Extraordinary Genius - Chapter 314 – Get Sony out of China
It was early August, and AIWA sales had reached a new height. With their new product launched in the market, their market share became bigger. The threat towards Sony was more significant.
Norio Ohga had already suggested to the board to stop the alliance with AIWA. This way, they could stop AIWA from growing.
Their alliance was set up to set the industry standards for the market, production and share the sales channels, transportation, raw materials, technologies and set the pricing.
Sony had an advantage with this alliance. For the past two years, Sony had been dragging AIWA along. But this year, AIWA will be on par with Sony. What about next year? AIWA will be overtaking Sony?
Although stopping their alliance agreement, Sony will suffer some losses and might let their competitors, like Panasonic, to grow. But those were not important and might not even happen. The most important thing right now was that AIWA was developing quickly and was a threat to them.
The board discussed Norio Ohga’s suggestion, and in the end, the board decided to check with AIWA first. If AIWA does not give in to them, then they will stop their alliance and target AIWA!
Even though Walkman held a considerable percentage of Sony’s revenue, but Sony was also involved in other businesses. They could afford to let one of their business to make some losses. But AIWA was different. AIWA only have Walkman and related products. Once this industry was hit, then AIWA will be a debt-ridden company just last few years ago.
“What did you say? Sony wants to stop the alliance?” Feng Yu received a call from Heitaro Nakajima. Feng Yu frowned as he never expects Sony to be so shameless!
But Sony was the one who started this alliance and AIWA at that time was still owned by Sony. That’s why the conditions benefited Sony and Sony does not need to make any compensations for breaking this agreement.
But this will affect AIWA a lot. Although AIWA will not need to start from scratch, their sales channels will be affected. Their production cost will also increase, and their profits will reduce by a lot.
Heitaro Nakajima sounded dejected. He never expects Sony to do such a thing. It was a double-edged sword, and Sony was willing to make losses to stop AIWA from growing.
“Sony stopping the alliance, then can we still use Sony’s sales channel?”
“We can still use those sales channels. But our transportation, sales, production, warehousing, technologies’ R&D cost will increase. Especially for our new products. It will significantly lower our profits and sales.” Heitaro Nakajima said.
“Then do we have our own channels? Will it affect Sony?”
“Yes, we do have. For example, our factories all over the world had overtaken Sony, and our technologies R&D are better than Sony. Also, in the Asian market, with the help of Hong Kong’s Aiwa company, we have more than 50% market share in the region. This was previously Sony’s market.”
Feng Yu made some mental calculations. Sony had paid a considerable price by breaking this alliance. This meant that AIWA’s growth had greatly threatened Sony.
But in his previous life, Feng Yu had seen such things happening before. Many MNC in the same industry would form alliances to share resources. But once one party felt that they were not getting the most out of the coalition, and wanted better conditions, the agreement would be over.
In the end, it was all about profits. In business, there are no enemies or friends. There are only profits.
Since Sony was shameless first, then let’s see who will lose out more. Anyway, AIWA needs to grow and have to compete with Sony head-on sooner or later. Feng Yu felt that AIWA will be the future juggernaut in the electronics industry. How can AIWA be beaten by Sony in the Walkman market?
You want to stop this alliance? Then I shall let you know that your losses will be much higher than AIWA!
Next year, Sony’s electronics will be hit by another blow. Their collaboration project with Nintendo will fail. This will result in Sony making losses in the Video game market. Nintendo will be getting all the benefits.
Sony breaking up with AIWA now, but they did not expect in the future, Nintendo will be doing the same to them.
Of course, two years later, Sony will develop its own flagship video game product. PlayStation. However, how much will Sony lose within these two years? If during this period, AIWA approach Nintendo and work with them?
What does AIWA have? Technologies and market. Maybe in the video games console R&D, AIWA was not that great. But AIWA has the Chinese market. Feng Yu believe that in one year’s time, AIWA will be the electronics market leader of China!
Nintendo products were extremely popular all over the world. But in China, they were progressing slowly. It was not because their products were not good. It was because of piracy and counterfeits.
Nintendo’s console was profitable, but the most profitable were the game cartridges. In China, the “The Little Tyrant” game console would be launch this year. It was much cheaper than Nintendo’s console and was compatible with Nintendo’s game console. Nintendo could not penetrate the Chinese video games market was because of this product. A “The Little Tyrant” console and pirated gaming cartridges would cost much cheaper, and it was this product that kept many video games MNC outside of China.
But the “The Little Tyrant” was still starting, and it was not as popular as the future years yet. “The Little Tyrant” was popular because it was cheap and their advertisements on CCTV. In another 2 years, Jackie Chan will be endorsing this product, and that will be the time where it established its position of number one gaming console in China.
But in this life, Feng Yu will not let them have the chance. China’s number one electronics company can only be AIWA!
Feng Yu told Heitaro Nakajima to speak to the President of Nintendo about collaborating and to develop the Chinese market together. Nintendo might not agree now, but when AIWA becomes China’s number one electronics brand, they will surely change their minds.
Now, Feng Yu want to make AIWA the number one electronics brand in China. First, he must push Sony out of the Chinese market!
“Eh, have you heard the news about a Senior management staff insulting China? Damn. He thought it was still decades ago? Even if it was a few dozen years ago, when those Japanese invaded China, they were also chased out by us. Now, they still dare to be so arrogant!”
“Ah? Those Japanese are too much. Should we protest?”
“What protest? I heard that Sony wants to enter the Chinese market. They want to stop our electronic industry from developing. We should boycott Sony’s products and let their products sit on the shelves!”
“Yes. We should do this. We will boycott Sony’s products and chase Sony out of China!”
On the streets, Feng Yu heard two young men talking about this. Feng Yu smiled. The youths nowadays were too xenophobic. He had only let his dealers spread some rumors within the schools in their region, and he did not expect these rumors to spread so fast.
Sony’s targeted segment were all these youths. Now, even their targeted market segment was going to boycott them. Sony will no longer be able to stay in China!