When the group was walking into the heat treatment workshop, the administrative manager called to say that someone surnamed Dong had taken a taxi over and specifically asked to see Liu Jun. Shortly after, Liu Shitang came in with a business card, telling Liu Jun to step back and go receive the person surnamed Dong. Liu Jun looked at the business card, half in English, half in Chinese, with the full name Dong Qiyang. Liu Shitang whispered in his ear that Dong Qiyang was precisely the newly appointed general manager of Shi Yiji, and he had come alone by taxi rather than driving his car, which must have a reason. Liu Jun was shocked and left his father to deal with the old master while he went to meet Dong Qiyang.
Dong Qiyang was about forty years old and could be described as ugly – protruding forehead, thick lips, his entire person dry and thin, yet he had a pair of eyes that sparkled with sharp light and a face full of amiable smiles. Dong Qiyang’s manner of speaking was also very easygoing. He placed his palm on the concrete block that the project manager had given Liu Jun, smiling as he said, “Mr. Liu? Pleased to meet you, pleased to meet you. Why do you have a big block of concrete on your office desk?”
“The construction company gave me such a large gift to use as a paperweight.” When the two men’s hands clasped together, both could feel that Liu Jun’s hands had extremely rough skin while Dong Qiyang’s hands had delicate skin. Standing together, Liu Jun was a full head taller than Dong Qiyang.
Dong Qiyang continued smiling as he asked, “The construction company giving a concrete block – isn’t that the same meaning as putting a bullet in an envelope?”
“Hehe, they’re not straightforward enough, not like your company’s Mr. Yang, who dares to act boldly. Does Mr. Dong drink coffee? I have some small-grain Arabica beans I bought in Hong Kong half a year ago, though the aroma has mostly escaped by now. Haha. Is Mr. Dong looking for me because he wants to get back the four skilled workers I poached?”
“Hehe, Shi Yiji has an abundance of talent, we don’t lack those four. Those four, from what I understand, aren’t among the most technically advanced people in the branch factory.”
“That’s correct. But these four are the most meticulous and thorough workers I encountered when I was doing processing work at Shi Yiji. As skilled workers, they are the most excellent. They’re also willing to come work for me. I pay all my employees four types of insurance, one more than your company – the housing provident fund. The wages here are currently temporarily on par with Shi Yiji.”
Dong Qiyang was surprised and pondered, “You’re being so frank – aren’t you afraid I’ll poach them back?”
“You can’t poach them back. After just one interaction with me, they clearly understand that as long as they produce results, they can gain recognition and receive the treatment they deserve. It’s just that simple. Your Shi Yiji simply doesn’t have this kind of corporate culture. I find it very strange – Mr. Dong surely didn’t come looking for me today for business reasons.”
“It’s neither purely business nor personal. I just heard Mr. Wang and others mention you as soon as I arrived at Shi Yiji, saw the products you developed, and always wanted to get to know you. But Mr. Yang doesn’t want me to associate with you. Please don’t be hostile – I wouldn’t stoop to coming here to do something as lowly as industrial espionage. I just want to make friends. I’ve always been in charge of sales in this industry, but I’ve always gotten along well with technical personnel. Can you take me to see your workshops? I already saw the initial framework when I came in.”
“Miss Yang has contacted me many times. I apologize that since starting construction, I’ve been living on the construction site and haven’t left the site one step for non-business matters, so I haven’t had time to visit Mr. Dong first. I’m a perfectionist when it comes to quality, so I have no choice but to keep watch on the construction site almost without sleeping or resting. This way, please, Mr. Dong. Tengfei’s current progress far exceeds Shi Yiji’s new branch factory.”
“Our progress has reached my expectations,” Dong Qiyang smiled, neither humbly nor arrogantly. “An elephant’s movements are inevitably a bit clumsy, but the food it ultimately gets to eat may not necessarily be less.”
“What about quality?”
Dong Qiyang’s expression became serious, not because of Liu Jun’s question, but because he saw the entire newly constructed workshop. Today was a cloudy day, yet the workshop interior had sufficient lighting with good natural illumination. Having traveled extensively in business and seen much of the world, he knew quality when he saw it. The meticulous attention to detail in the workshop before him showed that Tengfei Company’s construction had thoroughly implemented Liu Jun’s intentions. “May I ask Mr. Liu, what’s the approximate construction cost per square meter of the workshop?”
Liu Jun smiled, “It’s not higher than Shi Yiji’s new branch factory’s budgeted cost. But I have many more additional facilities here than Shi Yiji. The purpose of all these additional facilities is singular: energy conservation and consumption reduction. That is, to reduce future operating costs. Mr. Dong, Tengfei, will become Shi Yiji’s most formidable competitor in two months.”
