Ajal.
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Chapter 71 - Hong Kong Strategy
🕑 Added 2025-09-22 12:03:53 +0000 UTCHis slender fingers tapped rhythmically on the desk, producing a steady, measured beat.
“Mr. Ishida, I’m well aware of the challenges you’ve outlined,” Takuya Nakayama said calmly, his voice like a soothing balm, easing Ishida’s anxious mood.
“So, I don’t plan to place all the production burden on Japan.”
Ishida blinked, puzzled, and looked at Nakayama.
“Your meaning?”
“Hong Kong,” Nakayama said clearly, enunciating each syllable.
“Hong Kong?” Ishida’s brow furrowed deeper, clearly surprised by the proposal.
“Exactly, Hong Kong.” Nakayama’s smile widened.
“Mr. Ishida, consider this: Hong Kong, as a free port, has unique trade advantages. Importing raw materials and exporting finished goods are seamless, with low tariffs.”
“More importantly, it has a vast pool of skilled, low-cost electronics assembly workers, whose wages are far below Japan’s.”
“Plus, Hong Kong factories are far more flexible in scaling production to meet order demands.”
Nakayama spoke deliberately, each word conveying his calculated reasoning.
“Shifting most of Pokémon’s production to Hong Kong’s subcontractors not only solves our capacity bottleneck but also slashes costs, boosting profit margins.”
“That’s my true strategic intent.”
Ishida’s eyes widened, astonishment evident.
He’d never imagined this young executive would propose such a bold, even unorthodox, idea.
Outsourcing a core Sega product’s production overseas?
It was unthinkable before.
Yet Nakayama’s clear logic and forward-thinking analysis forced him to consider it a viable path.
Still…
“Nakayama-san, your plan… it’s certainly compelling,” Ishida said after a pause, his tone tinged with hesitation.
“But moving production to Hong Kong involves major supply chain adjustments. That’s… not something I can decide alone.”
“And our company’s ties to production suppliers are closely linked to Directors Terauchi and Hatayama. They…”
Nakayama smiled lightly, cutting him off.
“I understand your concerns, Mr. Ishida.”
“I have no intention of disrupting Sega’s existing supply chain or disrespecting the directors.”
“So, I’d like you to convey my proposal to Directors Terauchi and Hatayama exactly as I’ve presented it.”
“Ideally, could you arrange for me to present my full plan to them in person?”
Nakayama’s tone was deferential, brimming with respect for his seniors.
Ishida, meeting Nakayama’s sincere gaze, felt his last doubts melt away.
He nodded.
“I understand, Nakayama-san. I’ll arrange it promptly.”
Following Ishida’s report, Directors Terauchi and Hatayama agreed to hear Nakayama’s pitch.
In the executive lounge, fine incense wafted, adding warmth to the air.
When Ishida, accompanying Nakayama, respectfully presented the Hong Kong outsourcing proposal to the directors, their faces showed satisfaction.
Their approval wasn’t just for the plan itself but for Nakayama’s respectful approach, working through proper channels.
After all, with President Hayao Nakayama behind him, Takuya could have pushed the plan directly.
But he didn’t.
“Takuya-kun, your idea is intriguing,” Director Terauchi said slowly, sipping tea.
He exchanged a glance with Director Hatayama.
Nakayama’s earlier successes with arcade and console games had brought substantial profits to these production-linked directors.
They trusted his business acumen.
“However,” Hatayama interjected, a trace of concern in his tone, “if we shift major orders to Hong Kong, what becomes of our domestic factories?”
“We can’t just watch them shrink, can we?”
“And will Hong Kong accept yen payments?” Terauchi added.
These were their core worries.
Nakayama, as if expecting the question, maintained his calm smile.
“I fully understand your concerns, Directors.”
“But I see this not as a crisis but as a golden opportunity.”
“Opportunity?” Both directors leaned forward, intrigued.
“Yes, opportunity,” Nakayama affirmed with a nod.
“You could acquire small Hong Kong electronics factories, enabling an indirect overseas expansion.”
“Low-margin, labor-intensive assembly can be gradually outsourced to Hong Kong, or even further to Guangdong Province.”
“This lets our Japan factories focus on high-tech core components, precision assembly, and final quality checks.”
“Not only does this preserve their role, it elevates their technical expertise and competitiveness.”
Nakayama paused, gauging their reactions, then pressed on.
“We could even transfer outdated production equipment to Hong Kong joint ventures or acquired factories, liquidating fixed assets while freeing up funds and space for Japan’s factory upgrades. With our control over tech and production, we can expand into China strategically, yet retreat with minimal loss if things go south.”
“A multi-faceted win.”
“Japan-China economic ties are growing. China’s demand for Japanese products, especially electronics, is strong, but their forex reserves are tight, and yen appreciation adds pressure.”
“By setting up in Hong Kong, or even mainland China, and paying in foreign currency, we’d gain their favor.”
“Few Japanese firms are investing in China’s electronics sector now. This is our chance to lead.”
Nakayama’s layered, lucid analysis painted a tantalizing blueprint.
The directors’ concerns faded, replaced by contemplation and subtle excitement.
They had to admit: Nakayama’s plan was more far-sighted and comprehensive than their own.
This wasn’t just about solving a product’s production—it was a supply chain evolution.
Convinced, the directors decided to send trusted aides with Nakayama and Ishida to Hong Kong for on-site assessments and to kickstart the initiative.
