29 episodes
I decided to advance into electronic products and started thinking about what to make in earnest.
However, this is not as easy as you might think.
“…this is not something that can be done just by heading to the ground.”
Unlike shoes that can be cut and made with just fabric, plastic molding is required to fit the product, and there are unexpectedly small obstacles such as substrate design.
So I looked to see if there were any small home appliance companies that could be taken over just like the one that took over Kim Deok-bae’s factory.
“How did you all die like this?”
By the way, Made in Korea.
And unlike the shoe factories that somehow continued their business with custom-made products at the forefront, Korea’s small home appliances are made with their own brands and recognition, except for mid-sized companies and above, all seeds are dry.
Even then, most of the factories were in China, not Korea, so there were virtually no small home appliance companies in Korea.
“What do we do?”
Of course, it doesn’t require very difficult skills, so if you hire a few people in related fields and have them do research, you can’t make anything like that. Will a product that is made that hard, no matter how cheap, work in the market?
Even those well-known conglomerates often find chronic diseases in new products created through repeated research, not to mention Ceron, which has no underlying technology.
So, I was thinking about the simplest acquisition, but I am embarrassed because there is no company that I can take over.
I thought for a while and said.
“How did China start in the first place?”
Think of China, which is synonymous with low-end products and is a role model and competitor for my business.
“Low quality cheap product. And… ah!”
fake.
China produces counterfeit products and builds up technology based on it to get to where it is today.
“okay. The original is not necessarily the answer.”
I’m not trying to make the best electronic products that are second to none in the world.
It’s just that the performance is similar to the others, but the goal is to have an overwhelmingly low price.
Then, shouldn’t it be enough to make other products that have already been proven only when we clumsy in-house development?
That said, taking any product without permission like China and copying it is almost impossible to hear good news even in Korea, regardless of my conscience.
I left the office and called out Kim Deok-bae, who was busy working for a long time.
“Chairman Kim!”
Then Kim Deok-bae said with a puzzled expression.
“You are the president.”
“Because you are the president of the association, you are right.”
“CEO, can you please just call me back?”
“haha.”
I’m just joking around like this.
“Chief Kim, is there a Wonwon Shop and a large mart near here?”
“Yes. What do you need?”
“Send in the staff and tell them to buy every single piece of electronics there. ah! Even electronic products sold on the Internet cost less than 50,000 won and order the ones that look good.”
*
Jinli Wang, president of Yinchu Electronics in Shenzhen, China.
Inchu Electronics’ main product was headsets, and it was a healthy small and medium-sized business with an annual export value of several million dollars.
But one day, a man came to see me as the manager of a Korean company.
“Nice to meet you. This is Manager Ahn.”
“Are you good at Chinese?”
“Yes. I am from China studying abroad. haha.”
“Oh, yes. Anyway, I was surprised.”
Wang Jin-ri shook his head and said.
“You want to sell us a license. This is my first request like this.”
Even if you’ve heard of trading licenses for famous electronic products, you’re trying to buy a headset from a small and medium-sized company like this, and even all models that are being considered for discontinuation rather than the latest model.
“Hey, what did you say? What is your company name?”
Director Ahn said with a smile.
“It’s called SR Electron. It’s a newly established electronics company at the head office.”
“Is there a separate headquarters?”
“It’s called Seron, but you won’t know what it is. Because it is a company that has nothing to do with this industry.”
A company name that you may or may not have heard of.
“Anyway, SR Electronics is a completely new company with a factory in Korea, so the lineup is very poor. So, we are working on strengthening our lineup by purchasing licenses with investment from the head office in order to quickly settle into the market.”
Reasonable reason to buy the license.
However, Jinri Wang had no choice but to feel the absurdity of only one word, not the reason.
“korea? Wait a minute. So, are you going to make a headset in Korea?”
“you’re right.”
Wang Jin-ri said with a puzzled expression.
“Will the unit price be right with it being produced in Korea?”
