PEERLESS GENIUS SYSTEM II

Chapter 364: Boycott from the Three Giants

"Li Li, are you sure that you want to start a price war with Luo Workshop?"

Chai Zhiying was shocked and said, "But their flagship product is a Chinese medicine beverage–the TCM herbal drink! It is because of the drink that our customers end up buying bread and pastries from them. Sumir cannot replicate such a drink," she continued.

"It's okay, just do as I say." Su Li said nonchalantly, as she tidied Su Xiaobei's collar.

Chai Zhiying nodded, "Okay, I'll call the Head of Sales right now and tell him to lower our prices to cost price."

Xiao Luo, on the other hand, was already thinking of a counter solution. Although their main product was the TCM herbal drink, the bulk of their revenue came from their bread and pastries. If Sumir lowered their prices to cost price, customers would only buy the Chinese medicine drink from Luo Workshop and everything else from Sumir. Based on Luo Workshop's current financial standing, it is not the time yet to go head-on against Sumir.

How should they deal with the coming challenge?

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As he expected, when Sumir lowered the prices of their products, the customers went back there. Of course, they still purchased the Chinese medicine drink from Luo Workshop, but that was it. For bread and pastries, they bought those from Sumir.

Some alert media had detected the competition between the two companies, and they started reporting on the battle for market share between Sumir and Luo Workshop. They would go on to the streets and interviewed random citizens of Xiahai for their opinions on this battle between Sumir and Luo Workshop.

"Opinion? Of course, we are going to sit back and enjoy the battle!" said one customer.

"I am neutral. Let the big corporates fight. We will get the best bargain for bread and pastries," said another customer.

"I think Sumir would eventually emerge as the ultimate winner. Although Luo Workshop is a big name in Jiangcheng, Xiahai city is Sumir's home ground. Sumir has a huge group of loyal customers here. Luo Workshop won over customers because of their Chinese medicine drink. Since Sumir has lowered their product prices to cost price, Luo Workshop is pretty much done for," an interviewee commented.

"According to my analysis, Luo Workshop will definitely fail. Firstly, Luo Workshop cannot match up to Sumir in terms of economic strength. Secondly, Luo Workshop has actually affected the sales of Huayao Corporation to a certain extent due to the Chinese medicine drink. Just watch. Huayao Corporation will join in this battle in no time. Lastly, oh, never mind...., there's no 'lastly.' In summary, Luo Workshop is heading for doom!" commented another observer.

There were two kinds of interviewees – the indifferent ones and those who believed that the Luo Workshop would definitely fail.

"Old Xiao, what should we do now? Your wifey has started a price war, and we stand no chance of winning! If we can't come up with a solution, we will turn out to be just a beverage company! If our competitors know about this, we will become the biggest joke in the industry," said Zhang Dashan, who was at Luo Workshop's Xiahai office. Seeing that their business had been deteriorating severely, he had to call Xiao Luo for help.

Xiao Luo ignored the lame jokes and asked, "Is the product appeal of our TCM herbal drink to our customers high?"

"Yeah, it's pretty high, and that's all that they are interested in. They wouldn't even spare a second look at the bread and pastries. All of them would buy the drinks from us and going to Sumir for their bread and pastries. Although our drink does produce a significant profit margin, the main bulk of our profit still lies in the baked stuff. If we can't find a way to increase the sale on those, then just selling the Chinese medicine drink cannot get us out of this situation." Zhang Dashan said.