Back to the teenage years

Chapter 541 Towards Greatness
The lunch that Zhang Yunqi hosted for Liu Jinshi was held in a private room in the employee cafeteria at the Aihua production base.

Right now, there are many differences in the cooperation between the two parties, and it seems that there is no way to reach a consensus on the core interests involved. However, even if the deal fails, there is still friendship. In the Chinese VCD player market, it is impossible for both parties to ignore the existence of each other. So the meal was still good.

After eating and drinking, Zhang Yunqi sent Liu Jinshi out.

Before getting in the car, Liu Jinshi shook Zhang Yunqi's hand and said with some emotion on his drunken face: "Thank you for your hospitality, Mr. Zhang. In fact, regardless of whether we can reach a cooperation, I have gained a lot from this trip to Jiangchuan. I feel honored to meet a young talent like you."

Zhang Yunqi watched Liu Jinshi get into the back seat of the Audi and said with a smile, "Since Mr. Liu has said this, if you trust my judgment, I can give you a word of advice."

Liu Jinshi said, "Please speak, Mr. Zhang."

Zhang Yunqi said: "Sony's investment in marketing and channel construction in the Chinese market this year will be huge. It is foreseeable that Sony will significantly improve its product market exposure and sales network through extensive advertising and channel cooperation. Its VCD movement's price advantage and the strategy of binding technology licensing will surely enable it to be adopted by more VCD player manufacturers, especially in the mid- and low-end markets. Although your company has advantages in technology and quality, its market share is not optimistic due to its high price and technical barriers."

Liu Jinshi thought for a moment and nodded, "This should be my third time meeting Mr. Zhang. In my impression, Mr. Zhang has never made a mistake in his market analysis. You are very good at taking advantage of the fierce market competition with your advanced foresight and keen sense of smell. Thank you Mr. Zhang for your kind advice."

Zhang Yunqi didn't know whether Liu Jinshi listened to what he said, but as Sony is Philips' biggest competitor, he would definitely conduct an in-depth investigation, especially regarding the cooperation between Aiwa Electronics and Sony.

This is enough.

Zhang Yunqi waved goodbye.

Liu Jinshi glanced at Zhang Yunqi again. Maybe he had drunk too much Maotai, but when the car window was slid up, he suddenly said, "Mr. Zhang, I can be sure that no matter whether Aiwa Electronics can succeed or not, Mr. Zhang will definitely have a place among the future trendsetters of China's manufacturing industry."

Zhang Yunqi laughed.

The windows closed and the black Audi drove away from the base.

Zhang Yunqi, Yang Jin, Liu Dongsheng and Liu Ming stood at the gate for a while and then turned back to the office building.

Liu Ming had been puzzled about the outcome of today's negotiations. Seeing that Zhang Yunqi didn't say anything, he hesitated for a long time, but finally couldn't help but ask: "Boss Zhang, is the cooperation... that's it?"

Zhang Yunqi said: "If it rains, it will rain. If my mother wants to get married, let her do it."

Liu Ming was stunned.

Zhang Yunqi turned his head and looked at him: "Many things are like this, and it can only be like this. If you don't have the courage to flip the table and break up, others will treat you like a persimmon! To be honest, is the price we offer bad? I opened such a large order for him under such great financial pressure, why? Liu Jinshi must be in a bad situation now. As for whether this is it, you can check whether you will renew the lease of the suite you opened for him in Yunbo International Hotel, and then it will be clear."

Liu Ming understood Zhang Yunqi's meaning and nodded in agreement.

Liu Dongsheng suddenly said, "By the way, Mr. Zhang, speaking of the problem of capital chain, I remembered that I have something to report to you."

Zhang Yunqi glanced at Liu Dongsheng and felt that he seemed to be in a particularly good mood. He smiled and asked, "Go ahead."

Liu Dongsheng considered for a moment and said, "Mr. Zhang, our company is still an enterprise that assembles complete machines. Although the investment in fixed assets is not low, our core technical capabilities are still restricted by others. The demand for working capital is particularly huge. In the past, we proposed a business model of payment first and then delivery. There is a time difference of about ten to fifteen days from payment to delivery. If the monthly sales volume is 100 million, we can extract 30 to 50 million in working capital from it."

Zhang Yunqi nodded.

