Extraordinary Genius - Chapter 722
Chapter 722 – Merger
Buy me a coffee or tip me on or .
Zhang Ruiqiang made up his mind very fast. It was notbecause he was more decisive than Secretary Xu. It was because Bing City’spopulation was only about 26% of the whole Longjiang province, but the taxincome was more than 43% of the whole province!
This means that the rest of the cities in the provincescould not achieve what Bing City had achieved. Furthermore, Bing City was adesignated planned city and had more independence than the rest of the cities.They could make a lot of decisions without interference by the ProvincialGovernment or consulting the higher-ups.
Feng Yu said to let the companies increase their workers’salaries to lower their resistances to social security insurance. This wouldincrease the implementation of this policy. Bing City could use this method.
Bing City also could implement both the companies’ insuranceand social security insurance together. After all, Bing City’s industries weregrowing faster than expected. They were already ahead of the rest of the citiesin China.
Bing City Machinery Company, Bing City PharmaceuticalEnterprise, Bing City Aviation Factory, and even the textile mills wereachieving outstanding results.
Bing City was developing at a fast pace, and the localgovernment had more than enough funds.
But Secretary Xu could not make the decision. There weremany regions in Longjiang province that were still in poverty. Many companieswere still not doing well and were struggling to survive.
The taxes collected from those struggling companies werevery little. If Secretary Xu followed Feng Yu’s method to pacify the workersand introduce the social security insurance policy, there would be moreproblems. The taxes paid by those companies will be much lower than before.Then the provincial government will not have sufficient funds for otherprojects.
To implement one policy at the expense of other projects?Can this even be considered a success?
The best solution was to increase the economy of the wholeprovince as a whole. If everyone could earn more money, this will not be anissue. But this was harder than said.
When both Zhang Ruiqiang and Secretary Xu were deep inthoughts, Feng Yu was sipping on his tea casually. He had said too much and wasgetting thirsty.
Zhang Ruiqiang could tell Secretary Xu had difficulties ifhe were to follow Feng Yu’s suggestions. He wanted comfort Secretary Xu when henoticed Feng Yu drinking his tea happily. He remembered that this subject wasbrought up by Feng Yu and he should have the solution to Secretary Xu’stroubles?
You have the solution and don’t want to tell us? Do youreally like to see us feeling troubled?
Zhang Ruiqiang cleared his throat. He was hinting to Feng Yuquickly tell them the solution.
“Feng Yu, since you mentioned this, then you should have asolution, right?”
“Yes. Just increase the income of those companies, and theywill be able to increase the salaries of their workers.”
Damn. Stop stating the obvious. What I want to know is howdo you increase the income of those companies?!
Feng Yu saw Zhang Ruiqiang’s angry expression and slowlysaid. “There is an easy solution. But I am not sure if Secretary Xu could pullit off. This solution will offend a lot of people, especially the other cites.”
Secretary Xu frowned and looked at Feng Yu. “I am not afraidof offending others. We can’t please everyone. As long as this solution is forthe good of the people, that’s enough. But what do you mean by the other citieswill be offended?”
The other cities should be happy if the income of thosecompanies were increased. They will be able to receive more taxes from thosecompanies and will be able to use those taxes for more projects. This will bepart of their cities’ achievements. Why would they be offended?
Feng Yu did not give Secretary Xu an answer straight. Heasked Secretary Xu back: “Secretary Xu, what do you think of my companies’products? Why are my products making high profits and the consumers stillprefer them?”
Secretary Xu thought for a while: “Is it because of thequality of your products or the designs? Or maybe it is because of theadvertisements?”
“What you mentioned are all parts of the reason. Forexample, our humidifiers and bladeless fans. The exterior designs are notconsidered new and other brands had caught up with our product’s quality. Ourproducts are still selling well after we lowered the frequency of ouradvertisements. Our selling prices are even higher than the other brands. Why?”Feng Yu continued asking.
Zhang Ruiqiang blurted out a word: “Branding!”
Feng Yu gave Zhang Ruiqiang an approving look: “That’sright. It’s the brand effect! I will explain what a brand effect is. It isconsidered the extension of a company’s value. Which is to say that the brandwill increase the value of a product.”
Seeing Secretary Xu still could not fully understand what hewas saying, Feng Yu thought for a while and gave an example: “If there is aproduct and I printed an imported label on the product, lots of people will bewilling to buy the product even if I increase the price by 10%, 20% or evenmore. This is because people’s impression of imported goods is better thandomestically produced products. Also, in China, there are lots of factoriesproducing agriculture machinery other than Bing City Machinery Company. But forthe same tractor, why Bing City Machinery Company can price it higher thanother companies and still able to achieve better sales than them? If you wereto compare both tractors, there is not much difference in the quality.”
“This is the effects of branding. Consumers know about ourbrand. They know that we are a could wide brand and have the best technologiesin China. They also heard of our aftersales services. If you look at roast duckrestaurants, why is Quanjude more expensive than Bianyifang Roast Duckrestaurants? Bianyifang has a longer history than Quanjude, but becauseQuanjude roast ducks were featured in the national banquet. Many people do noteven know that Bianyifang started out selling roast ducks. Even when thecustomers saw the roast ducks in the Bianyifang’s menu, they will not order it.But when customers step into Quanjude, they will surely order the roast ducks.Simply put it, in accounting, brand value is considered an intangible asset. Itis the company’s asset, which lacks physical substance.”
Luckily Feng Yu had learned about these. If not, it will behard to explain this to Secretary Xu. Feng Yu used examples and some economicjargons which confused Secretary Xu. At Secretary Xu’s age, he had never learnedabout all these in schools. Although he does not understand the words used byFeng Yu, he understood the examples.
Secretary Xu sighed in his heart. Feng Yu could become sosuccessful, was not by luck. He was really knowledgeable. Secretary Xu hadnever heard of these things before. There were economists among hissubordinates and advisors, and they also know about all these. They can evengive a more in-depth explanation.
But they knew Secretary Xu would not be able to understandall these and did not mention about this knowledge. This was why Secretary Xuwas impressed by what Feng Yu said.
“You are saying that we should ask those companies to buildup their brands? How should they start? Advertisements?” Secretary Xu asked.
“Build up their brands? It is too troublesome, and there isnot enough time. We already have a strong brand, why are we not using it?”
“We have a strong brand? What do you mean?”
Feng Yu laughed and said a word which was familiar to bothSecretary Xu and Zhang Ruiqiang. “Merger!”
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