Lessons need to be learned, the capacity of markets, to maximise demand and not to overproduce. If you know you are overproducing, and still attempts too, you will see your rewards dwindle. My beliefs is that there is a market for everyone, to maximise your profits, to cancel destructive competition, by finding new products and services, which is part of the “new economy”. Knowledge is the key, to maximise your returns.
Let me give you an example. In the MP3 war, you have Apple leading the market, followed closely by Creative. Let’s assume there are only two markets, the US and Singapore. And the local demand for Singapore is 10,000 units per month and 90,000 units for export, the US market is 100,000 units and a furthur 150,000 units for export. Production capacity for Apple is 100,000 units per month and Creative is 25,000 units. The life cycle for each product is about 9 months whereby after that, price will decrease at a rate of 20% per quarter until the lowest price of 20% whereby the product will be handed over to OEM manufacturers. Directors, manufacturers, and stragedy planners, what do you have in mind to maximise your profits? What stragedy will you use? How do you acquire business intelligence? Do you let your product be determined by market forces? What happens when you overproduce? How do you increase your branding? How do you create brand loyalty?
Let’s make this scenerio as real as possible.
If you can sell Creative MP3 in Singapore at S$500 per unit but only S$400 in the US market, and the market share in Singapore is 40/60 and in the US is 20/80 for Creative/Apple. What are your options?
And if you are able to control these factors, what will you chose?
1) Increase capacity to produce by another 15,000 units (Creative) at an investment of $100K to streamline your production lines.
2) Spent $100K at publicity campaign to increase sales in local market by 10% and US market at 8%.
3) Let’s say, all factors are under your control. How do you create branding and loyalty?
Anyone can provide me the answers? I will post them at this website. The idea is to find all the paths and options to maximise profit and create branding or loyalty. Everyone needs to harvest an intimate knowledge of whatever market you are in to maneuver against the market and competition. When I see a demand, I will race at maximum capacity, and when I see a falling market, I will pack up and reinvent.
With in depth analysis, I have provided you the questions to find out the answers, to find out the different paths you can take, to maximise profits at minimum risk, to see the entire view of the market.
And if I am even crazy, I will merge all this information, with accounting and budgeting info, seeking all the paths with the limitation of a budget, can I accurately assess my risks? Best of all, if I expand my vision, to include all the world’s market, including forex exchange, do you get dizzy all of a sudden? No, not really, everything can be segmented, with very clear objectives, goals and relationships, that is something, nobody has tried to do.
The “New Economy” is based on, preventing destructive competition. I believe there is a market for everyone, and competition is fine, but when competition start eroding profits until a loss, it is destructive competition. Everyone should help your neighbours. And if by helping you I created a friend rather than an enemy, I have created my future when I meet you headlong in direct competition, you will definitely give way to me. And if I teach you how to solve your own problems, you will be eternally greatfull, creating less an enemy rather than an ally, which will help you surged ahead. Economic schools need to reteach the young, how to read economic data and useful information, how to identify markets and determine demand and supply, and if a market is satuated to move away from it, find new markets or create new goods and services, to reinvent oneself. There is a lifespan in every good and service, and when it is no longer economically viable, it’s time to move on, to reinvent yourself, to find new markets or goods or services. Imagine, if you do not follow what I have taught you, even if you find success yourself and fell all your enemies, no one could afford to buy your goods and services when all are poor and cannot afford the riches you have created. FTAs, economic reforms, economic liberisation, and economic co-operation are all part of the “New Economy”. When you have goals, to reach a developed country’s status like the Swiss, “thoughts of wars”, the lessons of history, will have no place in the “New Economy”. If any country tries to do otherwise, sanctions will be imposed, trade restrictions, total blockade by the rest of the partners. Then poverty will be a lesson learned. The fundamentals of the “New Economy”, is that every human being is created equal, you do not need another superior race, to control another, learn how to solve your own problems, by adhering to strict principles, “you will reap what you sow”, being lazy has no place, being stupid is because you do not want to learn.
By embracing the “New Economy”, in less than a lifetime, poverty will entirely be eraticated, from the face of this earth, poverty will only be, the domains of the warlike, on those who will rather use violence and their fists, to solve a problem. The message is very clear, “If you invest in destruction, you are only going to destroy your own self, if you invest in economic reforms, you are going to save yourself from poverty.”Likewise, example “if you got an Aid’s problem, and you are not going to invest sufficient resources, do you think the problem will go away?”. Most developing countries, have a major problem, of raising healthcare costs for the elderly, the maintainance and payout of pension funds, but little do they realise, the benefits of preventive medication, they only solve problems when it is too late, too costly. The promotion of a healthy lifestyle, the investment to promote health, and making sure your citizens are economically viable, even having enough resources, by planning for old age, is saving you future money, rather than being a drain to your coffers. There are jobs for everyone, even in old age, it’s just that productivity is not as high, and if you have invested in improving your knowledge when young, you will be a valuable tool, its just the access to old age funds will help you continue, a more comfortable productivity, a more comfortable lifestyle. Fact is, you don’t need to wipe tables in a foodcourt or collect cans and garbage if you plan for it, invest in knowledge and health, have sufficient savings to maintain a proper job and lifestyle. In the future, I see a developed Financial market that will utilise risk-based components to built a wide range of financial products, where the contribution of CPF ordinary can be use with co-insurance, to add on to the retirement fund, to ensure a more higher returns, to lock up savings for retirement. The Medisave can also be utilised, to buy other products, to minimise risk upon sickness, for outpatient care, or with other products to reinsure the cash component. A lot will depends on financial institutions, the pooling of resources, the reinvention of financial products with risk components, to cater to the needs of the market, and the ultimate goals of the government.
I believe once the demands are established, there will be an automatic participation both by the private and government, to solve this teething problem encountered by all the nations.