Chapter 1122: Big Capital Increases the Laboratory

Indeed, in the face of this question from Fok Kin-ning, Xia Yu also felt a bit of a headache.

Xia Yu thought for a moment and asked again, 'Is PolyGram International Limited listed?'

Facing Xia Yu's question, Fok Kin-ning shook his head regretfully and said, 'This company is not a listed company. The majority of the shares are concentrated in the hands of Siemens and Philips. The combined shareholding of the two companies is about 70%, and the remaining shares are scattered among a number of shareholders.'

After hearing this, Xia Yu's brows tightened again.

It would be difficult to break the deadlock if it is not listed, and the combined shareholding of the two companies exceeds 70%, which can control the absolute will of PolyGram International Limited.

It's difficult!

...

In fact, from the very beginning, it was destined that Tiangong Electronics would face this problem sooner or later.

Because Tiangong Electronics is a latecomer, challenging the original strong player means having to face the huge advantages that the previous strong player has accumulated.

Generally speaking, there is no absolute dominant position in the upstream and downstream of an industry chain. The key is still the overall influence and strength.

Now Tiangong Electronics is in the upstream of the industry chain, and although it has an advantage in technology, the downstream of the industry chain is a weak link.

Philips, on the other hand, is a strong player across the entire industry chain. Although it is now technologically behind, it still has the huge downstream PolyGram International Limited as a moat, which forms the most direct countermeasure against Tiangong Electronics.

Under these circumstances, Tiangong Electronics' technological advantage was offset.

As time passed, if Tiangong Electronics was unable to launch products for the market, then competitors such as Philips would also be unable to launch products due to technical patent issues. Either they would change the direction of research and development to avoid Tiangong Electronics' technology, or both parties would compromise.

There are different scenarios for a compromise, depending on which party is in the dominant position.

Judging from the situation described by Fok Kin-ning, Tiangong Electronics lacks a powerful record company to support the release of the CD Walkman, and PolyGram International is an obstacle that cannot be avoided.

Even if other record companies in the world would support it, without the record empire of PolyGram International, the CD Walkman market cannot be fully developed.

PolyGram International Limited will buy Philips Corporation a lot of time. Once Philips has developed a different technology, it can then bring in its allies from the original Red Book standard to re-establish a Yellow Book standard like the old one, and then rely on their original relationships with the world's major record companies, as well as the advantages of PolyGram International Limited, to very likely knock Tiangong Electronics Company straight to the ground.

By then, the market previously developed by Tiangong Electronics Company will become their wedding garment.

With two hands unable to defeat four, failure is the only outcome.

Xia Yu took a deep breath to gradually clear his thoughts. The first thought that came to his mind was to acquire PolyGram International Limited!

But then he quickly dismissed it.

Philips and Siemens would not be unaware of the strategic role of PolyGram International Limited to them. Why does Philips now occupy a major position in the markets of vinyl records, radios, and gramophones?

Why was PolyGram International acquired by Universal Music in the past?

The key reason was that the record and portable music markets were declining, and Philips and Siemens had already abandoned these two areas, so the importance of PolyGram International had greatly diminished.

In addition, competition in the global record market was becoming increasingly fierce, so they simply sold PolyGram International to raise funds to continue developing new products.

Therefore, it is almost impossible to acquire PolyGram International Limited completely.

The only chance is to first acquire Philips of the Netherlands and Siemens of West Germany. After acquiring these two companies, PolyGram International Limited will naturally be in your hands.

But acquiring these two companies?

It is not impossible if there is a chance later, but now...it's unrealistic!

If PolyGram International Limited cannot be acquired, then a compromise must be made.

But there are ways to compromise.

How can a compromise be reached that maximises benefits?

No matter how the compromise is reached, the ultimate goal of Tiangong Electronics is to gain a leading position in the industry.

And there are two levels of leadership.

One is the technical level, and the other is the market level.

In terms of technology, Tiangong Electronics, as a leader in technology, must become one of the standard-setters for CD-ROMs and must be the one calling the shots.

First-class companies set standards, second-class companies make brands, and third-class companies make products!

Tiangong Electronics is not yet in the first tier in the fields of portable music players and CD discs, but is still in a situation where it is a combination of the second and third tiers.

The previous Red Book standard was developed by Philips and Sony, and these two companies are the industry standard-setters who gained the most benefits, with Tiangong Electronics being a participant.

Therefore, for the next standard, the future Yellow Book standard, Tiangong Electronics must become the standard-setter and gain as much say as possible, relying on its technological advantages.

Then there is the second market level, where by all means, one must occupy as much market share as possible and gain the greatest market benefits!

As long as one is number one in both the technical and market levels, then naturally, in this industry, Tiangong Electronics is the leader!

"Jianing, I will go back and think about this matter carefully, and I will tell you more tomorrow.'

Because this involves a wide range of issues, if one just thinks about it without doing a paper analysis, it is easy to get confused, so Xia Yu said directly to Huo Jianing.

'Okay!'

Fok Kin-ning obediently nodded in response.

'Let's go, take another look at the other laboratories and products!'

'Chairman, please follow me!'

Then, the group left this laboratory, and Fok Kin-ning and Lu Chao led Xia Yu to inspect all the laboratories one by one.

After the inspection, the results pleasantly surprised Xia Yu.

There were more than 300 research personnel in the entire Tiangong Technology Laboratory, of which only about half were Chinese, and the rest were big names poached from elsewhere.

The Optoelectronics Laboratory, Communications Laboratory and other experimental departments have not yet developed any iconic products, but they have developed some technologies that have helped some of the current companies of the consortium and have earned some funding for the Tiangong Technology Laboratory.

Of course, the main source of funding to support the development of the Tiangong Technology Laboratory still comes from the company's game console department.

Tiangong Electronics' game consoles and arcades are now selling well all over the world, and the company is the industry leader. The original industry leader, the American company Atari, has become number two and is still struggling to stage a comeback.

Xia Yu gave Fok Kin-ning a very positive appraisal of the strong performance in the field of game consoles.

Of course, the most important thing was that Xia Yu gave a high degree of recognition and praise to Tiangong Technology Laboratory.

However, considering that Tiangong Technology Laboratory was only supported by Tiangong Electronics, and the technology developed was of some help to Tiangong Machinery Group, Tiangong Electrical Appliances Manufacturing Company and even Tiangong Automobile Group, it was unfair to Tiangong Electronics and also restricted the development of Tiangong Technology Laboratory.

Therefore, he directly decided to remove the Tiangong Technology Laboratory from Tiangong Electronics and place it under the Tiangong Group, where it would be at the core. Funding would be provided by all companies within the group.

If there is still a shortage of funds, he will directly allocate funds from the consortium level to support the Tiangong Technology Laboratory. Funds must not become a shortcoming.

The Tiangong Technology Laboratory will then expand with full force. In addition to attracting global talent to Hong Kong, it is also necessary to establish Tiangong Technology Laboratories in other countries to seize outstanding scientific research talent resources from various countries and allow them to create wealth for the Tiangong Group and the entire Jiuding consortium.

The future is the era of technology, and the nature of business struggles will become large capital increasing laboratories. The combination of the two is powerful!

In Xia Yu's position, the Tiangong Technology Laboratory is like the Bell Laboratories in the United States. In the future, it will develop one high-end technology after another, and it is an inexhaustible source of power that supports Tiangong Group's rampage in the world!