achievement as the future generations, and after discovering that the sales promotion still did not improve much, he did not sit idly by, and brazenly launched a price war.
Judging from the information collected by Zhao Qi, Gome has reduced the original price by nearly 10%. You must know that the profitability of household appliances in the early 90s is actually very considerable, due to the large demand, so the sales company does not need to reduce the price across the board, because the market share is enough to support the development of the sales enterprise, and now the reduction of 10% is to throw money at the simple store.
Gome, which has begun to throw money, has obviously had a correct understanding of the situation it is facing, and has begun to resist the strong oppression of Wanjia. The purpose of blatantly competing for the market by lowering profits across the board is to pull Wanjia back, hoping to occupy the market and reduce the development process of Wanjia.
For the war provoked by Guomei, Li Ran's heart was as disgusting as eating a fly, this kind of killing 800 enemies and losing 1,000 is really tireless, but the most uncomfortable thing is that he still has to fight in the face of such a war. At the critical moment, the price reduction will obviously have a great impact on the development of the Songjiang branch after the year, but if the price is not reduced, it will inevitably lose the market in Yanjing.
Since it has become inevitable to reduce the price to meet the battle, then it is good to fight. Wanjia was originally getting goods from manufacturers at a relatively low price, even if they wanted to fight a price war, they were not afraid. However, it is not wise to passively follow the trend to reduce the price, and if you want to reduce it, you will have to be creative.
First of all, it should be clear that in order to fight a price war, the price of 10,000 homes is not necessarily lower than that of Gome, but the sales volume must be larger than Gome, and its core is small profits and quick turnover. To achieve this, we must not blindly reduce prices and fall into the quagmire of price wars, but use means to fight back while reducing prices.
Taking this as a benchmark, Li Ran summed up three measures after discussing with various vice presidents, in order not only to face the battle, but also to fight back.
The first is to rely on Wanjia's own after-sales system to bring forth the new, on the basis of the original warranty to propose a seven-day replacement of 30-day warranty after-sales service. Not only that, the follow-up after-sales service has also withdrawn from paid door-to-door maintenance to solve customers' worries. Originally, Li Ran planned to advance such an after-sales service model step by step and gradually create a sales concept of high-quality service, but now Gome has set off a price war to be a price butcher, and it can't be hidden.
As the name suggests, the seller and the manufacturer reach an agreement on a product in a certain area, purchase products in bulk from the manufacturer at a very favorable price, and then sell them at a price far lower than the market price, so as to achieve large-scale sales of the product in the short term. To put it simply, it is "underwriting".
The administrative center will come forward to negotiate with various manufacturers as soon as possible, purchase at a lower price, and then ship quickly, so that the market tends to be saturated and the funds are returned. The market share of the home appliance market is fixed, generally speaking, unless it is replaced on a large scale, the product cycle is very long, as long as Li Ran sells out his products, he will not have a chance to sell them even if he sells them at cost price.
If the first two are a positive response to Gome's price cuts, they are only tactical. Then the third is a side detour and a comprehensive victory from a strategic point of view. At the same time of confrontation in the Yanjing market, Li Ran will fully open branches in first-tier cities to seize the market with lightning speed. When the Yanjing market decided the winner, Gome turned his head and saw that he was already embattled, so he asked him if he was not desperate.
In this way, with a three-pronged approach, Li Ran believes that no matter how powerful he is, he will not be able to compete with Wanjia for the Yanjing market, and then Wanjia will lead all the way, even if Gome can still struggle, it will never be Wanjia's opponent.
After setting the strategy against Gome, it is not over, the strategy is implemented on the one hand and on the other. Whether it is with the new after-sales service system or with the manufacturer to negotiate, all aspects involved are not a moment and a half can be solved, need to be considered in the long run, and the urgency is not urgent.
In addition to Gome's affairs, Wanjia has two main issues in recent times, one is recruitment, to make up for the staff gap of the head office and Yanjing branch, and the other is the unified procurement of logistics service vehicles for each branch. Li Ran was quite satisfied with these two things after listening to the reports of Huang Yanzong and Wang Lihui, because the overall progress was very good.
Because Huang Yanzong is in charge of the recruitment work for the time being, recruitment notices have been published in major newspapers, and the first round of interviews will be held this Wednesday. In principle, the management mainly looks at ability, that is, at least those who have experience in management positions in state-owned enterprises and foreign enterprises. Half of the general staff are recruited from recent college graduates, and the other half are recruited with work experience.
Vehicle procurement is negotiated by Wang Lihui and Changhe Company for large-scale procurement, not only Yanjing and Shangjin branches, but also for Songjiang branch in advance. At least 30 vehicles are needed for three branches, which is an expense of nearly 1.5 million.
In this way, funds may be a little tight, and the expansion of companies during this period cannot be stagnant, but must continue to develop. Therefore, we can only hope that the profitability of each branch will catch up, otherwise Wanjia's current development speed will definitely slow down, and Gome's goal will be achieved, which Li Ran can't bear. Therefore, before the meeting, he solemnly told the five vice presidents, telling them that during this time, they must be energetic to deal with the current severe situation, and no matter how good the strategy is, people must implement it, but people are the most uncertain factor, and they must do a good job of mobilization in advance.
After the meeting ended, Li Ran sat in the conference room with a somewhat depressed feeling, and Gome's price war still made him very bored in the end. 95 years ago, this period was actually the golden period of the rapid development of the home appliance industry, which was not a long time, and Gome's price war vividly lowered its profits a lot. Since then, it has faced overcapacity and a cold market, and has stayed away from the word profiteering. In the past, it was to fight for price, and in the future, it can only fight for products and services, because everyone can only make meager profits, and there will be no more days of lying down to make money.