Seeing Zhang Yunqi's approval, Liu Dongsheng continued, "The situation is different now. As the VCD player market becomes increasingly popular, more and more dealers are driving trucks with cash and checks to pick up goods. This means that the time difference no longer exists. The working capital we withdraw will be greatly reduced compared to the ever-increasing turnover. This has already brought great additional pressure to our capital chain, which needs to be resolved as soon as possible."

Zhang Yunqi nodded.

What Liu Dongsheng is talking about are objective and realistic problems.

Perhaps because of the unforgettable disaster at the Red Star Electronics Factory, Liu Dongsheng, the factory director, was particularly mature and prudent, especially sensitive to the dynamic balance of funds between production and sales. This was indeed the lifeline of a manufacturing company, and Zhang Yunqi seemed a bit too radical and adventurous in this regard, which made Liu Dongsheng particularly worried.

Speaking of which, the senior management of Aiwa Electronics are all young people in their twenties and thirties. It is very important to have a veteran state-owned factory director to control the production process that focuses on quality and stable safety.

Zhang Yunqi also knew that the negotiations between him and Philips for the super large order of 400 million yuan fell through this time. Liu Dongsheng breathed a sigh of relief. Although the provincial and municipal state-owned assets platforms jointly invested 50 million yuan in Aiwa Electronics, the expansion of the production base and the purchase of 200,000 sets of Philips movements and the labor costs on the production side basically consumed the money. Fortunately, the monthly shipments of VCD players on Hu Zhibiao's side increased month by month, which was able to recover some blood and allow the production segment that Liu Dongsheng was responsible for to maintain stable operation. However, if this super large order of 400 million yuan was implemented, it would inevitably have a huge impact on the production line and inventory, and the pressure on the capital chain would be even more unimaginable.

As for the question raised by Liu Dongsheng, Yang Jin had actually reported it to Zhang Yunqi when he was in Lizhen. He said, "Mr. Liu, what you are considering is indeed very important. Aiwa Electronics' monthly output needs to reach 100,000 units, and the company's working capital must reach at least 200 million. I have also discussed this with Hu Zhibiao several times. In order to ensure sufficient working capital, we must vigorously promote the channel dealer deposit system this year." Liu Dongsheng was stunned.

Zhang Yunqi added: "The current market margin system is divided into three categories. The agency margin for Category 1 cities is set at 5 million, Category 2 cities at 3 million, and Category 3 cities at 1 million. As for which cities should be classified into Category 1, Category 2, and Category 3, the specific operations will be handled by Hu Zhibiao's Aihua Electronics Operation Center."

Hearing this, Liu Dongsheng nodded and said, "Mr. Zhang has considered it very comprehensively. I overthought it. At present, the company's distribution channels are still being established very quickly. When this system is implemented, it will not be a problem to collect hundreds of millions of working capital."

Zhang Yunqi smiled, turned around and asked Liu Ming: "Boss Liu, how is the progress of your movement research and development?"

Liu Ming knew that this was the issue that Zhang Yunqi was most concerned about, and he immediately replied: "We disassembled the Philips CDM12, reverse-engineered and analyzed the mechanical structure and circuit design for independent research and development, but we did find a lot of problems."

Zhang Yunqi nodded: "You go ahead."

Liu Ming hesitated for a moment, but still said truthfully: "There are four main problems. First, it will be difficult to bypass Philips in the short term for core patents such as laser head focusing technology. Second, we are trial-producing the first domestic laser head. In order to maximize the cost-effectiveness of our self-developed movement and adapt to the domestic DVD player market, we adopt a low-cost material strategy, such as plastic instead of metal brackets. However, the test yield of the trial product is only 40%... This must reach at least 60% to be considered successful and can be mass-produced. There is still a long way to go."

Liu Ming glanced at Zhang Yunqi's expression and said, "Third, in order to prevent risks, we use domestic stepper motors and optimize the control chip firmware. This does effectively reduce power consumption and noise, but the servo motor control stability is still worse than the Philips solution. Fourth, some decoding chips (such as C-Cube's CL480) have compatibility issues with the experimental movement, resulting in screen distortion or freezes. The test repair rate is as high as 15%, and the average failure-free time is only 60% of that of the Philips movement..."

Zhang Yunqi was overwhelmed when he heard this, and took out a cigarette and started smoking.

He is not a technical expert and has no interest in these things. He only knows that the movement he spent a lot of money to develop for half a year still has a lot of problems.

