Chapter 240: Dual Approach

Despite Li Dong's firm resolve to tackle the supermarkets, turning intentions into action is proving difficult. He feels like a dog biting a hedgehog, unsure of how to proceed.

The supermarkets in question are not like the small store in Dongping. These are internationally renowned big brands.

Yuanfang is at a disadvantage in every aspect when compared to them.

In terms of brand and reputation, the competitors are well-known names whose reputations are established even without advertising.

If Yuanfang had not gained traction in the past six months, with extensive advertising, it would be hard to compete with these brands.

Regarding service and environment, both sides are comparable.

Although Li Dong insists on improving service, the reality is that many new employees with lower skills make it hard to match the service quality of these foreign companies.

In terms of environment, Yuanfang has an advantage due to being newer.

Additionally, product variety in supermarkets is also important.

However, all these supermarkets are large and focused on daily necessities, so the product variety is not significantly different.

Overall, Yuanfang's only advantage is its larger number of stores, which gives it an initial edge.

But now, having many stores has become a burden.

In a price war, a single store from the competitors can lower prices, whereas Yuanfang needs several nearby stores to do so simultaneously. Otherwise, it damages Yuanfang's reputation.

More stores mean more losses in a price war.

Li Dong is troubled, unsure of what to do.

When faced with a problem too complex for one person to solve, seeking input from many can help.

Unable to find a solution alone, Li Dong gathers the senior management team for a meeting to seek their opinions.

Everyone is aware of the competitive situation between Yuanfang and the supermarkets and has considered ways to win. However, they are at a loss for effective solutions.

The marketing director hesitates before suggesting, "How about putting pressure on the municipal government?"

Li Dong shakes his head, saying that involving the government is not appropriate.

Bringing the government into a commercial competition would only complicate matters further. Besides, the competitors are not pushovers. If they involve the government, the situation could become more troublesome.

The merchandise director chimes in, "We're losing money, and so are they. How about negotiating with them again? It's the end of the year, and with the current competition, no one is gaining an advantage."

Li Dong sighs and responds, "President Sun had already proposed this, but when we approached Carrefour, they showed no signs of budging. They are intent on driving us out of business, even if it means incurring losses."

At this point, everyone is silent.

If the competitors are willing to lose money to keep fighting, other approaches are futile.

After a long pause, someone suggests quietly, "What if we continue to lower prices?"

Li Dong's lips twitch. This idea aligns with his thoughts. Given the current conditions, lowering prices seems to be the only viable method.

However, Li Dong faces difficulties. Both sides are already operating at a loss.

Though the losses are not substantial, they are ongoing. Further price reductions would only increase the losses.

In the past, Li Dong would not mind incurring losses to defeat the competition, but now Yuanfang's finances are tight. Excessive losses could seriously damage the company.

Li Dong sighs. Is there no other way?

As everyone ponders, a sudden "clack" sound is heard in the meeting room.

Li Dong turns to see Shen Qian with her tongue out, awkwardly picking up a fallen pen.

Li Dong raises an eyebrow and says, "Stop doodling. Everyone is trying to figure out a solution, and you're just idling!"

Shen Qian mutters and retorts, "What else is there to think about? At this stage, besides lowering prices, what else can be done? A quick solution is better than a prolonged struggle. Dragging it out means continued losses, and it's better to crush the opponent in one go. After all, they are just branch stores. They need approval from higher-ups for price reductions. If we lower prices aggressively this time, it should buy us two to three days."

"By creating a time gap, we can capture a significant portion of their customers."

"Once their headquarters issues new directives, we can lower prices again. Repeating this a few times should allow us to capture their business and customer base."

"Our only advantage now is our agility. Yuanfang can make decisions quickly, whereas other companies have boards of directors. Long-term losses mean internal disagreements. We can beat them just by exploiting their decision-making delays."

Shen Qian's proposal seems simple, but Li Dong frowns and asks, "I understand what you're saying, but what is the cost?"

"Drastic price reductions across ten stores will not be cheap."

"I estimate that a 20% discount on the first round, 25% on the second, and 30% on the third should be effective. Comparing with usual customer flow and sales, we should prepare for a loss of around 30 million," Shen Qian says nonchalantly.

Li Dong wants to argue. What does she mean by 30 million being enough?

In the past, Li Dong could afford to take losses of 30 million, but now Yuanfang's funds are limited.

Moreover, Shen Qian's estimate might be optimistic. If the competitors don't react as expected, the actual cost could be much higher.

Could it be 50 million? 80 million?

If this turns into a full-scale battle, Yuanfang's finances could be depleted. A minor error could lead to major problems.

Seeing Li Dong's displeasure, Shen Qian huffs, "If this isn't feasible, what's your suggestion?"

"We're already operating at a loss. Once other new stores open, we might face even more losses. Losing ten million a month will drain the funds in a few months, achieving the same result."