Dong Qiyang laughed, “I’m not worried, hehe. This market is very large. The market share of both our companies’ products in this market is extremely small, completely unable to form competition, but can form a cluster effect that benefits both parties.”
Liu Jun did not attempt to hide his intentions, “Our products are completely unable to form competition, but talented people in this big market are limited. Please forgive me for continuing to poach from your company in the future.”
Dong Qiyang retorted, “So far you haven’t poached away a single engineer, which makes me feel completely at ease.”
Liu Jun opened his mouth but didn’t speak. It wasn’t that he hadn’t tried to poach them, but that he hadn’t taken a liking to any. According to Mr. Wang, Shi Yiji used to have several decent young engineers, but with the frequent changes in leadership over recent years, everyone had fled seeking other opportunities. Later, the two men only discussed aspects related to workshop construction. Dong Qiyang saw the prototype of the rainwater collection and reuse system, saw the prototype of the cooling water curtain in the heat treatment workshop, saw the prototype of the workshop dust collection and water curtain dust removal facilities… Dong Qiyang didn’t understand technology very well and couldn’t fully comprehend the operating methods of these seemingly unimportant facilities, but Dong Qiyang was someone who could calculate costs precisely. If what Liu Jun said was true-that Tengfei Company’s construction cost per square meter was lower than Shi Yiji’s, this meant the fixed asset investment wasn’t high, future unit depreciation wouldn’t be higher than Shi Yiji’s, while these energy-saving and consumption-reducing facilities before him would genuinely reduce future operating costs with real money. If competition truly developed between Shi Yiji and Tengfei, the cost advantage had already been determined. Shi Yiji had almost no competitive strength to speak of. Could this be the reason Liu Jun said their products couldn’t form competition?
Before coming, Dong Qiyang already knew about the conflict between Yang Xun and Liu Jun. Being a perceptive person, seeing that Yang Xun’s Shi Yiji new branch factory and Liu Jun’s new Tengfei had started construction at almost the same time, he always felt there must be some connection, and the conflict between Yang and Liu might not be over yet. As Shi Yiji’s new person in charge, he naturally found it very necessary to conduct some investigation and assessment: would that bloody conflict explode over his head, and in what manner would it explode? Know yourself and your enemy, and you’ll never be defeated. Now, in terms of construction speed, Tengfei was almost twice as fast as Shi Yiji’s progress; in terms of architectural design perfection, Tengfei surpassed Shi Yiji in practicality and energy efficiency; in terms of construction quality, though not obvious, Dong Qiyang felt enormous pressure. He believed that not only would he make comparisons, but other industry professionals would also compare, and Yang Xun would soon know the results of the comparison. Two people bearing huge conflicts who would also be nitpicking with each other – would he, Dong Qiyang, be squeezed in the middle like a mouse in a bellows?
But when Dong Qiyang walked out of the workshop and followed Liu Jun to the temporary shed built with a few steel pipes and asbestos sheets to get the car, then looked back, he saw that the workshop on the vast site was unusually small and compact. Its size and presence couldn’t compare with Shi Yiji – even the larger metalworking workshop wasn’t as long as the office-cum-dormitory building laid out horizontally. Dong Qiyang smiled secretly to himself and relaxed. Tengfei and Shi Yiji were simply incomparable. As for Liu Jun himself, Dong Qiyang thought this person was too direct and impulsive, not good material for managing a manufacturing enterprise. With this thought, Dong Qiyang relaxed.
Tengfei’s new location was in a remote area – easy to get in, hard to get out. Liu Jun planned to drive Dong Qiyang into the city. Seeing Dong Qiyang standing behind the car, squinting as he gazed intently at his two workshops, he couldn’t help but stand from Dong Qiyang’s perspective to look at his own company. “Mr. Dong, it’s very small, isn’t it?” Seeing Dong Qiyang realistically nod, he liked this honesty. “Don’t look at how small it is – currently, the purchased equipment can only fill less than half of the indoor space. Insufficient funds, not like Shi Yiji’s abundant strength.”
Dong Qiyang shook his head, “Shi Yiji’s two shareholders have abundant strength, but the funds available to me are insufficient. Moving the city workshop to the suburbs, the vacated land is being developed by the two shareholders. The land price difference wasn’t entirely given to me for factory operations. I’m more difficult than you – every day I’m robbing Peter to pay Paul.”
“No wonder the construction progress is at least half as slow as mine. Construction sites operate on money talks.”
“Money talks everywhere.” Since he no longer viewed Liu Jun as an opponent, Dong Qiyang fully displayed his magnanimity. “I heard… a company has already beaten you to it and developed a complete series…”
“Yes, my university classmate’s company. They bought blueprints for one variety from my series, then, without any doubt, creativity, or improvement, copied out a series of low-end products.”
