Life Game In Other World
Chapter 696: Consortium (Extra Large - for Monthly Tickets)

Chapter 696: Chapter 696: Consortium (Extra Large Chapter for Monthly Tickets)

Kaye City·Nolanka Building Penthouse

"I’ve said it before, these are decisions you can make on your own. I dispatched you because I value your relentless spirit in getting things done. Don’t be indecisive. Just go for it with confidence,"

With her hair curled into waves and still wearing a crisp white shirt and a pencil skirt, Lina rubbed her temples. Then, with her hand on the office door handle, she continued,

"If that chain supermarket won’t let us in, then go around them. Finish visiting the districts on the south side of Vitland first. It’s impossible that the Kajet Group has secured all the supermarkets and convenience store chains. Settle down and get to work.

"Start with the smaller supermarkets, then figure out a way to break through the online channels. Do as we’ve previously discussed, step by step. If it doesn’t work out, we’ll come back and discuss it again. That’s all."

After finishing, she hung up the phone, rubbed her temples again, took a deep breath, twisted the doorknob, pushed open the office door, and looked inside, "Secretary Danny Lowe, I just got off the skycraft and am a bit late..."

Because of Vian, she had a good relationship with old Danny, but personal relationships were kept private; in formal settings, she maintained a very formal address.

However, her slightly apologetic words were cut short, and she froze in place.

At that moment, inside the board of directors’ secretary office, Secretary Danny was standing by the wall-mounted coffee machine, his back to her, seemingly making coffee, while a tall and handsome young man sat on the sofa nearby.

He held a steaming cup of coffee and was looking up at Lina, who had just come through the door.

A gentle smile curled on his firm cheeks, "Long time no see."

Lina, looking at the familiar yet somewhat altered side profile, found herself momentarily stunned. For some reason, her heart began to calm down.

The frustrations and helplessness that had clogged her heart dissipated like clouds blown away by a spring breeze with his "long time no see."

That man always had this silent, heart-soothing power.

A faint smile appeared on her cheeks as well, and she slowly walked into the office, responding, "Long time no see."

"Would you like a cup of coffee?"

At this time, old Danny also turned around, smiling as he handed Lina the freshly made coffee.

"Thank you."

Lina paused for a moment, then accepted the coffee.

Sitting on the sofa was naturally He Ao. He took a light sip of his coffee, glanced at Danny, then at Lina, "Have a seat, we were just talking about you."

"Ah?"

Lina casually took a seat on the side of the sofa, surprised by He Ao’s words.

"Danny said you’ve taken on the food development project. How’s that going?"

He Ao set down his coffee on the table and asked softly.

"Not very well,"

Hearing this, Lina collected herself, explaining in a moderate tone, "Actually, it’s pretty bad."

With the question, those jumbled thoughts once again flooded her mind.

But looking into He Ao’s calm eyes, her anxiety once again began to settle, and she sipped her coffee, organizing her thoughts before continuing,

"During your ’slumber,’ we made some breakthroughs in certain food technologies and developed some synthetic steak products with a better taste. Not only are these products sold in Kaye City, but they are also sold in other cities,

"Thanks to our competitive pricing and ’value for money,’ these products have made significant progress in some cities, seizing a portion of the market share."

"However,"

She paused slightly in her tone, "These products faced resistance from the grain industry monopoly alliance. Although we joined the alliance as soon as we started producing food, our influence paled in comparison to the two giants of the alliance, Mosanto and Kajet.

"Especially the Kajet Group, they are a rising grain industry giant, very domineering in their approach. When they discovered we were trying to enter the grain industry, they immediately ’targeted’ us.

"First, they communicated with all of the supermarkets and convenience stores supplied by them, banning these outlets from stocking our products through threats and inducements.

"Then, for several of our best-selling products, they released several competing products and engaged in a price war with us. The prices of some products were even below the cost of raw materials. Even with their own farms and factories, they couldn’t possibly lower costs to such an extent."

"So they are losing money in a price war with us, trying to directly squeeze us out?"

He Ao took another sip of coffee and continued asking.

