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.