“But those low-end products are cheap, and their performance has significantly improved over the past, and can meet certain requirements. From what I understand, the market response is quite good. There are still quite a few domestic enterprises willing to accept these cost-effective products. We’re also preparing for mass production.”
“I also know you bought a complete set of blueprints from an American company, planning to enter the engineering machinery. Mr. Wang will surely be able to quickly establish the process, but it’s a pity to waste Mr. Wang’s skills. So I say, we can’t form competition between us.”
Only then did Dong Qiyang understand the reason Liu Jun had said earlier that the two companies couldn’t form competition. He couldn’t help but find it both funny and exasperating – this kid did not attempt to hide his arrogance. “I’ve been in sales for many years. I can give you a hypothesis – you judge whether this possibility might occur. Market demand is pyramid-shaped. High-precision, cutting-edge products are positioned at the market’s peak, but demand isn’t large. The largest portion is mid-range demand. The mid-range market has always maintained a dynamic balance between quality and cost. When barely passable products appear on the market, first, a large portion of the share that originally belonged to the high-end market gets taken away. Then, downstream manufacturers use these barely passable products to produce consumer goods. Consumers have limited judgment ability. Since there’s no major difference, consumers are naturally very willing to accept them. The cost-performance ratio is much higher than either the original inferior products or high-precision products, so sales of barely passable products are astonishing. Finally, astonishing sales feed back to upstream manufacturers, who expand production volume. Fierce competition develops among upstream manufacturers, ultimately leading to significant price drops due to competition and economies of scale. Thus, the final products have even higher cost-performance ratios, broader audiences, and further encroachment on high-end market share. High-end products at this point often find themselves in the lonely heights, with too narrow an audience. Costs never come down, so they lose even more market share. Sometimes they’re forced to lower their standards for survival. This phenomenon, in our industry jargon, is called bad money driving out good money. If you don’t believe it, just wait and see – facts speak louder than eloquence.”
Dong Qiyang’s speech wasn’t fast, but every word was forceful and highly persuasive. Liu Jun stopped the car as he listened and waited until Dong Qiyang finished speaking. “The logic is completely sound.”
“Not only is the logic sound, based on my dozen-plus years of market experience, this situation has an extremely high probability of occurring in China.”
“What percentage?” Liu Jun pressed urgently.
“Ninety percent. We can bet on it – one yuan.”
Liu Jun was greatly alarmed and speechless for quite a while. When he came to his senses, he slowly started the car, having lost interest in the conversation. He had originally been completely confident, planning to make his mark with Tengfei’s new company using the remaining components from his product series. Practice had already shown that his research and development had returns. Therefore, the first batch of equipment he purchased was also primarily to meet the production requirements of these products. But if there was a 90% probability Dong Qiyang described, then where would he recover his investment? Where would Tengfei’s profits come from after entering production? Could it be that to take revenge on Yang Xun, he had sold his design blueprints cheaply and ended up shooting himself in the foot? Liu Jun was so depressed that his ribs began to ache faintly.
As the car entered the city area, the roads gradually became lively. Dong Qiyang had Liu Jun stop the car – he would take a taxi from here. He didn’t want his contact with Liu Jun to leave a bad impression on his boss’s mind, after all, his position wasn’t quite secure yet. When getting out of the car, he said amicably to Liu Jun, “Mr. Liu, I’m new here and unfamiliar with people and places. If I have anything I don’t understand or need to consult Mr. Liu about in the future, I hope Mr. Liu will separate me from my boss, hehe. Speaking of which, Mr. Liu, we complement each other. If you have any difficulties with sales in the future, feel free to find me. The mobile number I gave you is for a few close friends only.”
“Thank you, I’ll consult you in the future.” Liu Jun hesitated, then asked, “So does Mr. Dong think highly of the blueprints bought from America?”
Dong Qiyang shook his head, “I’m a professional manager. The two major shareholders’ requirement of me is to profit as quickly as possible. Buying American blueprints is a choice with relatively high cost-effectiveness.”
Liu Jun hesitated again, then said, “Actually… the machinery manufacturing industry can’t tolerate quick success and instant benefits.”
This time, Dong Qiyang nodded. “Do you know why I sought you out? All this physical data you have from different treatments – it’s all treasure. When I was at a foreign company, this data… don’t even mention it, we Chinese staff couldn’t even access it – it was all locked away in safes for filing. The path you’re taking is correct, and I wanted to get to know you. But so far, you pose no threat whatsoever to Shi Yiji.”
Liu Jun watched Dong Qiyang take a taxi and leave, remaining motionless for quite a while. He had been struck at a vital point by this expert, Dong Qiyang.