"If we can crush the competitors with a decisive action, we might recover the money in a few months. If we succeed, we not only avoid losses but also gain time. What do you think?"

Shen Qian finishes her proposal and remains silent, leaving the decision to Li Dong.

Thirty million is not a small amount, and Li Dong's hesitation is understandable.

Li Dong takes a deep breath, lightly taps the table, and finally asks Sun Tao, "President Sun, what's your opinion?"

Sun Tao replies, "I broadly agree with Manager Shen's plan. However, such actions will result in mutual losses. It's better to avoid it if possible."

"Do you have any suggestions, President Sun?" Shen Qian asks with a snort.

Sun Tao considers and responds, "I actually have a suggestion, but it involves spending a significant amount."

Li Dong perks up, asking quickly, "What method?"

"Acquisition!"

Everyone looks surprised. Acquisition? Acquire what?

Sun Tao scans the room and smiles, "Acquire the other supermarkets."

"Pfft!"

Li Dong doesn't react, but Shen Qian spits out her drink. What a ridiculous idea!

Acquiring several well-known supermarkets—Sun Tao is quite audacious!

Sun Tao remains unfazed and continues smiling, "This might have been impossible in the past, but the situation is different now. These supermarkets are currently operating at a loss and don't bring any benefits to the parent company. And you all must have noticed the situation in Jiangbei. We have a significant advantage in Pingchuan and hold the initiative."

"Business is about making money, not just fighting. They are merely holding on. If we demonstrate our determination to continue, they will eventually make a choice."

"Additionally, it depends on whether we're willing to pay the price. As long as the price is right, no business deal is unmanageable."

Li Dong furrows his brows and asks, "How much would it cost to acquire these three supermarkets?"

"At least 150 million!" Sun Tao replies.

The supermarkets in question are top-tier in terms of location and setup, comparable to the Longhua store. To acquire them, 50 million per store might be the minimum.

Considering this is a provincial capital, rent is substantial. If it involved buying the buildings too, Sun Tao would not dare to suggest it.

Li Dong shakes his head at the figure, "Too much. Yuanfang can't afford it right now."

After thinking for a moment, Li Dong adds, "Moreover, we have enough stores for now. Acquiring these stores, even if feasible, would lead to resource redundancy and wasted funds."

Hearing this, Sun Tao agrees, "That's true. I didn't consider this aspect. My initial focus was on the impact of the acquisition. If successful, Yuanfang would solidify its position as a retail leader in Pingchuan."

Acquiring several prominent supermarkets would indeed enhance Yuanfang's reputation.

If money were not an issue, Li Dong would consider it, but the investment is too high. Li Dong shakes his head.

In the end, Li Dong realizes that apart from lowering prices, there are no other viable options.

He exhales deeply, stands up, and says, "We'll proceed according to Manager Shen's plan and continue lowering prices!"

"Finally!" Shen Qian laughs and says, "Trust me. We'll win!"

"Set 30 million as the limit. If costs exceed this, we'll extend the battle," Li Dong adds.

If 30 million cannot resolve the issue, he will slow down and continue fighting.

In the long run, Yuanfang will emerge victorious.

But if 30 million can solve the problem, Li Dong is willing to invest that amount. By the end of the month, the other stores should also start making profits, roughly equal to a month's profit for Yuanfang.

Taking a month's profit as a gamble seems worth it.

With this decision, Li Dong no longer needs to worry about it. Sun Tao and

 the team will handle it.

Returning to his office, Li Dong calls Liu Qi to bring in Zhou Haidong.

When Zhou Haidong enters, Li Dong paces the office for a moment.

Finally, Li Dong grits his teeth and decides, "Find a way to get some people to visit other supermarkets."

Zhou Haidong raises an eyebrow and asks cautiously, "Are we really going to sabotage?"

Li Dong is momentarily stunned and then replies irritably, "Use your head. I'm not asking you to vandalize stores!"

"I mean, get some aunts and older women to visit, help them promote the business. Aunts can be very picky. Taking a long time to pay or causing a fuss over product quality should be easy, right? Do you need me to teach you more?"

Zhou Haidong understands now and grins, "Got it."

Li Dong also feels a bit guilty, "I'm just helping them with business promotion. It shouldn't be considered sabotage, right?"

"Right, right!" Zhou Haidong quickly agrees.

Li Dong rubs his face. Although this tactic feels somewhat underhanded, he has no other choice.

The big price cuts proposed by Shen Qian don't guarantee victory. Li Dong adds a bit more pressure to the situation.

Compared to vandalism or direct sabotage, what Li Dong is doing is relatively more acceptable.

In business, if you don't take advantage of others, they'll take advantage of you. The supermarkets are already engaging in underhanded tactics, so Li Dong's actions are understandable.

As for the effectiveness, Li Dong believes it will have some impact.

Using a dual approach, he doubts the supermarkets can hold out for long.