Harvard Business Review

AUGUST 11, 2011

When stock markets gyrate and growth prospects darken, it's tempting to rein in innovation programs and hoard cash. 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

DECEMBER 21, 2011

Early in my career I was fortunate to help a large manufacturer and distributor of construction and agricultural equipment change the way it went to market in North America. Within the first year of our effort net sales increased 27 percent while fixed costs were reduced by 40 percent. Not all fixed cost reductions were people.

Offshoring 16

Offshoring Fixed Costs Outsourcing Construction 16

Harvard Business Review

JULY 22, 2011

To appreciate the truth of this claim, it's vital to understand one of Clayton Christensen's theories on marketing and product development: Jobs-to-be-done. It was in your home, had no shelf space limiting its inventory, and could beat Tower on price because of its lower fixed costs.

Christensen 19

Christensen Disruptive Innovation Price Business Model 19

Harvard Business Review

JULY 2, 2014

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. These costs are fixed because they will not change with the number of kites sold. That’s the breakeven point.

Analysis 10

Analysis Fixed Costs Price Cost 10

Harvard Business Review

AUGUST 17, 2012

Cipla, an India-based producer of low cost antiretroviral drugs (ARVs) is one of the biggest success stories in the pharma industry. It has doubled its market cap in the five years and sales reached almost $1.5 and other traditionally developed markets. and other traditionally developed markets.

Company 13

Company Pharmaceuticals Business Model Fixed Costs 13

Harvard Business Review

MARCH 16, 2017

But how does the presence of climate skeptics affect the market for climate-related innovation? A drug company must incur a large fixed cost to do the basic research, so it has strong incentives to predict what the demand for the drug will be if its research succeeds. and in developing nations.

Entrepreneur 12

Entrepreneur Aggregate Demand Incentives Real Estate 12

Harvard Business Review

OCTOBER 6, 2014

UK retail, like the rest of the developed world, is witnessing a few big long-term trends. In the last three years, these two companies have rapidly gained share and now account for more than 8% of the market, while Tesco has lost more than 2% share, down to 28%. and spends it in international markets. billion to $8.6

Retail 15

Retail Merchandising Discount Price 15

Harvard Business Review

FEBRUARY 6, 2018

Consider its decision to pursue the market for pharmaceutical distribution, or the recent announcement that it will be teaming up with Berkshire Hathaway and JP Morgan Chase to create joint solutions for reducing the health care spending of more than 1 million employees and their families. .” Data analytics.

Health Care 14

Health Care Retail Operations Insurance 14

Harvard Business Review

SEPTEMBER 4, 2013

For example, a decade ago, it''s unlikely that small-business owners would have told you that they needed a flexible way to host data and applications, one that preferably turned the fixed cost of computer hardware into a variable cost of renting capacity. Developing a breakthrough idea will never be a paint-by-numbers exercise.

Industry 8

Industry Fixed Costs Trends Health Care 8

Harvard Business Review

DECEMBER 17, 2014

Eden McCallum, thus, manages to keep its overhead and other fixed costs at a minimum. The only thing the consultants (usually ex-McKinsey, Bain, or BCG) are responsible for is to execute these projects to the best of their abilities. And that is exactly what many consultants like doing.

McCallum 15

McCallum Competitive Advantage McKinsey Consultative 15

Harvard Business Review

MAY 28, 2018

He asked one former major investor for a reaction to the company’s prediction (accompanying poor quarterly results): “that the [current] market contraction will bottom out soon and our profits will improve.” I assumed you had some further cost reduction up your sleeve.” What he heard was uncomfortable.

Company 11

Company ROIC CFO Restructuring 11

Harvard Business Review

NOVEMBER 18, 2013

For instance, larger scale has enabled many hospital systems to lower their per-patient operating costs significantly. However, reform and other market changes are altering the scale equation for hospital systems, so some of the traditional advantages that larger scale has traditionally brought them may no longer apply.