Liu Ming added: "Of course, we have also gained something. Based on your suggestions, our R&D team has improved the algorithm around the super error correction function. Now the disk reading ability of the test machine is about 30% higher than that of the Philips movement."

Zhang Yunqi took a puff of his cigarette and said, "I want to ask a question. The current VCD player market is still mainly in first- and second-tier cities. Will the market capacity of first- and second-tier cities be saturated next year or the year after?"

Liu Ming thought for a moment and said, "It will probably be transferred to third- and fourth-tier cities and rural areas."

Zhang Yunqi nodded: "Yes, they will move to third- and fourth-tier cities and rural areas. But it's not a should, but a must!"

Zhang Yunqi took a puff of his cigarette and continued, "What do I mean by this? It is that it is difficult for us to produce high-end movements that match the performance of Philips CDM12. So we don't need to worry too much about this and waste a lot of resources and time. We can turn our attention to the countryside and find out what the core needs of the countryside for VCD players are. There are only three: wide voltage, super error correction and low enough price! Grasp these three points tightly, and there is no way around the optical focusing technology."

Zhang Yunqi paused, and then said, "As for whether Philips will sue us, the foreign devils are afraid of nothing! What's the problem with dragging the lawsuit for two years? Two hours ago, Liu Jinshi was still complaining that our government only helps relatives and not the people, but did the Eight-Nation Alliance talk to us about reason when they set up artillery batteries at our doorstep?"

Liu Ming exhaled. He already felt the pressure: "I will adjust my strategy as soon as possible."

Zhang Yunqi dusted off his cigarette ashes and said, "Get ready. Come with me to the capital in a while. We will work with the provincial and municipal governments to push the Ministry of Information Industry to set up a digital industry CD fund, provide subsidized loans, and connect with the Institute of Optoelectronics under the Chinese Academy of Sciences and Tsinghua University to expand Aiwa Electronics' technical team."

Liu Ming, who was feeling a lot of pressure, breathed a sigh of relief after hearing these words, and at the same time he felt a little excited. Aiwa Electronics' technical R&D team is composed of top optoelectronic students from South China University of Technology in Guangdong. It's not that they have poor abilities, but reverse development requires bypassing a lot of Philips' patents, which is extremely difficult. They really need the top domestic scientific research talents to join and provide them with new ideas to break through the barriers.

As they were talking, the four of them had already arrived downstairs of the office building.

Zhang Yunqi did not go in. He put out his cigarette and sat down on a bench next to the cherry blossom forest. The spring breeze blew, and cherry blossoms fell from the sky, which was magnificent.

Zhang Yunqi was in no mood to appreciate the beautiful scenery in front of him. He looked at the production workshop where the sound of machinery could be heard in the distance, then looked at Liu Ming and Liu Dongsheng, and said, "I suddenly remembered something. You two bosses have spent much more time in this factory than I have. You two know much more about the work intensity and living conditions of the thousands of workers inside than I do. I don't blame you for this. It's my responsibility as the boss. I have to take out a loan to solve this problem, but do you realize the root cause of this problem? For a DVD player, the money taken away by foreign companies for the movement, decoding chip and patent fees accounts for 40% of the cost!"

Neither Liu Ming nor Liu Dongsheng spoke. Cherry blossoms fell from the treetops and the air was filled with silence.

Zhang Yunqi took out two cigarettes and handed them to Liu Dongsheng and Liu Ming, lit one for himself, and said, "Boss Liu, you, as an expert, know better than me what is happening to China's electronics industry, which is blocked by foreigners. I am spending 400 million today for only one reason: I can make requests to Philips openly, instead of wagging my tail and begging them to increase their supply, and finally being forced to sign a bunch of unequal terms!"

At this point, Zhang Yunqi looked at Liu Ming and said, "Boss Liu, there is one thing I can promise you today. If you want money, I will give you money. If you want people, I will give you people. Even if I, Zhang Yunqi, cannot afford to eat, I will never lose a grain of rice in your scientific research department! Because this is the only way for Aiwa Electronics to become a great company!"

Liu Ming's hand holding the cigarette was shaking.

A warm current surged to the top of his head.

After a long while, until the cigarette butt was so hot, he said, "Mr. Zhang, in half a year, I will develop the laser head reading technology, servo control system and error correction algorithm. By the end of this year, Aiwa Electronics' new DVD player will be equipped with the first domestically developed movement!"

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