Chapter 1383 – Fighting for markets
“Feng, what’s there to discuss? Microsoft wants to compete with us to see whose money can last longer!” Kirilenko heard what Lei Jun said.
Kirilenko doesn’t care about Microsoft and thought nothing about them.
“Mr. Kirilenko, it’s this easy. Microsoft’s a.s.sets are tens of billion USD, and it’s from their office software. If they beat us, they can easily make tens of billion USD in the future.”
“Our products had just entered other markets. Other than our Chinese market and East European market, we are not making profits. Even if we invested a large amount of money in stabilizing the market, when can we recover the losses? The return on investment is not worth it.” Qiu Bojun explained.
Microsoft’s products are selling at a high price and had opened up the markets. Consumers’ and users’ acceptance rate of them is also very high.
Lenovo Kingsoft’s office software has just entered those markets. Despite selling at half of Microsoft’s price, they still have to work with the local software companies. On top of that, they still have to spend a sum of marketing fees. Suppose their sales cannot meet their forecast, they will not make any money.
Qiu Bojun also felt burning money is not a good move because they might not get the market share and waste lots of money. Even if they succeed, the returns might not be as high as expected in the future.
An activation code generator was released for the latest Microsoft Office. Who can guarantee if anyone can develop one for their software in the future? If this software cannot make money, they will suffer a ma.s.sive loss.
Of course, if they can get more users and provide some add-on paid services, they can still get some profits.
“Did you all notice that Microsoft’s activation code generator is only for our Chinese and East European market? Why is this generator not available for other markets?” Feng Yu knocks on the table and asked.
“Are you saying that we should create an activation code generator code for other countries’ versions?” Lei Jun felt this is unethical and might be illegal.
“Why should we create it? We only need to let this Microsoft staff create it and post it on the overseas website. We don’t need to care whether it is suitable and how they will upgrade in the future. If this is successful, Microsoft will suffer ma.s.sive losses. Their development cost is not lower than us.”
Although Microsoft has many branch offices in many countries and all of their different language versions are translated by their internal staff, their wages are very high. Especially the American software engineers.
Lenovo Kingsoft might have partnered with other software companies for their foreign language versions. Their initial development cost is much lower. Their developers’ wages might be the highest in China, but they are still much lower than Microsoft.
Lei Jun and the rest brightened up.
That’s right. Microsoft had created this activation code generator, and it is digging its own grave.
But this will also affect Lenovo Kingsoft’s office software sales. They had just entered Europe and the US markets, and they might not even recover their advertising cost.
This will be a lose-lose situation.
“Microsoft is relying on their high selling prices to generate high profits. If their high profits are gone, their share prices will plunge.”
“Microsoft had controlled Europe and the US markets, and we had entered these markets late. Even if we can get 10% of the market share, it will be a success. But if they lose 10% of their market share, it will be considered a failure, and their shareholders will be upset.”
Bill Gates might own the highest voting shares and has the support of the other shareholders. Still, the shareholders will leave him if Microsoft suffers losses.
The shareholders might not have enough shares to remove Bill Gates, but they will dump Microsoft shares. This will result in ma.s.s dumping, and the share prices will plunge again.
Microsoft’s share prices had just started to recover, which will definitely be a heavy blow to them!
With the share prices plunging and Microsoft burning money to compete with Lenovo Kingsoft, the share prices will fall faster.
“Then what other countermeasures should we do?” Qiu Bojun asked.
“I think since we had spent so much on introducing our software, why don’t we increase our spending? Even if we cannot make money, but we can get the market share. Under normal circ.u.mstances, Microsoft will introduce a new version within three years to make money. They will not allow these pirated versions to continue.” Liu Chuanzhi said.
“I also agree with Manager Liu. Since we will not make money and might suffer losses, we should s.n.a.t.c.h the market share and users. This will help our sales when we introduced our next version, and recover our cost.” Lei Jun agreed.
Feng Yu looks at the rest, and all of them agreed. Kirilenko also added that since they are going to increase their marketing, they might have suppressed Microsoft on marketing. This will let everyone knows that Lenovo Kingsoft has the best office software in the world!
“Alright. Since you all agreed, we shall declare war on Microsoft and rob them of their market share. Our marketing efforts are not aggressive previously. This time, we will increase our marketing budget by 100 million RMB in China and 100 million USD overseas first. If it’s insufficient, we will increase it!” Feng Yu decided.
Although Lenovo Kingsoft’s Chairman is Qiu Bojun, this is a shareholders meeting. Feng Yu is the biggest shareholder, and Lenovo Group is Kirilenko.
No one will oppose Feng Yu’s decisions, and no one dares to override him.
“Manager Feng, this will delay our other projects’ development. We will not have enough funds.” Lei Jun reminded.
Feng Yu waved his hand. “No need. Go and get a loan from Min Sheng Bank. They will approve it.”
“Manager Feng, should we get listed to raise funds?” Qiu Bojun said.
Feng Yu realized this wants they wanted.
Getting listed is also a good option.