Chapter 738 – Good Strategy
Beidacang Group was set up and had started operation. First, they had to settle the issue of letting those state farms invest in this company. There were more than 100 state-run farms, and the land area of every farm and population were different.
There were too many small farms, and Beidacang Group had to change their strategy. The overseeing government agencies will set up their own companies. This way, the companies set up by the 9 Ministry of Agriculture bureaus will become Beidacang group’s subsidiaries, and after using their farms they own to invest in the company.
During the valuation, the state farms’ value was very low and lowered the proportion of shares the Ministry of Agriculture could own.
Beidacang Group also could not get the forests they wanted. This was because a few years ago, a state-owned forestry company was set up in Longjiang Province. The provincial government also knew about this company. But they wanted the support of the Central Government to acquire this company.
But this suggestion was strongly opposed by the State Forestry Administration. Longjiang Forestry Group was China’s first pilot testing company in this industry, and it was doing well. How can this company merge with you all?
In Xu Changyou’s proposal, it had mentioned the development plans for the forestry industry. This Longjiang Forestry Group was also part of the Longjiang province. The leaders from the State Forestry Administration felt that they could implement Xu Changyou’s plans themselves. In the end, they will still be paying the Provincial Government taxes.
You mentioned the advantages of the merger and one management in your proposal. But we can cooperate. Our Longjiang Forestry Group can cooperate with Beidacang Group. We are also developing building materials, furniture branding, forestry food products, herbs, plantation, etc. now. We do not need Longjiang Province to interfere with our operations.
The set up of Beidacang Group had let Longjiang Provincial Government benefit a lot. They had gotten the funding from the Central Government and the control over the state farms. Longjiang Forestry Group had also benefited from Beidacang Group.
Longjiang Provincial Government had wanted to extend their authority over Longjiang Forestry Group but was unsuccessful. However, Xu Changyou had gotten the support from some of the higher-ups. He was given permission to cooperate with Longjiang Forestry Group and authority as the final decision maker over their cooperations.
It will be tedious to implement this plan, but luckily, the provincial government had lots of talented staffs. They were able to set up the main frame of this proposal. They forecasted that they would suffer some losses this year. But it was more critical for them to set up their sub-brands now.
Everyone felt the grains and meat products can just use Beidacang brand. The Beidacang brand of Baijiu was also merged with Beidacang Group. All the smaller Baijiu factories were also acquired. This was to focus on and develop a single brand.
The Provincial Government officials discussed and felt Beidacang brand should include beef, lamb, pork, poultry, flour, Baijiu, etc. products.
There were still a lot of agriculture product brands in the province. It includes Bao brand of Bean Paste, Wu Chang rice, etc.
But there were different opinions for sugar and soybean cooking oil.
The local businesses all wanted their brands to be selected by Beidacang Group. They wanted to eliminate the other brands and be the only brand left. But all these brands were not well-known at all. These brands were all unknown brands, even in Longjiang Province, let alone in the Northeast region. Only some consumers had heard of their brands in their local cities.
What’s the most well-known brand of soybean cooking oil and sugar in Longjiang Province and the whole nation? Tai Hua Brand!
Because of Tai Hua Brand, the other local brands were unknown by the consumers. It was also because before Tai Hua Brand appears, these companies do not have the concept of branding. To them, these products were all basic necessities, and consumers do not need to choose the brands.
After Tai Hua Premium Cooking oil and Tai Hua Pure Sugar appeared in the market, these companies saw the effects of branding and started to develop their own brands. But it was too late.
Xu Changyou was not happy with any of these brands. No one had heard of them, and what’s the difference between using their brands and setting up a new brand? They might as well use Beidacang as their brand!
But someone opposed to this suggestion. Beidacang brand had too many products. Meat, flour, alcohol, and if they added sugar and cooking oil, it would be too diversified. Also, there was another issue. They will be competing with Tai Hua Brand!
Tai Hua Brand was also selling cooking oil, sugar, pork and pork-related food products. They would be selling the same products and will have to compete with Tai Hua. They will face a big headache of how to compete with Tai Hua Processed Food Company.
Tai Hua Processed Food Company had already set up branch offices in the 3 northeast provinces and some of the southern provinces. Their distribution channels and branding were way ahead of Beidacang Group. How can they win this company?
Xu Changyou frowned. How come you did not mention about this before the set up of Beidacang Group? How are we going to solve this issue?
No one can answer Xu Changyou’s questions. They really have to compete with Tai Hua Processed Food Company? Just look at Tai Hua Supermarkets, and you will know how famous Tai Hua brand is.
Can they even win such a famous brand? All of them knew that the boss of Tai Hua Processed Food Company was also one of the shareholders of Bing City Machinery Company. He is also Feng Yu’s father.
When all of them thought about Feng Yu, they knew they will lose. All of Feng Yu’s products were selling like hotcakes! They will surely be beaten.
It was a pity Zhang Ruiqiang did not hold any positions in Beidacang Group. If Zhang Ruiqiang could represent Beidacang Group to speak to Feng Yu, then this problem might be solved. Everyone in the Provincial Government knew Zhang Ruiqiang and Feng Yu were close. This was an open secret.
If they get Zhang Ruiqiang to negotiate with Feng Yu, despite the fact that he was not holding any position in Beidacang Group, it will show how useless they were.
At this moment, someone raised his hand weakly.
“You have any suggestions?” Xu Changyou was open to all suggestions.
“Can’t we cooperate with Tai Hua Processed Food Company?”
“Cooperation? How are we going to cooperate with them? Like Bing City Machinery Company? After we cooperate with them, they have become the main shareholder.” Someone immediately opposed to this suggestion.
This feeling was like letting their child go to school, and their child changed his surname to be the same as the teacher. Although the child became educated and was able to make money, this child was no longer their son!
“How can that be possible?! How much does our Beidacang Group worth and how much does Tai Hua Processed Food Company worth? Furthermore, I am saying we cooperate with them and not merge with them. It’s like how we are working with the Longjiang Forestry Group.”
“Explain in more details.” Xu Changyou became interested.
“We can cooperate in developing the brand. Tai Hua Brand of sugar and cooking oil are famous? Our sugar and cooking oil can be sold under their brand. Wait. Let me finish first. We can add our Beidacang brand above Tai Hua brand on the packaging! This way, the consumers will think that Tai Hua Brand has been acquired by Beidacang Group. The consumers will be reminded of Beidacang Group whenever they buy Tai Hua products!”
Everyone in the meeting room clapped. This strategy might be evil, but if they succeed, it will solve all their problems!