Opportunity Cost: Making a choice means sacrificing something else at the same time because we can’t have everything. If the value of what is given up is significant, then the choice incurs a relative loss, and it is up to the CEO to recognize this as a cost. In reality, whether I am aware of the opportunity cost or not, it still impacts my current financial situation. However, to calculate profit or loss as an opportunity cost, there must be a future opportunity to forgo the current choice and select an alternative. No one should keep repeating the cycle of giving up and choosing without knowing whether the next decision will be beneficial or not. Giving up is worthwhile only when the next option is good. - Joseph’s “just my thoughts”
Starbucks Korea sells a 355ml tall size cup of Americano at KRW 4,500. It contains 3.5% solid matter to at least manifest tastes and flavors. The rest is just WATER. We should simultaneously drink 96.5% of the water to get just a few 3.5% together. The average production cost of 1ml of tap water in Seoul is KRW 0.00051. That's the same as paying about KRW 4,000 for a cup of tap water of about 350ml. We would think of how much we make money by selling coffee, but it's our misunderstanding. As an excuse for a few solid matters of "coffee", they're selling tap water at the unbelievable price of over KRW 4,000. They're making money with the cheapest solvent 'WATER', not 'COFFEE'. But almost all businessmen are trying to sell the solid matters of 3.5% at a high price. The reason, businessmen cannot make money is they make the wrong selection which cannot make money since the beginning. The making structure is first, and the effort is second. - Josep...