Return to 1958 and build a century-old giant

Chapter 904 Monopoly Objectives
Starting in the mid-70s, Pepsi began attacking Coca-Cola, and at one point it was quite effective. It even forced Coca-Cola to change its formula, but this was met with resistance from Coca-Cola fans, and the formula was eventually changed back.

“The law certainly governs shareholders’ investments,” Donald paused and said, “However, for two competing companies, no one can serve as a director of both companies at the same time. Mr. Yang is already a director of Coca-Cola, so he cannot become a director of Pepsi.”

“At Coca-Cola, I’m just a non-executive director with no real power,” Yang Wendong replied.

Coca-Cola was also reluctant to truly grant power to Yang Wendong, given that they were competitors in some areas. Yang Wendong himself didn't value power within Coca-Cola, and since he needed to cooperate with Coca-Cola, he gave his voting rights to the current CEO in exchange for their support in other areas of cooperation.

Donald said, "Even if they are just non-executive directors, they still have the right to know, which is not in accordance with U.S. law, and our board of directors will not allow it."

“Alright, I won’t insist on a position on your board of directors,” Yang Wendong replied. “But I hope we can also reach some agreements with PepsiCo.”

"Please speak," Donald said politely.

The person in front of us is not only a shareholder of Coca-Cola and Pepsi, but also has a huge influence in many other fields. Even the second largest beverage giant in the United States has to give him a lot of face.

Yang Wendong said, "I know that you had some thoughts about not wanting to continue cooperating with me on OEM manufacturing after my previous investment in Coca-Cola. Now that I have also become a shareholder of Pepsi, it should be considered a break-even point. So I hope that we can continue to cooperate."

"So, is your company also planning to cooperate with Coca-Cola?" Donald asked in return.

Yang Wendong smiled and said, "It's possible, I can't completely deny it, but I can't guarantee whether we can cooperate with Coca-Cola. After all, Coca-Cola has well-established partners in the Asian region. I won't force Coca-Cola to give me this market, but I might try to make contact."

The conditions proposed by Taikoo are quite good, but they haven't been agreed upon yet, so he hasn't accepted them.
Besides, even if he agreed to Taikoo, he wouldn't need to agree to Pepsi; those are two different things.

"Hmm," Donald frowned slightly;

Yang Wendong then asked, "Mr. Kendall, times have changed. The market and OEM manufacturing are gradually separating, which is common in many industries. The beverage industry is also showing this trend now, right?"
Therefore, requiring your suppliers to only manufacture your beverages is not a good decision. Only by diversifying your suppliers' order sources can you truly reduce costs.

“I’ve heard that Mr. Yang’s factory is the one with the best cost control under Pepsi, and I do admire that.” After thinking for a moment, Donald said, “Alright then, we will continue our cooperation as usual. If you do cooperate with Coca-Cola, I will not interfere, but our quality and price must not be compromised.”

On the one hand, Yang Wendong's contract manufacturing is not just contract manufacturing. Its industrial chain also involves plastic production, sugar production, and even upstream farms and ocean transportation. When these are combined, the cost advantage is huge. If PepsiCo wants to change suppliers, it will probably hurt itself first.
On the other hand, it is also the largest local conglomerate in Asia, controlling many retail sectors, and its relationship with Pepsi is comprehensive.

Yang Wendong smiled and said, "That's naturally not a problem."

"OK." Donald didn't want to get entangled with Yang Wendong any further on this matter, since it was all trivial. He then asked, "Mr. Yang, your company is currently acquiring PepsiCo shares on the stock market. How many are you planning to acquire?"

This is also important. Yang Wendong has become one of PepsiCo's major shareholders. Although he does not theoretically have the rights of the board of directors, he still has the rights of the shareholders' meeting. This point cannot be ignored.
If Yang Wendong were to resign from his position on the Coca-Cola board of directors, he could directly take over the board of directors of PepsiCo, which could even trigger a major reshuffle at the top of PepsiCo.

