Concepts you need to understand about the New Economy, it is not a cartel created to monopolise the markets and create anti-competition

Concepts you need to understand about the New Economy, it is not a cartel created to monopolise the markets and create anti-competition

Let me give you an example

There is a hawker centre located in town which has 5 chicken rice stalls and 2 soya bean stalls. Let’s imagine these 7 stalls are what consists in the hawker centre although it is not true in real life. Typically in the catchment area there are 10,000 customers that patronise this hawker centre every month. Let me ask you a question, how do you maximise your resources so that you are able to get the maximum ROI for your efforts?

If all 5 chicken rice stalls are open everyday what do you suppose is their incomes from 10,000 customers every month? Likewise if they are not open every day but rotate their schedule so that an average of 2-3 stalls are open daily to sufficiently cater to demand will their incomes will still be the same? Yes, you will realise that by scheduling the working days you can still get the same income by working 4 days instead of 7 days a week, in this way you can have more rest to do the things you want by non causing “destructive-competition”. Therefore you must understand your markets very well where “horizontal competition” will create more varieties which can expand the economic pie, but “vertical competition” is “destructive competition” which will shirk you incomes and cause poor ROI. The same principles applies to the only 2 soya bean stall, if the margin is only 10cents per cup of soya bean of profits and you need to sell daily 1000 cups, what is the best method to get maximum ROI? Is it splitting the margin of markets between the two stalls everyday or rotating your schedule between yourselves so you only need to work typically only 4 days of the week to get the same income? If you understand this logic you would have maximise your ROI and efforts and work the least number of days to get the same income, so you have more time to do the things you want in life. That is my logic. Entreprenuers must realised the most stupid way to make money is to cut your supplies of ingredients in this environment as customers are not stupid, you will face dwindling customers as more will go away, even if they have no choice, they will change their consumption patterns. The onus of all these lessons is not to take away market share but to teach everyone to create their own market share, using new products and services for “horizontal competition”.

– Contributed by Oogle.

Author: Gilbert Tan TS

IT expert with more than 20 years experience in Apple, Andriod and Windows PC. Interests include hardware and software, Internet and multimedia. An experienced Real Estate agent, Insurance agent, and a Futures trader.

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