Harvard Business Review

MARCH 28, 2011

Most companies focus on minimizing costs rather than maximizing flexibility, which would entail making large investments in supply chains. For instance, many companies feel they don't need to develop alternatives to Japanese suppliers because they buy so little from them nowadays. to RMB 4.5 to the US dollar? Locking up supplies.

Supply Chain 15

Supply Chain Fixed Costs Price Crisis 15

Harvard Business Review

DECEMBER 21, 2011

Adding legitimacy to this skepticism are new technologies that enable automation of routine transactions, offshoring and shared service organizations that specialize in managing many tactical elements of HR. Within the first year of our effort net sales increased 27 percent while fixed costs were reduced by 40 percent.

Offshoring 16

Offshoring Fixed Costs Outsourcing Construction 16

Harvard Business Review

AUGUST 11, 2011

However many big projects become inflexible, travelling on rails to a fixed destination. Management has made promises to senior executives about what a project will achieve, and fixed costs have built up because they looked prudent in comparison to planned revenues.

Innovation 15

Innovation Fixed Costs Airlines Business Model 15

Harvard Business Review

JULY 2, 2014

Managers typically use breakeven analysis to set a price to understand the economic impact of various price- and sales-volume scenario. It’s a simple calculation to determine how many units must be sold at a given price to cover one’s fixed costs. Assume she must incur a fixed cost of $25,500 to produce and sell a kite.

Analysis 10

Analysis Fixed Costs Price Cost 10

Harvard Business Review

DECEMBER 17, 2014

Do you work for a firm where managers think employees really have to work (what is called) “full time”? They now have 12 partners in the firm who manage customer relations and secure and define new client projects. Eden McCallum, thus, manages to keep its overhead and other fixed costs at a minimum.

McCallum 15

McCallum Competitive Advantage McKinsey Consultative 15

Harvard Business Review

MARCH 18, 2013

We didn't want to burden the organization with fixed costs. Almost everything had to be free, and the few things we paid for had to be scalable so that the unit costs would eventually approach zero. Software development" and "hardware" are bad words. This removed the biggest bottleneck to innovation — us.

Budgeting 12

Budgeting Software Entrepreneur Fixed Costs 12

Harvard Business Review

SEPTEMBER 4, 2013

But in reality most companies, particularly those that manage to last for any reasonable period of time, do day-to-day innovation extremely well. It''s not like large companies never manage to do it. But that''s exactly the job Amazon realized so many of them needed when it developed its "elastic cloud-computing solution."

Industry 8

Industry Fixed Costs Trends Health Care 8

Harvard Business Review

APRIL 19, 2011

Meanwhile, declines in revenue and escalating fixed costs for things like public employee pensions and health care are crippling our cities budgets. In public safety, better analysis of crime data can lead to better deployment of the public safety workforce, lowering crime and reducing cost.

Short-term 14

Short-term Budgeting Health Care Long-term 14

Harvard Business Review

FEBRUARY 6, 2018

To the extent that the technology Amazon developed for Amazon Go can be turned to services beyond grocery shopping, health care may be one of the early beneficiaries. These executives agreed that if such issues were challenging for Amazon, they surely must plague smaller internet companies that are in an earlier stage of their development.

Health Care 15

Health Care Retail Operations Insurance 15

Harvard Business Review

OCTOBER 6, 2014

UK retail, like the rest of the developed world, is witnessing a few big long-term trends. But Messieurs Barnes and Heini, joint managing directors of Aldi UK, have added more fresh products and up-market lines at prices 15-20% below those of regular UK supermarkets. You might wonder how anyone can make money with such low prices.

Retail 15

Retail Merchandising Discount Price 15

Harvard Business Review

MAY 28, 2018

Nikon, the legendary Japanese camera maker, provides a textbook study in how smart managers can work with strategic investors to transform a struggling business. It also called for streamlining headquarters and cutting executive management’s compensation. Heini Wehrle/BIA/Minden Pictures/Getty Images.

Company 11

Company ROIC CFO Restructuring 11

Harvard Business Review

NOVEMBER 18, 2013

Many hospitals system executives underestimate the cost of both pursuing an acquisition and managing the post-merger integration.). The advantages that hospital systems can derive from scale fall into four groups: Classic economies of scale focus on lowering the cost per unit of care delivered (e.g., Affiliation models.

Health Care 9

Health Care System Cost Price 9

Harvard Business Review

MAY 19, 2015

Hailed in the 1960s as bastions of sophisticated management, they used cheap financing to acquire, then rationalize, many family-owned firms. As the technology develops, GE could revamp this and other plants into general printer farms supplying all of its manufacturing divisions. Conglomerates, after all, are just a management tool.

Engineering 8

Engineering Learning Curve Fixed Costs Finance 8

Harvard Business Review

OCTOBER 5, 2017

It could be because “software development typically requires large upfront fixed costs,” meaning that firms that are already pretty large are the ones who can afford to invest in it. For instance, research has shown that IT is more effective when paired with good management.