"Yes,"

Lina nodded, "This is a tactic often used by Kajet Group. Over the years, they’ve squeezed their peers by splashing cash on subsidy price wars and massive publicity, then after all the peers have been squeezed out, they directly hike the prices to far above the original levels, relying on their technological advantages and monopoly status to earn huge profits."

This type of competitive maneuver is quite common in the Federation, especially prevalent when large consortiums suppress emerging small enterprises.

The large consortiums will lower the price of specific competing products, relying on the cost advantage of scale, to test the price down to a relatively low baseline. If this still doesn’t kill the competition, the consortium headquarters will subsidize the price war, taking the price below the cost line.

Strictly speaking, this is actually a type of financial operation.

Besides technological advantages, subsidy price wars are more of a contest of who has more robust capital, which inherently favors large consortiums with substantial capital.

Unless another large consortium enters the fray, even a slightly promising small enterprise would be wiped out by this tactic.

To put it plainly, this has moved away from the merits of the product itself. It’s now about capital competition.

Of course, this kind of fight is still effective against a cross-industry large consortium like the Nolanka Group.

Usually, a new large consortium from another industry entering the sector will receive a show of force from the established large consortium of that industry, triggering a potentially debilitating war.

This war goes on until one party cannot endure the strain any longer and is forced to negotiate a truce.

Either the new enterprise survives and the old alliance decides to retreat, forming a new monopoly alliance with the new enterprise,

Or the new enterprise is outright expelled from the industry.

Of course, regardless of the outcome of such battles, the monopoly alliance will significantly raise prices, to cover the previous losses and ensure a profit.

However, usually, these debilitating price wars are only launched when the new enterprise poses a slight threat, since such battles involve a substantial loss and a high cost of investment.

Given Nolanka Group’s current market share, they should not have crossed the industry’s red line yet.

For Kajet Group to initiate a strike and a price war at this stage is rather aggressive.

"After all, Kajet Group is a young large consortium. They are overbearing and aggressive, like a rabid dog, just to show they are not to be messed with and avoid attracting attacks from other consortiums. Although their behavior in the market really is too much like a rabid dog, it has resulted in making too many enemies,"

He Ao calmly summarized the current situation, "However, such obstacles are inevitable in our development. Kajet Group is just the beginning."

"Yes,"

Lina also nodded in agreement and softly said as she looked at He Ao, "Not just Kajet Group. As we move further into the grain industry, Mosanto and the original large grain industry consortiums will certainly join in too. Given our current cash flow, it’s highly unlikely we can withstand that kind of battle."

"Danny, what’s the current rate of food self-sufficiency in Kaye City?"

He Ao turned to Danny.

"Master Vian, after two years of development, we have almost an 80% self-sufficiency rate for our grain now,"

Danny answered slowly.

"What about including Rock City and Limen City?"

He Ao further inquired.

"The self-sufficiency rate is no more than 40%,"

Danny looked at He Ao and continued,

"Currently, we’re not only facing a strike from Kajet Group, but our grain production technology has also hit a bottleneck. Moreover, Kaye City, Rock City, and Limen City are not suited for grain production and lack sufficient grain factories. To supply so much grain, we need a dedicated grain production base."

"I understand,"

He Ao nodded gently, pondered for a moment, and continued asking, "How about the medical side?"

"Qiming Medical College is now operating very well,"

Danny took over the conversation,

"The first batch of one-year trainees from the medical college has already begun internships at Qiming Medical Colleges in Kaye City, Limen City, Rock City, and Dawn City.

"Besides some who were already practicing as underground doctors, most of them are young people newly admitted to the school. After a year of accelerated learning, they can’t perform surgeries, but under the guidance of experienced doctors, they can handle minor illnesses like headaches and colds. Of course, as you previously mentioned, schools have also taught them a lot of health care knowledge, and while treating patients, they also advise them on some basic health care knowledge."

"What about the medical prices?"

He Ao continued, "Is there a high volume of patients being treated in the hospital?"

