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Visualizing Value

In Multidimensional Economics, Value is a sustainable product price based on its features.  Producers set Prices.  Customers determine Value.  When they don’t match, problems arise.  Buyers pay no mind to cost when considering Value.  If you paid $1000 for a laptop, you don’t care if its cost was $1900, $900, or $90.  You just know it satisfied your Value proposition.  How do markets establish Value?

Value is whatever the market says it is.  For business jets, Fig. A shows us there is a positive correlation between speed and price.  The faster the planes go, the more buyers who can are willing to pay.  Note, though; there is high variation in A near 560 MPH, reflected in the Mean Absolute Percentage Error in D.  Fliers like to be able to take people along with them; thus, it makes sense in B that buyers pay for added capacity.  No one wants to be cramped, either, so observe in C that taller cabins fetch more money than shorter ones.  As we add features B & C, we lower errors in D.

Aircraft speed, capacity, and comfort value terms are analogous to those for computers. Laptop buyers want processor speed, short- and long-term memory, and easy to read screens.

Analysts should consider all features markets find useful.

#business #value #marketanalysis #price #innovation

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Solve Profit First

Suppliers make products and see what markets will bear for them.  That’s precisely backward.

Instead, we can solve for profit potential first and discover product specifications second.

Suppose a market has products for which there are particular quantities, and prices demanded, as shown by the red dots.  We want to avoid competition, so we choose a Target Price, 1, that exploits a price gap.  Given a Demand Frontier, this sets a quantity limit, 2.

With some work (not shown), we find the market supports Features A & B with a green Value Surface (supportable prices based on those features), and that there’s an area of interest with no competition.  Linked to that region are the costs for 1 and 200 units of our new product.  If we constrain the problem (orange planes), we form an enclosure.

We then run Financial Catscans through this region.  Much like brain scans, they are virtual market section cuts.  At the optimum, we solve for the specs of Features A (3) and B (4), and the per-unit profit (5).  Per unit profit (5) times the demand limit quantity (2) yields max potential profit.

In the process, we’ve solved a 4D problem (Feature A, Feature B, Price, Quantity) from a 1D goal (profit).

#innovation #price #value #markets #profit #sales #manangement

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COVID-19 Over Time

Weeks ago, we considered the world’s countries populations on the horizontal axis and the number of their COVID-19 cases on the vertical as the points in blue, below. Several countries formed Upper COVID Infection Limit (those with white triangles inside blue circles). The regressed blue line through these points described 98.5% of their variation.

By May 22, things changed, indicated by the green dots. While the US still led the world in infections, and all states on the Limit in April remained there, some other countries reached this unenviable level (i.e., the line through the green dots with white squares, correlated to 98.4%). The case count in Bahrain more than doubled; Kuwait’s infection rate went up nearly 5.5x. Along with Qatar, with over triple the cases of a few weeks ago, these Gulf States were hard hit. This phenomenon is baffling as most countries in Africa to the west and Asia to the east are doing better.

Peru and Chile did especially poorly, dispelling the idea COVID might be hemispherically-based. Vitamin D levels are of particular interest. Low levels of it correlate to high European mortality rates (https://lnkd.in/gh2tbej)

#covid #inthistogether #innovation #health #covid19analytics