Gable's face was filled with excitement, and he couldn't help but stand up and shout loudly.
"Excellent, that's brilliant, Allen! Hearing you say that, that fellow named Croft is doomed!"
After all, what Allen said was too good.
Jones and Miller, among others, also showed admiring expressions.
However, after a brief gasp of admiration, Catherine was the first to discover a hidden concern within this strategy.
She walked to the blackboard and pointed with her finger to the area representing the Bowery District market.
"Sir, your brand strategy will undoubtedly consolidate our position in the mid-to-high-end market and even elevate Mr. Tilford's 'Gold Label' series to new heights. But…"
Her tone gradually became serious.
"I analyzed Mr. Gable's sales data for the past week, and the Red Label series' sales indeed dropped by fifteen percent.
And almost all of the lost customers switched to Croft's cheap products. This means that in the Bowery District, at least fifteen percent of customers are absolute believers in price.
Our advertisements, our brand story, may not be able to persuade them."
Then she looked at Allen and voiced her most core concern.
"This way, we are, by default, handing over this portion of the market to Croft.
Although this market has meager profits, its vast sales are enough for Croft to survive, and even… thrive.
We've raised our flag on the mountaintop, but we're letting the enemy dig at our foundations at the foot of the mountain. This isn't right."
Catherine's words were like a bucket of cold water, instantly cooling the optimistic atmosphere that had just ignited in the office.
Mr. Gable also frowned.
"Miss Catherine is right. Croft is like a rat in the gutter; though he can't make it to the big stage, he breeds quickly and can endure hardship. As long as he has something to eat, he won't die. In the long run, he'll be a menace."
Everyone's gaze once again focused on Allen.
Allen's smile, however, did not diminish in the slightest. He looked at Catherine, his eyes full of approval.
"Catherine, you are even more outstanding than I imagined."
"You've seen the second, deeper layer of the problem. That's right, we cannot give him any room to survive.
An opponent who only knows how to wage price wars is like cholera; we must eradicate him completely before he spreads."
On the other side of the blackboard, he drew a new battle line.
"The three points I just mentioned are overt strategies, our frontal battlefield. Their purpose is to build brand barriers and expand upwards."
After a brief pause, his voice took on a hint of icy coldness.
"And now, I will tell you how we will fight our flank battle."
"We cannot lower the price of the Red Label. That is our face, our foundation."
"But who said we only have one brand?"
Hearing Allen's words, no one present was a fool, and they immediately understood Allen's idea.
"Yes, as you all thought, I will immediately register a new brand."
Seeing everyone's enlightened expressions, Allen nodded and continued to write a few large characters on the blackboard.
"This brand will be completely new, with no connection to 'Williams.'"
"Its name must be simple and vulgar, full of the spirit of working people. Let's call it… iron man."
"The label should be printed on the cheapest paper and ink. There should be no superfluous patterns, just a silhouette of a worker vigorously swinging a hammer."
A playful curve appeared at the corner of Allen's mouth.
"Its taste doesn't need to be excellent, and it doesn't even need to use pure beef. Doesn't Bill have a large backlog of pork and chicken scraps? Let's use them all, add more potatoes, more onions, just enough to fill a stomach."
He looked at his team and threw out the most core and most fatal part of this plan.
"And its price, our Iron Man Stew, the retail price, will be twenty-four cents!"
Twenty-four cents!
It was only one cent cheaper than Croft's twenty-five cents!
At this moment, even Catherine gasped.
She instantly understood the business logic behind Allen's plan.
Her voice trembled slightly from the realization of its horror.
"Sir, you… you mean to…"
"Exactly, it's just as you thought…"
"Croft's workshop is small, inefficient, and his raw material costs are higher than ours. I've calculated that if he sells for twenty-five cents, his net profit per can won't exceed two cents. He's using that meager two cents of profit to survive."
"And us? With our efficient production lines and nearly zero-cost scraps provided by Metropolitan Meat United Company,
if we sell for twenty-four cents, each can can still yield at least two or three cents of profit. Though insignificant, we're not losing money, are we?"
"Now, imagine this scene."
"When Croft discovers that a competitor, one cent cheaper and even slightly better tasting, has appeared on the shelves, what will he do?"
"He can only… lower his price!" Mr. Gable exclaimed.
"Exactly! He'll drop to twenty-three cents, or even lower!" Allen laughed, "And our 'iron man canned food' will play along with him. He lowers by one cent, we lower by one cent. Wherever he drops, we follow."
"The ultimate result is," Allen delivered his final verdict, "he will fall into a death spiral of losing money on every can sold. And at most, we just won't make a profit. He is fighting our money-printing machine with his own blood. How long can he last?"
The office fell into a dead silence.
Everyone looked at Allen with eyes that seemed to see a devil.
This was a dimensionality reduction strike, an annihilation battle that was unequal from the start, aimed at completely crushing the opponent!
"The overt strategy: use the 'Williams' brand to capture customer mindshare and earn high profits."
"The covert strategy: use the ghost of 'Iron Man Stew' to engage in close combat and drain the opponent's last drop of blood."
Allen looked at his two battle lines, one overt and one covert, one ascending and one descending, and nodded with satisfaction.
"Catherine, you are secretly responsible for the production and promotion of Iron Man Stew. Besides those present, I don't want any worker in the company to know the relationship between this brand and us."
"Jones, you are responsible for adjusting the production line, setting aside one specifically for its production."
Allen finally looked at his old friend.
"Mr. Gable, this good show still needs you as the best supporting actor. I need you to 'casually' reveal a piece of news to Mr. Croft."
"What news?"
"Just say that a new hothead has come to town, doesn't understand the rules, and is snatching market share by losing money. You can even complain to him that your business has also been affected.
Make him feel that he and you are victims on the same front. Let him unleash all his anger on the 'hothead' we created."
A trap for Croft was subtly laid by Allen.
The poor tinsmith was still gloating over having captured a portion of the low-end market.