Document 9

Document Industry Software Fixed Costs 9

Harvard Business Review

DECEMBER 1, 2017

These spending choices require tradeoffs, so entrepreneurs must first develop a strategy for allocating limited resources across a wide range of available options. After managing a sleeve of a successful hedge fund in London for five years, and building ample savings, Colin was ready for his own shop. The first is Colin.

Strategy 10

Strategy Budgeting Cost Price 10

Harvard Business Review

MAY 21, 2015

The costly and complex operations of transporting energy have made utilities natural monopolies, while regulatory barriers and the high fixed costs of building and maintaining regional electrical grid infrastructure have also kept much competition at bay. And SunPower, the second largest U.S. Meanwhile, utilities are not standing idle.

Energy 8

Energy Transportation Software Price 8

Harvard Business Review

JULY 27, 2017

To fill the void and build such a new BMW startup unit, Gimmy partnered with an experienced innovation manager from BMW, Matthias Meyer. And the fixed cost from “touchpoint-to-pilot” are immense. In essence, the venture client, instead of equity, buys the technology of a startup when it is still a venture to do so.

Venture Capitalist 8

Venture Capitalist Meyer Innovation Fixed Costs 8

Harvard Business Review

FEBRUARY 11, 2016

Google and Intel rely on experts in social science and biomechanics to develop transformative products by better understanding how people think about and use technology. Too often, purchasing departments manage the selection while operating managers—not involved in selection by fiat—are expected to make the relationship work.

Agility 8

Agility Organization Resources Fixed Costs 8

Harvard Business Review

OCTOBER 27, 2016

A full-time job provided the steady income needed to support our traditional version of the American Dream: the highly leveraged, high-fixed-cost house; the cars; the latest consumer goods. If you had a full-time job, you won. These skilled and entrepreneurial workers win in the gig economy by moving from good jobs to great work.

Disaggregation 8

Disaggregation Insurance Retail Fixed Costs 8

Harvard Business Review

FEBRUARY 24, 2015

Conversely, the business may be an “unpolished diamond” that was neglected by its former management for too long and whose value is just waiting to be unlocked. Does the business have a complete, balanced, and cohesive management team? Are the management team and owners prepared to abandon business as usual?

Chemicals 8

Chemicals How To Kahneman Reputation 8

Harvard Business Review

NOVEMBER 29, 2013

A fascinating business dynamic will unfold as health care providers in the United States shift from a reimbursement system that has historically paid for procedures performed to one that rewards population health — providing the total care of a community at a fixed cost and improving its members overall health.

Health Care 9

Health Care Committee Cost Operations 9

Harvard Business Review

MARCH 1, 2018

Low-income and disabled Medicaid recipients often choose from competing, private, managed-care plans. In the employer market, increasing pressures to cut labor costs, combined with the proliferation of new high-cost therapies, provide employers with little incentive to provide generous coverage for these personalized therapies.

Cost 8

Cost Insurance Incentives Policies 8

Harvard Business Review

APRIL 6, 2016

Given the two companies’ complementary shipping schedules, services, and vessels, the agreement allows them to provide greater product options to customers at substantially lower operating cost. But on the other hand, in order to safeguard the company’s future competitiveness, CEOs may have no other choice than to invest now.

Co-Opetition 8

Co-Opetition Operations Cost Technology 8

Harvard Business Review

NOVEMBER 6, 2013

Working under a fixed-cost ceiling was, of course, difficult. We used Ed Wagner’s Chronic Care Model to redesign the management of chronic conditions. Preventive, coordinated, and team-based care has proven a successful strategy for managing these high-cost, high-utilization patients. (A

Health Care 8

Health Care Constraint Budgeting Quality 8

Harvard Business Review

SEPTEMBER 9, 2015

During an economic crisis, the exaggerated decline in orders can be especially damaging to upstream suppliers that have high fixed costs tied to production assets. Companies should anticipate this trend and start developing “value pricing” and less expensive products.

Supply Chain 8

Supply Chain Retail Crisis Operations 8

Harvard Business Review

MAY 9, 2013

Harley helped V&S launch Fan Machine by enlisting its fans to develop a new campaign. In every part of the industry, the open innovation model is changing the economics of advertising by switching significant fixed costs to variable costs and sourcing creative from more relevant and, many times, lower cost sources.

Advertising 13

Advertising Brand Creativity Wireless 13

Harvard Business Review

JANUARY 5, 2017

Two developments bear noting. The media’s bias toward big events stems from three features of its economics: Fixed costs. The cost of covering a golf tournament doesn’t depend on whether Tiger Woods plays. Fixed costs have always been central to the economics of media. Where Does This Leave Us?

Media 15

Media Advertising Fixed Costs Content 15