"We’ve registered a ’Pete-Qiming Charitable Foundation’ as previously arranged, which donates and subsidizes the hospital. We then reduce the outpatient fees in the name of subsidies,"

Danny answered, "The hospital has attracted many people without medical insurance. There are many from Dawn City who travel several hours by bus, across districts, to visit Qiming Hospital. Essentially, every intern’s schedule is filled up every day."

The medical profession is highly dependent on experience; seeing more patients and encountering a variety of difficult and complex cases, along with studying, allows these interns to rapidly develop.

New doctors will become senior doctors, and senior doctors will in turn train new doctors.

At any rate, although one can predict there will still be tough roads ahead, the first step has been taken at least.

"What has the Medical Consortium Alliance been saying?"

He Ao inquired.

The Nolanka Group had only sold a bit of grain and already faced a severe attack from the Kajet Group, and with a bigger impact on the medical consortium, they wouldn’t remain unresponsive.

Moreover, Qiming Hospital also reduced medical fees. Although it was done through subsidies from the charitable foundation, which is just a roundabout way that only looks good on the surface, all the major consortiums are well aware of the reality.

"The Medical Consortium Alliance is still trying to poach our doctors, attempting to restrict their medical practice licenses and control the sale of our medications,"

Danny explained,

"However, these actions haven’t caused us too much trouble for now,

"One reason is that Stars Pharma and Welme Medical Consortium, two entities of the Medical Consortium Alliance, have been involved in major scandals over the past year, which heavily tarnished their public images. So they are much more cautious in their actions and haven’t overstepped significantly.

"Also, due to the setbacks faced by these two major consortiums, many smaller members of the Medical Consortium Alliance are trying to capitalize on the situation and seize a share of their market, so they are too preoccupied to pay much attention to us.

"The second reason is that Christos’s medical reforms have set off a trend, and now many major cities are implementing medical reform bills similar to those in Dawn City. There are even rumblings of such legislation in the Federal Assembly,

"So, as you previously anticipated, aside from internal struggles, the Medical Consortium Alliance’s main focus is still on the medical reform bills of Christos and Dawn City.

"The above two reasons mean we currently have a relatively favorable environment for development, but this environment is unlikely to last long."

After listening to Danny’s analysis, He Ao nodded.

Overall, the current situation had not exceeded his initial estimations.

Christos was taking the brunt of the attention and attacks, providing Nolanka Group with the opportunity to develop.

"What about the industrial side?"

He continued.

The Nolanka Group itself is an industrial conglomerate, and Kaye City is an industrial city.

Industry is the cornerstone of the Nolanka Group.

"The funds we obtained from financial operations have been entirely invested into expanding production,"

When it came to his main business, Danny sat up straight, "During this period, we’ve opened many factories. It’s rare to see any outright unemployed vagrants in Kaye City now.

"And after Limen City joined our market, many of the previously unsold products found their outlets, generating cash flow from exports that further enabled us to enhance our reproductive capacity.

"The first batch of employees, due to stable incomes, have improved expectations for the future, are willing to spend more money, and have more money to spend. Now, we have less and less product backlog, and our cash flow is becoming healthier."

To put it simply, the wheel has started turning on its own momentum and is no longer as difficult to spin as at the beginning.

"Hmm,"

He Ao nodded as he lifted his wristband and flipped through it. Having recently woken up, he asked as if contemplating, "But I’ve noticed that the recovery in consumption seems to be less than expected? The wages we’ve distributed don’t seem to be spent much on consumption?"

This is not a good situation; without adequate consumption and an inability to explore new markets, the group’s cash flow will still be tight and goods will accumulate.

When He Ao asked this question, Danny looked at Lina.

Clearly, this fell within Lina’s responsibilities.

Originally, He Ao’s primary task for Lina was to handle publicity. This was not only about conveying the group’s intentions downward but also about gathering information from below and reporting back up.

"Because of debts,"

Lina nodded and whispered, "Most employees of the group, especially the previously unemployed ones, carry a significant amount of debt from financial companies.