“That’s it, I don’t know, the boss is thinking.”
“I’m so crazy about this.”
Unless it was a high value-added product that builds an almost perfect autonomous production line like semiconductors, the price of electronic products was unconditionally controlled by labor costs.
But regardless of the price, a new company that is not a famous brand that you can trust and buy is setting up a factory in Korea.
“Anyway, what our SR requires is the right to produce products, complete technology transfer, and the right to export overseas.”
“Are you exporting?”
Of course, I wondered how much the Korean headset would sell if it was sold, and although it was an older model that was about to be discontinued, no one would welcome the fact that the product it was making was coming out as a competitor.
Wang Jin-ri said with a determined expression.
“I do not want to increase the number of competitors. Even if it’s not, the competition is fierce, even making products just like us…”
“A one-time payment of $700,000.”
At that, Jinri Wang said, startled.
“700,000 dollars?”
Although Wang Jin-ri’s company is exporting millions of dollars a year, the net profit is less than 400,000 dollars a year due to the nature of the manufacturing industry.
But with a model license that is about to be discontinued, is it going to give you nearly two years’ worth of net profit at once?
Wang Jin-ri’s pupils shook violently.
“In addition, we plan to purchase all the machines currently used in the factory to make old models and send them to Korea. We will also give you 1.5 times the regular mid-range price.”
They even buy used machines that have to be disposed of due to discontinuance at 1.5 times the price.
“Umm…”
“Honestly, I would like to have an opportunity like this again. How are you?”
Then Jinri Wang thought about it for a while and said,
“Still, it is a product that was developed with great care and attention to detail.
Wang Jin-ri comes out suddenly saying that he is short of money in No.
“One million dollars. No more.”
“Are you using a little more of the seaweed?”
“If you are too greedy, you will just find another company.”
At the words of Director Ahn, Jinri Wang coughed in vain.
“Hmm. That model still exported $2 million worth of exports this year alone, and even though it is scheduled to be discontinued, only $1 million is a little bit…”
Then Director Ahn got up from his seat and said:
“We can’t help it because we don’t agree with each other. We will see you next time we have another good opportunity. Then I’ll stop…”
Then Jinri Wang got up hurriedly and said,
“Gosh. What are you in such a hurry for? now.”
Jinri Wang took out a cigarette and handed it to him.
“Smoking a cigarette and talking slowly.”
Then Director Ahn shook his head and said.
“Because I don’t smoke.”
“Is that so? After all, you said a million dollars, right?”
“Yes.”
“Is it only made in Korea? What is your logo and model name?”
“Of course, it will only be produced in Korea, and the logo will of course have our own logo, and our own model name will be used for the model name. If you wish, we will specify it in the contract.”
Wang Jin-ri thought.
‘This is a complete mess. It’s a bit lacking compared to the new model, but the design is completely different, and we’re not doing business with loyal customers anyway, right?’
To be honest, they are old and new, but they are practically separate products with similar functions.
In addition, if there are loyal customers and there are people who insist on only products made by Inchu Electronics, the old models will eat away at the sales of the new models, but where is the person who buys products from companies like Inchu Electronics in the first place?
I just list a bunch of low-end headsets in a similar price range, and I just pick the one that looks good in price and design.
In other words, even if the old model is transferred to the SR, Inchu Electronics will add one of its old headsets to the competitive lineup of many low-end headsets, nothing more, nothing less.
Even with the condition that it is made only in Korea, price competitiveness is even better because it is clear that the company’s new model will be superior.
‘okay. It’s going to be discontinued anyway, so it’s much more profitable to suck the last honeydew and invest in equipment with it.’
Wang Jin-ri, who finally made the decision, nodded and said.
“good. I will make a contract.”
At that, Ahn nodded his head and said.
“You thought well. oh And when you make headsets, do you also receive supplies from other factories?”
“ah. what is it. Everything else is made here, and the speakers are delivered from a nearby factory.”