Yang Wendong said, "The target is 14.9, so I will make another announcement when the acquisition reaches 10%."

"Mr. Yang, even if you have a positive outlook on PepsiCo, isn't this an excessive investment?" Donald was immediately shocked.
The man before us owns multiple giant businesses in the United States and has invested in numerous tech and traditional companies. Now he's set his sights on PepsiCo. Just how much cash does he have? Or is this money obtained by pledging other stocks?

Yang Wendong said, "As I have said before, I am optimistic about the future of the cola industry, especially since Asia has a huge population market. When the Asian economy takes off, the demand for cola or other beverages will inevitably surge."

In fact, the biggest driving force behind the soaring market value and performance of Coca-Cola and Pepsi in the 80s was the Asian economic community.

Before that, these two companies had already monopolized Europe and America, and the market was very stable. After the 80s, billions of Asians were lifted out of poverty and became rich. Although they were not super rich, they could still afford to drink some sugary drinks.

Of course, another point is that the economic collapse in South America turned this market into America's backyard. In terms of public opinion, Coca-Cola was touted as a miracle drink, and many Mexicans drank it like water.
“I’m also very optimistic about the Asian market.” Donald paused, then added, “But your company also has its own beverage brand in Asia, right?”

Yang Wendong nodded and said, "Yes, but are you still worried? Any factory in the world can make Coca-Cola now, but who can actually succeed? My brand in Asia is just something I play around with in a local area."

In the cola industry, trying to get a share of the market from Coca-Cola and Pepsi is extremely difficult, and there is no successful case in human history.

His Very Cola's main strategy is to enter the domestic market as early as possible, seize the opportunity, and seek to gain some opportunities in the mainland market. Yang Wendong has no confidence in other places. He can only say that he can do what he can by relying on Carrefour and other retail channels.
Even so, in the domestic market, if a three-way balance of power can ultimately be achieved, it would be considered a great success.

“That’s true.” Donald smiled. In the cola market, they weren’t worried about any other players besides Coca-Cola.

Yang Wendong added, “Mr. Kendall, you should know that Pepsi is a publicly traded company that has been around for a long time, and there are many idle shares on the secondary market.”

"Since you can't stop me from becoming a major shareholder, how about we negotiate? Your company can issue me a private placement of shares. This way, I can save some money, and Pepsi will get enough funds. What do you say?"

When you buy stocks on the stock market, the money goes to the shareholders. Investing too much capital can drive up the stock price, increasing your own acquisition costs. There is also a high degree of uncontrollability. PepsiCo itself doesn't get a single penny in return.
However, if it's a share issuance, both parties can negotiate a price, and PepsiCo can also get a large sum of money.
Of course, this approach will reduce the equity of Pepsi's existing shareholders, but such a long-established American company basically doesn't have any major shareholders anymore.

Donald didn't refuse outright, but said, "I need to discuss this with others." "Of course, I hope we can reach an agreement as soon as possible," Yang Wendong said with a smile.

In the UK and the US, acquiring shares in these companies is easy. As long as you have enough money, regardless of whether the other party agrees or not, you can definitely get the shares you want by spending a little more money.

On the contrary, European countries such as Italy, Germany, and France are full of family-controlled, non-listed companies. Even if Yang Wendong knew that there were companies among them with extremely high returns on investment in the future, he was helpless.

“Okay, I will convene a board meeting as soon as possible,” Donald nodded and said.

Yang Wendong added, "There's one more thing. Pepsi's sales in Southeast Asia have been increasing recently, and the Asian economy is also developing better and better. Since we have already agreed to continue our cooperation, for strategic considerations for the future, I plan to build a super-large production plant with an annual production capacity of about 10 billion bottles."

"Such a large scale?" Donald was also somewhat surprised.

Yang Wendong said, "Yes, the larger the scale, the more cost can be reduced. Recently, oil prices have started to fall, and relations between the United States and Saudi Arabia have improved. I estimate that oil prices will not be high for a long time to come, so it would be more cost-effective to put the factories together."

