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Volume 1 New York Story Chapter 24 Difficult Choices

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    Update time: 2012-06-12

    "If Pfizer takes the lead in using the new citric acid process, the output can be tripled and the cost of raw materials can be reduced to 30% of the original value. This means that Pfizer can produce citric acid to meet the needs of the entire United States with only $1 million in production liquidity.  Come"

    "Pfizer's market share will not be 30% but 100%. Of course, the old factory buildings need to be renovated. New warehousing and logistics costs will also increase with the increase in production, and the number of workers will also increase accordingly."

    Wang Geng calmly clapped his fingers and said,

    "I did some rough calculations on the way here. If Pfizer only increases its annual production from 7 million pounds to 20 million pounds, this will be almost the annual demand in the U.S. market. Of course, as the price of citric acid drops, demand will continue.  Keep rising¡±

    "In this case, of your original working capital of 3 million US dollars, 1.5 million will be retained as production working capital under the new process, and the remaining 1.5 million can be used for technical transformation of production lines and factories, as well as an increase in warehousing and logistics labor."

    Anderson couldn't hide his shock. It was a pity that this young man didn't go into business. If Pfizer had such a successor, he could retire at any time with peace of mind. Look at the calm way he settled the accounts with his fingers. How could he look like a  Cadets from West Point Military Academy are definitely much better than top students from any business school.

    Wang Geng was chilled by the way Anderson looked at him. Damn it, I'm not used to being stared at so obsessively by an old man. This guy stood up from the sofa and continued to count the accounts with his fingers while walking around.  ,

    "In this way, Pfizer's total assets have not changed significantly, except that the production working capital has decreased from 3 million to 1.5 million, while fixed assets have increased by 1.5 million. However, Pfizer's annual output has increased from 7 million pounds to 21 million pounds.  pounds, and at least doubled the number of job opportunities for workers!¡±

    "Why do you think Pfizer produces the extra 14 million pounds of citric acid every year at the same cost?"

    Wang Geng took out another cigar from the cigarette case on the coffee table, sat back on the sofa, gently opened the package and rubbed the cigar with his hands, while looking at Anderson across from him.

    Anderson, immersed in Wang Geng¡¯s words, woke up from a dream and murmured, ¡°The extra 14 million pounds produced are the revolutionary changes brought about by the new citric acid process.¡±

    ¡°Nima, who are you talking about this?¡± Wang Geng frowned, lit a match to heat the cigar in his hand, and said,

    "The current market price of citric acid is US$1.25/pound. As the war progresses and Italian raw materials cannot come in, the price will continue to rise!"

    "You are right, but the annual demand in the U.S. market is only about 21 million pounds. If Pfizer's production is increased to 21 million pounds, it will inevitably collide with the 14 million pounds of production capacity of more than a dozen other companies.  The market price of citric acid in the United States will fall instead of rising!¡±

    Anderson came back to his senses at this time and resumed his demeanor as the head of Pfizer. His brain was not slow at all!

    "This is something you and Pfizer need to consider. There are 1.7 to 8 billion people in the world. The U.S. citric acid market only accounts for about 15% of the global market. And as the war deepens, the citric acid production of European countries has also declined.  They are all shrinking and declining, which is just an opportunity for Pfizer to show off its capabilities!¡±

    Wang Geng lit the cigar in his hand and continued to point out,

    ¡°If you look at the global market, even if Pfizer¡¯s production capacity is increased to 21 million pounds, it is far from enough to supply. Europe as a whole needs at least 60 million pounds. Adding Asia and North and South America, an annual output of 100 million pounds may not be enough!

    Of course, the premise is that the production capacity of European countries continues to shrink and the new technology will only be in the hands of Pfizer for a period of time!  "

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    If all dreams come true, even if the final market sales price drops by half, this will still be a huge business!

    Even if the production capacity is only increased to 21 million pounds in the first year and the price is reduced by 20%, Pfizer's turnover can increase to about 20 million US dollars, and the net profit can reach at least 10 million US dollars!

    "You should come up with a price yourself first, young man. Based on the prospects you have painted, old Anderson really can't make an offer!"

    Anderson took out a handkerchief from his pocket and gently wiped the sweat from his forehead. He felt that his heart rate was accelerating. He looked at Wang Geng opposite him eagerly, not knowing how much he could open his mouth.

    "14 million pounds of citric acid. The wholesale price of citric acid in the U.S. market is now $1/pound. If Pfizer wants to put this increased production into the U.S. market, the price will have to be paid to wholesalers.Discount, we don¡¯t say this is a price war, but high quality and low price is the only way to compete for market share.¡±

    Wang Geng blew out a smoke ring, "If Pfizer's marketing level was not so incompetent, it could still keep the wholesale price of citric acid in the US market at 80 cents/pound this year, 14 million pounds times 80 cents  /pound = worth $11.2 million¡±

    ¡°11.2 million US dollars?!¡± Anderson exclaimed in surprise!

    "What? Did I calculate it wrong?" Wang Geng was stunned by the old man's actions.

    "No, no, you are right. In fact, the price of citric acid in the US market is still rising. If we have a proper marketing strategy, we can definitely keep the wholesale price at 1 US dollar. Besides, we can also export it to Europe!"

    "It's just To tell you the truth, Pfizer's total assets at the moment are only 6 million US dollars 3 million US dollars of working capital and raw material inventory, 3 million US dollars of fixed assets, if your formula and invention are to be sold  11.2 million US dollars. .Pfizer can¡¯t afford this price!¡±

    Anderson is sweating more on his forehead. The temperature in the early spring at the end of February is actually not that hot in the room. It¡¯s just that the old Anderson is stumped by the huge opportunities in front of him and Pfizer¡¯s cash difficulties!

    "11.2 million US dollars is nothing. Pfizer made it back in one year without increasing investment. Of course, Pfizer's 3 million US dollars of working capital are mostly accounts receivable, which is used in the equipment modification of new processes and raw materials.  There will be a funding gap of nearly US$2 million in the short term for procurement.¡±

    Wang Geng thought to himself, Anderson, the old fox, finally paid the price. Pfizer¡¯s total assets are US$6 million?  I didn't expect it to be this much.

    "You're rightbut PfizerI promised Mr. Charles Pfizer that I would never let the company be acquired by others!" Anderson wiped the sweat from his forehead, and there was a war between heaven and man in his heart.

    If this young man takes the new process he invented to Pfizer's competitors, Pfizer will have no other way out except bankruptcy or acquisition.

    Unless the Pfizer laboratory can develop a new process on its own in the short term, and the technology of Pfizer's new process must be incomparable, Anderson is in a dilemma at the moment. Counting on the progress of James Curry in the laboratory, who knows when?  Any results?

    In fact, both Anderson and Wang Geng understand that if Pfizer accepts Wang Geng¡¯s offer now, it will lead to long-term development after a short period of pain and become a leader in the industry!

    "Either shutting out Wang Geng would be a weapon for competitors. Pfizer's fate of being acquired or going bankrupt in the future is inevitable!"

    Tobeornottobe?

    This is a difficult question before Pfizer General Manager John Anderson!
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