Then Director Ahn smiled brightly and said:
“Then can you introduce the factory as well?”
*
Ahn, who was in charge of the Chinese subsidiary of a medium-sized company, was honorably retired.
I hired Ahn through the introduction of Kim Deok-bae, and I appointed Ahn as the manager of the newly created SR Electronics, and when I selected a product I liked from the Internet and mart, I went to the product manufacturer and bought a license.
It has become obsolete due to the release of a new model and is about to be discontinued.
In other words, the time required to create a new product, such as trial and error and development research, was purchased with money.
“This is a win-win for each other.”
I like to secure production items at a price lower than the cost of acquiring a factory, and I like the company that sold the licenses to earn money in advance.
Anyway, if you mass-produce licensed products at very low prices and distribute them indiscriminately, the entire low-end market will inevitably shake.
In such a situation, how good is it that you have already paid a fair amount of money in advance for the license?
Of course, it would be best for them to stop going into the market by not selling licenses to anyone, but that’s impossible.
Because there is no business in front of money, even if some rejected it, some of the numerous candidates would have sold the license in the end.
And this is the reason why I put the name of Seron on the front page from the beginning.
I think you don’t know because Ceron’s name is still known only in Korea and the footwear industry, but even if you do, you are confident that one of those numerous companies will surely pass.
Anyway.
I smiled and said, seeing the second-hand machines shipped by ship from China.
“Money is the best.”
By paying money, SR Electronics, which was in a completely blank state, are lined up with products with proven performance and sales, even though they are outdated.
In addition to purchasing licenses for parts used in the product and producing them directly, SR Electronics is no different than a comprehensive electronics company in name and reality.
In fact, in general, it is very inefficient in terms of cost performance to directly produce parts of a product.
It was obvious which speaker would be cheaper between Inchu Electronics, which only needed speakers for headsets, or a company that manufactures only a small amount of speakers for its own use or a company that produces speakers for all kinds of companies in large quantities.
So, most companies have a thorough division of labor in which each company selects a field they are good at and lowers the price through mass production.
But SR is different.
Since we are aiming for ultra-low-cost mass production in the first place, the quantity is sufficient, and considering the advantages of Skeleton, such as zero labor cost and extreme hybrid, it is possible to extract speakers at a lower price than a professional speaker manufacturer.
Naturally, the cost-performance ratio of the final finished product to be produced by extracting the cost-effectiveness from each basic part and saving the margin that should be given to the subcontracting factory is truly top-notch.
It was a business method that only people with skeletons could do.
Team leader Baek Sang-ho, who was waiting at that time, approached and said,
“CEO, Chinese engineers are arriving soon.”
Chinese technicians come to teach them how to operate the machine and know-how in production.
“Team Leader Baek looks at it carefully and memorizes it. Especially these machines.”
I said in a quiet voice.
“You should use this as an excuse for maintenance and watch how it works.”
I have to make it similar to a skeleton later.
Baek Sang-ho said with a firm expression on his face.
“All right!”
“Then I trust only Team Leader Baek.”
So I left the factory with Baek Sang-ho.
I said with a bright smile.
“Overseas targeting with Chinese copy products. Perfect, right?”
Until technology and know-how are accumulated, they use their financial power as a weapon to buy licenses and make products.
Just like China has accumulated technology through illegal copy products.
“uh? But wait. After all, these are not made in Korea at all.”
The reason I am reluctant to go to the domestic market is because I was concerned that factories in Korea would suffer because of me, resulting in a large number of jobless people.
However, it is safe to say that these small home appliances have been wiped out to such an extent that, except for a few well-known brands, Korean small and medium-sized enterprises have no company to take over.
In other words, none of the competitors of the low-end products that I have purchased a license from are from Korea.
Of course, Chinese importers of electronic products may be arrogant, but importers can only import other products if they don’t want money, so I don’t have to worry about that, right?
After thinking for a while, I smiled and said.
“Let’s eat from the Korean market.”