Health Care 9

Health Care System Cost Price 9

Harvard Business Review

MAY 21, 2015

Over the past two decades, there have been many attempts to reform the electric utility market. Consider how Uber opened up the transportation market. In both cases, the two goods (car and real estate) are given value-creating potential through a process of market fragmentation and consumer empowerment.

Energy 8

Energy Transportation Software Price 8

Harvard Business Review

MAY 19, 2015

As the technology develops, GE could revamp this and other plants into general printer farms supplying all of its manufacturing divisions. That gave it a steadier cash flow to cover the costs of its large fixed cost investments, but did not eliminate the unused capacity of plants dedicated to one kind of product.

Engineering 8

Engineering Learning Curve Fixed Costs Finance 8

Harvard Business Review

DECEMBER 1, 2017

You have to consider salaries, marketing budget, office size, technology services, and on and on. These spending choices require tradeoffs, so entrepreneurs must first develop a strategy for allocating limited resources across a wide range of available options.

Strategy 9

Strategy Budgeting Cost Price 9

Harvard Business Review

MARCH 1, 2018

Consequently, if we want new medical innovations to be financially viable for the patients who need it most, health insurance markets need to be regulated to eliminate the perverse financial incentives that limit patients’ coverage. Insurance markets are failing to deliver. First, a little background. Problems may get worse.

Cost 8

Cost Insurance Incentives Policies 8

Harvard Business Review

JULY 27, 2017

And the fixed cost from “touchpoint-to-pilot” are immense. For example, in the case of a $100 million CVC fund, which can close five to 10 investments a year, these costs typically range from $1 to $2 million per startup — not including the administrative and variable costs of the pilot itself.

Venture Capitalist 8

Venture Capitalist Meyer Innovation 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. All of that is changing.

Disaggregation 8

Disaggregation Insurance Retail Fixed Costs 8

Harvard Business Review

FEBRUARY 24, 2015

The first category is exogenous factors over which the business has little control: the growth of the markets into which it sells; the competitive intensity and thus the average profitability of the industry in which it operates; or the fragmentation of its industry and thus the scope for a growth-by-acquisition approach.

Chemicals 8

Chemicals How To Kahneman Reputation 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. It reached a peak on June 12 and then proceeded to lose over 40% of its value by the end of August despite efforts by the Chinese government to prop up the market.

Supply Chain 8

Supply Chain Retail Crisis Operations 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. “Once a firm ‘invents’ good management it will then grow rapidly and dominate the market,” Bloom argues.

Document 8

Document Industry Software Fixed Costs 8

Harvard Business Review

APRIL 6, 2016

A company sets up a joint venture with a partner that has complementary assets and capabilities, in order to limit up-front investments, speed up market entry, and reduce risk. Taiwan, and South Korea, respectively — agreed to fund a novel technology development program at ASML, a leading equipment manufacturer based in the Netherlands.

Co-Opetition 8

Co-Opetition Operations Cost Technology 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

The Horizons Tracker

MARCH 23, 2023

.” The Matthew Effect Indeed, far from technology being found to disrupt incumbent operators, the data suggests that investments in digital technology are largely ensuring that dominant incumbents can entrench their strong market position and fight off any upstarts. They also ponder whether it’s a trend that is likely to continue.

Creativity 123

Creativity Innovation Trends Information Technology 123

Harvard Business Review

FEBRUARY 22, 2011

As each of these companies expands its fixed-cost infrastructure, profits grow geometrically because the additional variable cost of adding each new user is near zero. Adding a profile on Facebook has little to no impact on Facebook's operating costs. Greater scale bestows greater competitive advantage.

CPA 16

CPA CPM Advertising Disintermediation 16

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

Political campaigns are marketing campaigns, messages aimed at selling a product. Two developments bear noting. Yet by 2004 its market share was down to 3%. It focused its efforts on earning a majority share of Europe’s digital classified advertising market (a product that connects buyers and sellers).

Media 15

Media Advertising Fixed Costs Content 15