Outsourcing.
It was a word that not only carried many meanings but also implied personal or collective views close to prejudice.
Of course, in 1997, the use of this word was not that frequent, and it did not yet carry negative preconceptions.
Therefore, if used well, it could avoid leaving cases of side effects like in the previous life.
“Simply put, it’s about subcontracting to external companies. The brand remains as MP-MAN of 【Alpha Cast】.”
“Ah, yes, I roughly understand the meaning of outsourcing. We also supply car stereos to the original contracting company. Are you perhaps referring to overseas production? Like how 【One Computer】 outsources modem production to a US company?”
“Of course, OEM is also included in outsourcing, but for now, we need to produce domestically. Overseas production costs money too.”
He understands this well.
This time, 【One Computer】, in which Kim Yoon-soo’s father, Kim Dong-baek, had invested in some facilities, had shared investments for parts and manufacturing design with the original contracting company in the US.
In fact, there were countless examples of contracts between original contractors and subcontractors, so it was hard to pinpoint a precise regulation.
Among them, Lee Hyun-woo presented a wise method.
“Knowing the high popularity of MP3 players, many companies will flock to it. Some might even come with investors. Then, Mr. Jung, you can invest in shares.”
“Invest in shares?”
“Yes, you take a portion of the shares of the subcontracting company. The reason for this is to aim for a kind of collateral effect. Since the original contractor has its shares involved, it continuously manages to produce products as good as those from its headquarters. The subcontracting company, in turn, makes its best effort based on the trust that comes from the original contractor’s share involvement.”
“Come to think of it, it seems similar to the relationship between 【Jungle】 and 【Alpha Cast】, doesn’t it?”
Oops, he got caught.
Lee Hyun-woo slowly nods with that expression.
“The type is slightly different, but it’s hard to completely deny it. I’ll just acknowledge it as a fact.”
“So that’s why you always pay attention to our company. You were deeply involved in the start and process of the MP3 player.”
“Haha…”
Lee Hyun-woo gives an awkward smile.
In fact, it can be said that it was a connection of the value chain for ecosystem creation.
‘It’s not wrong to see it that way.’
For the sake of trust, it’s better to be honest.
“That’s right. 【Alpha Cast】 has to do well for 【Jungle】 to do well. The more MP3 players sell, the more MP3 files are downloaded.”
“Yes, I roughly expected it. Anyway, I think I can understand your intentions almost 100%.”
Jung Sung-woo smiled brightly as he looked into Lee Hyun-woo’s face.
“Understood. I will find an outsourcing company.”
“One more thing.”
“Please go ahead.”
“You need to partner with a large corporation.”
“A large corporation…?”
“Yes, that’s right.”
Seeing Jung Sung-woo’s eyes waver, Lee Hyun-woo took a deep breath and said.
“Of course, you might be hesitant. Worried that your technology might be stolen?”
“Yes, somewhat…”
“That’s why you filed for patents. That too for parts and design, separately and in detail. However, if a large corporation decides, they can steal the technology and create replicas that are legally distant but financially close. Or rather, they might even evolve it.”
There will inevitably be things that can’t be avoided.
However, by that time, 【Alpha Cast】 would become a target for large corporations to absorb.
Having seen such cases frequently, Lee Hyun-woo proposed a realistic compromise.
Jung Sung-woo sighed and nodded.
“Hah… Yes, that’s right. I’ve experienced it in the car stereo sector. The original contractor pressured us to jointly develop and patent what we had developed.”
“First, partner with 【Guseong Electronics】. I’ll mediate. You can boldly demand that they purchase the core technology to produce. Then, every time 【Guseong】 sells an MP3 player, they will pay royalties.”
Lee Hyun-woo’s voice was strong.
It was the kind of strength that seemed to make even large corporations unable to move.
“If that happens, other large corporations won’t easily plagiarize. Rather, they will follow what 【Guseong】 does.”
“Instead, it will become a technology development competition for the next product from then on.”
“Are you scared? Afraid you can’t beat the large corporations?”
“It’s not easy, is it?”
“…….”
“Of course, I will do my best to beat them.”
At this resolution, Lee Hyun-woo smiled gently.
And although he didn’t promise aloud,
‘Don’t worry, I’ll do my best to help.’
He vowed internally.
He would support 【Alpha Cast】 until it got on track.
It had shares of 【Jungle】.
He couldn’t overlook it.
Moreover, he wanted to make them pay proper technology usage fees this time.
That way, they could also improve the practice of sneakily stealing subcontractors’ technology while paying royalties diligently to overseas companies.
‘Is it time to meet Kim Tae-hyun?’
Lee Hyun-woo, who always took responsibility first in his past life, acted the same in this life.
Once he started, he would see it through to the end.
If Kim Tae-hyun would meet him immediately upon request, it was clear that he thought highly of him.
The heir of 【Guseong】 was busier than expected.
As expected, his tone reflected his busyness.
“What’s up? Is it because of the trip to Japan?”
“No, it’s about the MP3 player.”
“Oh, that…? You recommended making an MP3 phone last time, didn’t you? So I gave instructions.”
“Huh? Really?”
“Yeah, they’ll probably contact 【Alpha Cast】. Don’t worry too much, we’ll pay the proper technology usage fees. But…”
“…….”
“We’ll make MP3 players before the mobile phones.”
