Find the blue ocean market from the red ocean market

What capabilities business people need to cultivate most in the AI era?
Using AI to do industrial analysis and find out blue ocean market.

Prepared speech in Evershine 2024 March Regular Monthly Meeting by Dale Chen

Dear colleagues:
Someone asked me what capabilities business people need to cultivate most in the AI era?
What do you think · .
I think the answer is the topic I set today:
find the blue ocean market from the red ocean market and be able to lead the enterprise to be transformed into the blue ocean.
There are 800,000 companies in Taiwan, of which 20% are relatively decent, about 160,000.
However, most of the companies are struggling in the Red Sea market .
They have no direction and are desperate for support.
They need trained management talents to lead them.
From ancient times to the present, management talents who can lead the transformation of enterprises are scarce , but fortunately, they are trainable.
can cultivate such abilities through the training of industrial analysis .

Do you want to have this business ability?
…….I believe it is Yes

First I want to give 4 examples of finding blue ocean markets in red ocean markets:
(1) In the laundry service industry, a company called Jieyijia has found a market for uniform delivery and laundry provided by supermarkets such as 7-11 and delivery companies such as Uber.
(2) In the language tutoring industry, the Taipei Language Institute was established in 1956. It was originally intended to train pastors and diplomats assigned to Taiwan. It has now developed into 16 countries, 8 languages, and dispatched senior executives to multinational companies,who are provided customized one-on-one language training.
(3) Life and Life is a film that records the story of the emergence of obstetricians and gynecologists during Taiwan’s liberation period, which affected the business of midwives. The heroine Mingzhu led a group of midwives to become a postnatal care center.
(4) In the accounting service industry, Evershine provides cross-border multinational one-stop professional services.

Next, we will introduce industry analysis, which is an important tool for finding blue ocean markets .
Five years ago when 55688 discovered the supermarket industry and food delivery industry, in order to maintain the company’s image, there was a need for uniforms to be delivered for laundering.
Among the three steps of laundry, washing, drying and ironing , the most difficult part was ironing, but since it was uniforms, the specifications were the same. , easy to automate, what should I do if I want to start this business?
Industry analysis must be done, including two aspects:
(1) Market research:
What are the pain points of customers in the uniform laundry delivery market?
The clothes are mixed together after being washed, and it is quite difficult to hand them over to the original owner after washing.
How many employees are there in this industry? How many days should each uniform be washed? How much does it cost per item to be washed each time?
There are 130,000 supermarkets and70,000 delivery people , about 200,000 people
Laundry once a day, 200 yuan each time, 365 days a year, about 70,000 NTD per year
The market is 14 billion NTD. if occupies 5%, washes 10,000 pieces every day, and has a turnover of about 700 million a year.
(2)Technical investigation:
Is there any RFID electronic tag that can be sewn on the underside of uniforms and is washable ?
Yes, 50 NTD per piece. Can be washed many times
Can I apply for a patent?
How many client-side RFID readers are needed ? How much does each reader cost?
How many readers are needed on the factory side and how much does each one cost?
How many cloud systems are available for 10,000 people, multiple locations, shared and integrated with RFID readers?
A washing machine and dryer that washes 10,000 items a day, an ironing machine with a land area, how many employees, etc.

Later, I saw that it was implemented. 5 years later to now , we see it is Great success.

Summary : How to find the blue ocean market?
(1) Familiar with the Red Sea market
(2) Blue ocean market analysis
(3) Technical feasibility analysis of blue ocean market

If the blue ocean market is large enough and the technology is feasible, you can consider moving forward.
We often say: comprehensive planning and rolling implementation
This is a comprehensive plan: it is a business decision
Subsequent rolling implementation belongs to operation efficiency
Peter Druck Said: 80% of corporate profits come from business decision; 20% come from operation efficiency.

Next, we will introduce industry analysis tools in the AI era.

I just mentioned the uniform laundry market.
Five years ago, when doing an industry analysis, it needed planning department people and external consultants , spent several months, and I thought it would cost a million NTD.
This is not something a startup or small company can afford.

But in the AI era? How long will it take?
Let me report to you: It only takes 2 hours and 1 day of analysis to get rough, but sufficient parameters for business judgment.
For example: the number of people in the supermarket, the number of people delivering food, the unit price of RFID that can be printed , the price of the reader, the washing machine, dryer , ironing machine that can wash 10,000 uniforms every day, the amount of investment, the area, the number of employees, etc. Numbers, got them quickly

AI makes it faster and easier to obtain the parameters required for industrial analysis.

We can propose the following 4 insights:
*Managers who are good at using AI as an industry analysis tool to find blue ocean markets will squeeze out those who cannot use AI.
*With this ability, the success rate of starting your own business will be greatly improved.
*With this ability, when family members and friends come up with business ideas, they need to do industry analysis to determine whether they support it.
*Once you have this ability, even when making investment and stock selection, you need to do industry analysis and evaluate whether the client is a blue ocean enterprise. If so, if you wait longer , you will eventually make money.
Helmer, Hamilton: Only by investing in blue ocean companies that are undergoing transformation can we obtain high multiple returns.