"Take credit cards as an example", credit card companies cover up their real interest rates with various installment policies and various fees. The annualized interest rates for most credit cards in the Federation are over 16%, and for employees at the grassroots of companies, the interest rates on the money they can borrow typically exceed 20%, while the interest rates for medical installment loans are often even higher.

"Currently, the Federation’s loan interest rates are linked to the user’s credit rating—the higher the credit rating, the lower the interest rate, and the reverse is also true."

"The operating rules of financial companies are essentially to lend money to the wealthy who can afford to repay and to the poor who can’t afford to pay as much, they have to pay more interest to borrow the same amount of money."

"And those former unemployed itinerant workers, after losing their jobs, have the lowest credit ratings, which means they get the highest loan interest rates. For most workers, the bank loan interest can reach a staggering 36%, or even higher."

"Moreover, no matter how much low-interest debt they previously borrowed, the debt they eventually have to bear is high-interest."

"Because even if they had lower interest debts in the past, as they become unemployed and cannot repay when debts mature, they still have to take on high-interest debts to pay off the low-interest ones, generating debt to pay debt, and in the end, all debts are high-interest."

"In fact, many of our employees have gone through bankruptcy liquidation, but bankruptcy laws in the Federation do not mean that individuals no longer need to pay off debts after they declare bankruptcy."

"After their bankruptcy, they simply enter a stage of bankruptcy protection. After auctioning off all their assets, the leftover income each month—they’re allowed to keep a part for living expenses, and any amount beyond that is garnished to pay off their debts."

"Of course, some employees choose to extend their debt, accepting higher interest rates and longer debt terms in exchange for lower debt repayment amounts."

"While they were itinerant, they naturally didn’t care about these, as they had no income and thus no concern over debt interest."

"But once they accept employment from the Nolanka Group and try to start their lives again, these debts become a serious hindrance and limitation to their lives."

"An individual burdened with an annual interest rate of 36% on their debts will spend a significant portion of their income repaying the bank’s debt, and a large part of this debt will consist of bank interest. For many, the interest on their monthly repayments may even be far higher than the principal."

Lina looked at He Ao, "Just like you showed me in Professor Serle’s book, a large portion of those employees’ labor productivity is taken away by financial companies in the form of ’interest’, becoming the profits of those financial companies,

"And after their labor productivity is taken away, they have less disposable income, leading to decreased purchasing power, and naturally, consumer recovery will not be as expected."

"What’s your solution?"

He Ao looked at the two people in front of him, knowing they must have prepared a solution.

"The lowest-cost solution is to wait—wait until everyone’s debts have been paid off bit by bit, and the disposable money will naturally increase,"

Lina replied.

"Time is a great healer," He Ao nodded slightly, "but perhaps we do not have much more time."

"There is one method,"

Lina hesitated, then said slowly, "Through preferential loans from the Nolanka Bank for group employees, high-interest loans can be replaced with low-interest ones. This would allow most of the interest being taken from them to be retained and even extend the terms of the debts to improve short-term spending power.

"This can liberate a portion of consumption. We’ve tried this for a while in Kaye City, and the effect was very good."

She paused, "But this approach requires a significant cash flow. In essence, it’s using our money to pay off the financial companies that provided the original loans. Although these funds will gradually return after the first month, a large amount of capital is needed to achieve a good effect in the initial phase.

"And our cash flow is already minimal."

"To summarize,"

He Ao looked at Lina with a smile, "We’re short on money. Solving the food development issue requires money, and to ease consumption blockage and continue driving industrial development also requires money—our problem is that we’re out of money."

While being out of money might slowly grind on, He Ao did not know if the Nolanka Group had so much time for development.

"Mm."

Lina nodded.

As she watched He Ao’s smile, for some reason, she felt that some consortium was going to be in trouble.

He Ao picked up his coffee that had gone somewhat cold and took a sip, then turned to Danny, "Danny, has Mr. Fiss returned?"

"He should have arrived."

Danny glanced at the time on his bracelet.

Fiss, the B-level Captain of the Nolanka Mercenary Corps."

He Ao slowly stood up, "Let’s go meet him."