“Alright, do that. Just make sure to pay the proper technology fees. Oh, and later, when it comes to after-sales service, you can negotiate the usage fees while forming a business partnership. 【Guseong】’s after-sales service is well-known.”
“You’re giving me every bit of advice. I’ll handle that.”
Kim Tae-hyun chuckled.
Feeling like a rerun of their previous conversation, he quickly downed his coffee and tried to wrap it up.
“Oh, right. Also, my trip to Japan will be a bit delayed this time.”
“You mean you won’t enter on the same day?”
“Yeah, that’s right. I’m busy with the company we recently acquired and have to pay attention to the network equipment facilities, so I have to manage my time.”
“You’re a complete workaholic.”
“Hearing that from you feels odd. I thought you were the workaholic.”
For a moment, Lee Hyun-woo felt disheartened.
No matter how much he struggled, he seemed like a workaholic from the outside.
‘But I won’t give up.’
Lee Hyun-woo decided to use it as a whip to strive harder for work-life balance.
“That means I’ve succeeded. In reality, I leave work on time and spend evenings and weekends happily.”
As he said this, why did Kim Ah-young come to mind?
Feeling more pricked in front of her older brother, Kim Tae-hyun, Lee Hyun-woo quickly supplemented his previous words.
“Yes, but when I work, I tend to be a bit loud.”
“Got it, kid. Oh, one last thing.”
“When will the last thing ever end?”
“This time, really the last. Just in case, I’m saying this for you to check, but you know the Japanese electronics companies?”
“For example, 【Sonic】 or 【Panasoni】?”
“Yes, if they are interested in MP3 players, you should be cautious. They have an incredible amount of know-how in music playback devices.”
“Thank you for the advice. I’ll make sure to check the industry trends when I go to Japan.”
That was already the plan.
However, the reason was not the caution Kim Tae-hyun mentioned.
‘Even in this life, I bet on Japanese electronics companies underestimating and isolating themselves as Galapagos against Korean companies.’
Fundamentally, Japanese electronics companies tended to look down on Korean electronics companies around this time.
In the previous life, Japan was intoxicated with its top-notch analog technology and failed to cope with the advent of the digital age.
And instead of making bold investments with long-term vision, they continued short-sighted management focused on short-term sales and profits.
The highlight was the Galapagos syndrome, where they started making products only for Japan, by Japan, and for Japan.
【Sonic】 and 【Panasoni】’s products, especially smartphones, eventually ended up being used only by Japanese.
Even if the past and present lives are different, this historical trend seemed unlikely to change.
‘To confirm that, I need to go to Japan and closely observe the industry trends.’
Meanwhile, Honda Yoshiya, a reporter from 【Japan Gei Zai Newspaper】 who arrived in Japan after a long time, managed to arrange a lunch appointment with his senior, Sasaki Masahiro, who worked at 【Sonic】.
On the day of the appointment, Sasaki, who came out with neatly combed hair, met Honda and, after exchanging daily conversations, asked,
“So, MP3 players are selling well?”
“Huh? Were you also watching it closely, senior?”
“You kept warning me, so I took an interest. It is intriguing.”
“I’m glad. It’s good that you changed your mind.”
“What do you mean by changing my mind?”
“…….”
Honda Yoshiya, about to suggest that Japan should also produce MP3 players, which were creating a sensation in Korea.
But just when he thought the conversation was opening, it hit a brake.
“You didn’t change your mind?”
“Of course not. The fact that MP3 players are selling well is just an optical illusion, isn’t it? Upon investigation, the production volume is extremely low. It sold well thanks to the promotional efforts by a portal site called 【Jungle】 and celebrities.”
“It’s true the production volume is low. But that’s because it’s a small business, and there are probably back orders beyond imagination.”
“Like you said, it’s limited because it’s a small business. What will they do if it breaks? Can a small business provide proper after-sales service (AS)?”
“That’s a trivial issue.”
“That’s a critical issue. AS is very important. Fundamentally, I bet the individual parts of the MP3 player are roughly made. The yield rate of Korean small businesses is different from Japan.”
Honda Yoshiya frowned.
Because the conversation was revealing all the problems of Japan that he had observed while in Korea.
The problems he saw in Japan.
When everything is considered as 100, they put in an effort of 120.
They call it craftsmanship, and society praises it, but from a Korean perspective, it was an excessive effort of 20.
On the other hand, Korea puts in an effort of 90.
While lacking 10, they try to compensate through AS or feedback.
In fact, they have been continually improving their products through such trial and error.
“At least Korean products are of better quality than those made in China or other countries.”
“Instead, they lose in price competitiveness. This time, the MP3 player is expensive too.”
“So, there are people among the younger generation who buy it to flaunt it. Unlike before, the middle class in Korea isn’t holding back on spending. They have increased too.”
“Wow, I didn’t come out to have a debate with you…”
“If it’s a discussion for progression, it must be done. No, senior, you should emphasize this more to the higher-ups in the company. If we just stand by and watch, the new era’s standard for music playback devices will surely shift from Japan to Korea.”
It felt like a rerun, but Honda was advising with a love for Japan.
However, Sasaki was a stubborn senior.
He either changed the subject or kept repeating that it couldn’t be.
Honda finally felt it.
‘He was one of the more reasonable ones…’
So, did Japanese electronics companies, and further, the once-dominant global conglomerates, only have such ‘old-fashioned’ people?
If so, the warnings he had been giving could become reality.
In information technology, electronics, and semiconductors, Japan might eventually be overtaken by Korea.
