Chapter 421 – The Complacent Duan Yongping
Duan Yongping gathered all the top executives in his company for a meeting. The government had opened up the video game industry and allowed importation of video game consoles.
Currently, The Little Tyrant was making use of its cheap pricing, pirated game cartridges, and aggressive advertising to control China’s market.
But Duan Yonping knew that their consoles were imitations of Nintendo’s old model, and Nintendo still has the patents of the consoles. All the game cartridges were counterfeits. If Nintendo were to sue them for copyright infringement, then they would be facing hefty fines and possible shut down.
Luckily, they were aware of this problem in advanced and had been developing a new product. A product that belongs to The Little Tyrant.
They had made some progress with this new product. They had noticed that the income of families had increased, but the parents were not willing to buy a video game console for their children. Most parents think that video games will affect their studies.
Duan Yongping suddenly had an idea. What if they were producing educational game consoles which will help children with their studies? He could make simple games with words, idioms or foreign languages and the parents will be willing to buy these games for their children. The kids will be able to play games and learn at the same time. This was killing two birds with one stone!
Of course, before the production of this new product, Duan Yongping needs to do market research. They realized that other than computers which had this function, there were no similar products. Computers cost more than 10,0000 RMB. If they simplify the manufacturing process and produce a cheap and useful product, the cost can be controlled within 2,000 RMB. If they priced it at 3,000 RMB, it should be selling well!
Duan Yongping was excited by this idea. He believes that The Little Tyrant had found a new revenue source. This was a new product that was between a video game console and a computer.
Duan Yongping got the support from the rest of the top executives in the company. All of them felt that a new product will secure The Little Tyrant’s position in China. The company will not be a cheapskate game console factory.
Duan Yongping presented his idea to his leaders. The Little Tyrant currently was still a state-owned enterprise. The leaders also felt that this was a good idea, but when they probe further, they found out that The Little Tyrant had spent all their funds on developing this new product. Duan Yongping wanted the City to give them 1 million to carry on developing this product.
The City refused. They had already given The Little Tyrant 1 million RMB to develop new products, and they had spent it all. The new product was still not developed, and they still want 1 million more?
Duan Yongping explained to the leaders patiently. This new product will monopolize the country and will beat all other video game console factories in China. Their factory’s profits will increase by several folds.
Most importantly, they will not infringe the patent rights!
China had opened up the market for video games and allowed importation of game console. These foreign companies will surely do market research and will know that they were using their technologies illegally. If The Little Tyrant were to be sued by them, then they have to stop the production of their consoles. Even if those companies did not sue them, they might introduce low-cost consoles. These big brands will also affect their sales.
Duan Yongping was also helpless about this. In this era, the Chinese always thinks that imported products were better than their domestic products. Expensive stuff was better quality products. He was afraid that even when those imported consoles did not lower their prices, his market share will also be affected.
It was important for the Little Tyrant to develop a new product as this would affect their survival in this industry.
Actually, the City leader was not pleased with Duan Yongping way back. Duan Yongping had been saying that there were problems with the management in The Little Tyrant. He wanted a restructuring.
Restructuring? You are already the General Manager. What else do you want? You want to be the Chairman? This company belongs to the City and not you!
The last time Duan Yongping had told the leader that management and technology were most important to The Little Tyrant and he wanted to exchange them for shares after the restructuring.
What does this mean? Duan Yongping wants to split The Little Tyrant? He thinks that the company will close down without him? Also, the salaries of those technicians were not high enough? Their wages were 200 RMB a month. It was even higher than the leader in the City. What more do they want?
Guangdong does not lack talents. The recent few years, there were a lot of skilled technicians from the north that came to their province. If the current technicians were not happy, then the City will replace them. Those technicians from the north might be even willing to work for 150 RMB!
Duan Yongping had said that The Little Tyrant should be changed to a shareholding and some of the useless departments in the company must be removed. They should increase the R&D and sales department. Shares can be given out as rewards. This was to show the company’s appreciation for the employees who had made huge contributions.
Of course, Duan Yongping also felt that he was the one that set up The Little Tyrant. When he took over this company, the company had debts or more than 2 million RMB. He did not ask the City for money to repay the debts. Instead, he persuaded the distributors and suppliers to give him time. It was because of him, The Little Tyrant was developed. Even when in debt, he placed advertisements in CCTV. This was the reason why The Little Tyrant became the market leader in the video game console industry.
The name The Little Tyrant was to let this console become the tyrant in this industry. It can be said that Duan Yongping had achieved it. The few years, he had earned tens of millions for the City.
He was the one who had brought all these for the city and should he be rewarded? Look at those foreign enterprises. All their top executives held the company’s shares. Why can’t he have the same thing? Which senior executive in the company was more capable and made more contributions than him? Why were those foreign companies’ top executives getting thousands of RMB salaries and he was only getting slightly more than 200 RMB a month?
There were a lot of companies in other provinces that had undergone restructuring, and the leaders were rewarded with shares of the company, based on their contribution. Duan Yongping felt that this should be the benchmark. No one in the company will have other opinions. He was the one that brought the company back to life, and everyone in the company were grateful to him.
But the City does not agree with him. They felt that the company does not need to be restructured. This was a state-owned enterprise, and the company was progressing well. There was no need for any changes.
But after Duan Yongping’’s constant protest, the City relented. If Duan Yongping were to quit, they could not find anyone suitable to replace him.
The City gave Duan Yongping a condition. If The Little Tyrant’s profit were able to exceed 100 million RMB in a year, then they would talk about the restructuring of the company.
Duan Yongping was overjoyed. The City had finally relented to his request. But now the City does not want to give him funds to develop the new product. Without the funds, then there will not be any new product. How can the company make money without the new product? If the City had not taken away all the company’s profits last year, the company does not even need to beg the City.
After Duan Yongping persistent pleads, the City agreed to give him 500,000 RMB. If he made any breakthrough, then the City will consider if they will provide him with more funds. Duan Yongping happily left. He was determined to develop the learning machine and let the City sees his capabilities!
However, Duan Yongping was not aware that Aiwa’s prototype of learning machine was ready!