AI will be released in November 2022, and in July 2023, I discovered this application.
I would like to encourage Evershine colleagues that their career goal is to serve as a general manager, not just a chief financial officer.
Because it is not difficult. As long as you learn industry analysis and develop the ability to identify blue ocean markets , you will be competent.

In the AI era, learning industry analysis and being able to find blue ocean markets are the abilities that I think need to be cultivated most. Come on Evershine colleagues! come on! come on!

John Chang asking:
I understand your idea of using industrial analysis to find blue oceans, but will the industrial market data produced by AI be accurate?

Ans :
The so-called generative AI will generate data by itself.
Therefore, if you ask directly about the size of the Blue Ocean market, it is usually impossible to judge whether the data is correct or not.
It must use AI to find the parameters that produce market data.
For example: Uniform laundry market = number of employees * how often it is washed * how much it costs to wash it.
Use AI to find the approximately 210,000 employees in the four major supermarkets and the food delivery industry who are trustworthy.
Besides,It should be credible to use AI to find out how often to wash clothes and once a day.
It should be trustworthy to use AI to find out how much a wash is ,NTD 200 each time.
Once these parameters are found and calculated using these parameters, the credibility of this blue ocean market number will be quite high.
Leo Lin asked:
How do you verify that your blue ocean industry market data is credible?

Ans :
In addition to the above-mentioned market data calculated from the individual perspective of the blue ocean industry, we can also use the market and cost structure data of upstream customers and downstream customers for verification.
For example:
Uniform laundry market = What proportion of the total turnover of the supermarket accounts for operating expenses ? What proportion of operating expenses does personnel expenses account for ? What percentage of outside laundry costs account for personnel costs?
Multiplying these three ratios and then multiplying them by the total turnover of the supermarket can produce the market size.
Comparing the figures derived from the upstream and downstream industries with the figures derived from the individual perspective of the blue ocean industry can verify each other.

To give another example, take the freight forwarding industry.
From the individual perspective of the blue ocean industry:
the number and tonnage of export containers * transportation cost per ton per kilometer * average transportation kilometers = market for the freight forwarding industry.
At the same time, you can also use the figures derived from the upstream and downstream industries:
the amount of shipping export goods * the ratio of shipping costs to the amount of export goods * the proportion of freight contracting industry to shipping costs.

Henry Kao asking:
You mentioned that Evershine has been training employees how to find blue oceans. How do you train them?

Ans :
The best way to train is case study.
Case Study is Harvard University’s most famous teaching method.
Evershine currently serves 1,000+ customers, each of whom has their own strengths.
Each of these customers’ real customers and suppliers is the subject of our case studies.
In order to find out the blue ocean market, we can study the customer’s customer operation projects and why they will definitely become the customer’s top ten customers.
Secondly, with the logical structure of a company’s industrial market estimation, Evershine can find the upstream and downstream industrial relationships, as well as the parameters that make up the logic and various proportional relationships from the company’s real data.
For example:
From the freight forwarder company , we can know that of the 100 % shipping cost, the shipping company accounts for 50 %, the contracting industry accounts for 23 %, and others such as logistics and customs declaration account for 27 %. The same is true when found by AI.

David Liu asking:
Do you think companies or general managers can systematically find blue ocean markets?

Ans :​
I believe that the ability to find blue ocean markets can be cultivated, and companies can systematically find blue ocean markets.
The steps are as follows:
1. Familiar with the Red Ocean market :
Be deeply familiar with the Red Sea market , and while serving customers, deeply feel the dissatisfaction points or “pain points” of customer needs .
This is the possible blue ocean market.

2. Blue ocean market analysis:
uses industry analysis to calculate the size of the blue ocean market, which should have a logical structure composed of multiple parameters for calculating the blue ocean market.
When the trend of each parameter changes, the changing trend of the blue ocean market will be known.

3. Blue Ocean Market Technical Feasibility Analysis:
To win the blue ocean market, based on the current mature technology, whether the R&D budget, equipment budget and normal monthly operating costs after investment are affordable to meet customer pain points.
If the technology is not mature yet, keep it in mind and observe changes in technology at any time.
Once there is a technological breakthrough, you will re-evaluate whether it is feasible.

4. Forward exploration:
If the blue ocean market is large enough and the technology is feasible, you can consider exploring forward.
Moving forward is the source of creativity.
We often say: comprehensive planning and rolling implementation
This is a comprehensive plan: it is a business decision
Subsequent rolling implementation: belongs to operation efficiency
Peter Druck Said: 80% of corporate profits come from business decision; 20% come from operation efficiency.

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Dale Chen, Principal Partner CPA/Patent Attorney/MBA/DBA
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