Donald asked, "Are you planning to put it in Hong Kong? Labor costs in Hong Kong are quite high these days."

“I know, that’s why I plan to put it in the mainland,” Yang Wendong said.

Donald then asked, "Labor costs in mainland China are indeed much lower than in Hong Kong. I agree with small investments, but such a large scale? Why not consider Southeast Asia or India, where labor costs are also very low?"

Yang Wendong shook his head and said, "If you are not willing, I can invest on my own and then continue the cooperation."

In the past, during the period of conflict between the University of Tokyo and the University of the West, the University of the West intended to industrialize Southeast Asia and India, but forgot that in the 50s, Southeast Asia, India and the West and even the United States had a good relationship. The University of Tokyo only began to attract foreign investment to develop industry after the 80s.

The reason for this is obvious: many Southeast Asian and Indian countries are simply incapable of paying their dues.

Yang Wendong's factories in Southeast Asia have encountered similar problems. The local indigenous people are too inefficient, so he has to try to hire local Chinese.

However, after hiring Chinese people, the locals started causing trouble, which was extremely annoying.

Yang Wendong knew about these things as early as the 70s, but he handed them over to his subordinates to handle. He didn't want to see them and was just waiting for the reform and opening up of the mainland to completely solve the problem.
The fact that the University of Tokyo will be able to attract workers from the surrounding areas and even the world in the future is not an accidental success, but an inevitability.

After thinking for a moment, Donald said, "Alright, you're the supplier, so we won't interfere too much with where you invest. Since I feel there's a risk, then we won't invest. However, we will be involved in the quality process from start to finish."

Based on past experience, although PepsiCo may outsource some of its production, it will still participate in the investment, which is normal behavior for large companies.

However, they will refuse when they feel there is a risk.

"Haha, of course. Your company can send relevant quality and technical experts to accompany us on an inspection trip to the mainland." Yang Wendong naturally had no objection to this, as his company managed its suppliers in the same way.

Donald didn't think much of it and nodded, saying, "Alright, I'll organize professionals from all sides. Once you in Hong Kong have confirmed the time, just let us know."

“Okay, it’s a deal.” After agreeing, Yang Wendong added, “However, in order to maximize our profits, we still need to investigate other places, such as Taiwan, Malaysia, Singapore and so on. Diversification will allow us to obtain the greatest benefits in Taiwan.”

“Okay, I understand.” Donald smiled; he naturally understood this most basic business investment logic.

A trip to New York couldn't possibly be just about Pepsi;
After visiting PepsiCo, Yang Wendong also visited financial institutions such as Goldman Sachs and Citibank to discuss future cooperation matters.
The most crucial aspect is naturally KFC's IPO. After extensive negotiations, Yang Wendong selected Goldman Sachs and Morgan Stanley as the underwriters for KFC's IPO, with the listing date set for the middle of next year.
This will also be a large-scale financial event;

After that, Yang Wendong went to Los Angeles and met with Spielberg again to observe some of the filming of "E.T. the Extra-Terrestrial". However, this was just an observation, and Yang Wendong did not offer any opinions.
Even as the boss, Yang Wendong never interferes with professionals; he only needs to invest in the film, and getting some sponsorships is equivalent to advertising for his company.

Subsequently, I checked the performance of Best Buy, Honor Electronics, and other companies in the United States, and their respective projects were developing quite well.

When these giant companies have developed to such a level, he, as the founder, can actually rest easy, because the entire ship is already sailing smoothly in the right direction under his leadership;

In the future, I only need to pay attention to the development direction occasionally, especially since retail giants like Best Buy have a monopoly, leaving virtually no room for others.

As for Honor Electronics, its monopoly in the gaming industry is similar. However, there is no permanent monopoly in this industry. Only by becoming a platform can one achieve this. That is what it needs to do next.

PS: Please give me a monthly ticket
(End of this chapter)