Extraordinary Genius - Chapter 604
Chapter 604 – Partnership with Quanjude (Part 1 of 2)
Band-aid noticed that their market share was declining. BingCity Pharmaceutical Enterprise was quite aggressive in their marketing efforts.Not only they were advertising everywhere, but they were also trying to damagetheir branding. The concept of Band-aid = Plasters which they built over theyears was shredded to pieces.
But luckily for Band-aid, their brand’s influences were noteasily removed from the consumers’ minds. They do not even need to do marketresearch to know that their plasters were still the first choice of consumers.
But little do they know that the village market segmentwhich they had been trying to develop was taken over by Bing CityPharmaceutical secretly. They had lost their advantage of controlling thismarket segment.
Even the roadside promotions which the management ofBand-aid thought it was a joke, had caused their sales to decline. But themanagement of Band-aid firmly believes that Bing City Pharmaceutical could notdo these promotions forever and will never be a threat to them.
This period, Feng Yu did not plan new marketing activitiesfor Bing City Pharmaceutical. The current strategy was the best he could comeup with. Feng Yu was now in Beijing speaking to the Beijing City Governmentleaders about his partnership with Quanjude.
The Fu Family was very efficient. Within a short time, theyhad bought over popular restaurants in many countries and cities, likeSingapore, Malaysia, Macau, Hong Kong, New York, Sichuan, Hangzhou, Jinlin,etc.
The restaurants they bought had good reputations, and eachof them had their own specialties. They were also located in good locations.
With all these reputable restaurants forming a partnershipwith Quanjude was what the Beijing City Government wanted. They do not wish tosee those restaurants affecting Quanjude’s reputation.
But there was a problem. After those restaurants combinedand formed a company, the company was worth much higher than Quanjude!
If they were to form a partnership, then Quanjude willbecome a small shareholder. Feng Yu wanted this partnership to create arestaurant chain and make use of Quanjude’s brand and roast ducks to expand andincrease the profits.
But Feng Yu will never give up the controlling shares of thecompany!
The Beijing City Government allowed Quanjude to be ashareholding and let individuals invest in it. The individuals even includefunds from Hong Kong. But this was on a condition that the government stillholds the majority of shares and had the full control of the company. They donot want others to have control over Quanjude.
Even if the government held the majority of the shares, butif the other shareholders combined their shares, they would take full controlof the company. Quanjude will be fully privatized!
“Mayor Liu, we had agreed on the terms and had signed theletter of intent. It is not stated that if my restaurant’s overall value ishigher than Quanjude, this deal will not go through. This was what you allwanted, and we tried our best to increase our scale to better increaseQuanjude’s brand. We had done it, and now you are blaming us for that? Isn’tthis unreasonable?” Feng Yu was pissed.
Of course, the Fu family did not intend to buy therestaurants in China at first. Feng Yu was the one who suggested it. Feng Yujust want their restaurant enterprise’s value to be much higher than Quanjude.
Feng Yu and Fu Guangzheng both knew that on paper, theirrestaurants’ total value was much higher than Quanjude. But if Quanjudeincludes their brand value, they will still be higher.
However, Feng Yu and Fu Guangzheng will not let the BeijingCity Government knows about this. This Deputy Mayor Liu was not Zhang Ruiqiang.Feng Yu will not give up the opportunity to take advantage of him.
“That’s what we said, and it was stated in the agreement.But your restaurants’ value should not be so much higher than us. If we stillwant the controlling stake, we will have to invest an additional 100 millionRMB? If we had the money, why should we work for you? We can expand ourselves.”Deputy Mayor Liu frowned and said.
2 F&B companies had approached Quanjude before. One ofthem was a Sichuan company, and it was a shareholdings company where the stateowned the majority of the shares. The other company was a partnership company,and it was a private enterprise.
These two companies were quite influential. But compared toFeng Yu and the Fu Family, it was still considered small. Even if bothcompanies combined, the total value still cannot be compared. After all, therestaurants bought by the Fu Family were valued much higher than China’srestaurants. Also, because of Feng Yu’s instructions to acquire the restaurantsfast, the Fu Family paid a premium price for those restaurants.
Feng Yu had expected this. If he was major shareholder ofQuanjude and someone wants to buy the controlling shares, he will also notagree to it.
Feng Yu had discussed with Fu Guangzheng on how to getBeijing City Government to agree to their partnership. Their solution was toexpand the scale further and increase the number of shareholders. Also, theyhad to show their support for the City Government and let them hold the positionof Chairman.
Feng Yu and Fu Guangzheng do not have experience in managingF&B companies. They only want to make money. So, as investors, they onlyneed to attend the shareholders’ meetings and sit back and collect the profits.
Of course, Feng Yu and Fu Guangzheng will not be stupid togive up all their shareholders’ rights. If the City government let an idiot tolead the company, they must have the right to veto.
“Mayor Liu, I think this issue is easily solved. I heardthat when we approached the Quanjude company, two other companies wereinterested in investing in Quanjude. Why not we rope them in for thispartnership?”
“Let them invest too? We have almost 20 restaurants, and ifwe let them in, it will be almost 40 restaurants. Will the scale be too big?”Deputy Mayor Liu was worried that it will not be easy to manage, and they donot have so many roast duck chefs. If this fails, it will be a disaster forQuanjude.
“Mayor Liu, we are only forming a partnership to increasethe brand reputation of Quanjude. All of the restaurants involved were profit-makingbefore this venture. After the partnership, Quanjude and Beijing CityGovernment will have no losses. Also, after this partnership is formed, both ofus will support the person assigned by the Beijing City Government to be thechairman of the board!”
Fu Guangzheng also expressed that he was on the same page asFeng Yu.
Mayor Liu was quiet. If the City Government could be theChairman, then they will have control over the company’s strategy anddirections. Also, after this partnership, Quanjude will become China’s biggestrestaurant chain, and the headquarters was in Beijing. The annual tax revenuewill be a large sum.
But at the same time, Mayor Liu was worried. Beijing CityGovernment will own lesser shares. Feng Yu still suggest giving the restaurantmanagers and the top management of Quanjude some shares as a reward. This was ahard decision to make.
“Mayor Liu, after this partnership, Quanjude Company’s valuewill not only be the highest in China. It will be the highest in Asia! You arethe one who brings about this Asia number 1 restaurant enterprise. Also, the headquartersof this large company is in Beijing. Have you ever thought of this?” FuGuangzheng suddenly said.
Asia number 1?
Deputy Mayor Liu was attracted by this……. Agree or disagree?
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