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.

Analysis 10

Analysis Fixed Costs Price Cost 10

Harvard Business Review

OCTOBER 6, 2014

If round after round of profit warnings was not enough – group operating profits fell 20% between 2011 and 2013 and are likely to fall another 30% in 2014 — the company recently announced it had overstated its first-half profit by about $400 million. UK retail, like the rest of the developed world, is witnessing a few big long-term trends.

Retail 15

Retail Merchandising Discount Price 15

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

NOVEMBER 18, 2013

Historically, larger scale has offered hospital systems a number of advantages, including increased referral volumes, better access to capital, stronger pricing power, and classic cost economies. For instance, larger scale has enabled many hospital systems to lower their per-patient operating costs significantly.

Health Care 9

Health Care System Cost Price 9

Harvard Business Review

APRIL 6, 2016

Driven by economies of scale, container ship size has been increasing for decades, with the largest ships now costing roughly $200 million. The latest nuclear reactor designs, promising higher safety, longer operating life, and lower operating costs, cost up to $25 billion after factoring in the huge budget overruns.

Co-Opetition 8

Co-Opetition Operations Cost Technology 8

Harvard Business Review

MAY 19, 2015

Wall Street began charging a “conglomerate discount,” saying that diverse operations were hard to analyze with confidence. True synergies across the diverse operations were often hard to see. The big question, however, is whether any of these midsized conglomerates would be able to develop a 3D printer farm on its own.

Engineering 8

Engineering Learning Curve Fixed Costs Finance 8

Harvard Business Review

SEPTEMBER 9, 2015

The essence of the phenomenon is the fact that each stage in the supply chain plans its capital projects and operations, including inventory levels, based on its future expectations. Macroeconomic data during the 2008 financial crisis show the bullwhip effect operating on a much broader scale. For example , U.S.

Supply Chain 8

Supply Chain Retail Crisis Operations 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

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. This story of disruption should feel familiar.

Energy 8

Energy Transportation Software Price 8

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. So not only were the current fees too weak to support his fixed costs, but future clients were turned off by his apparently excessive tastes.

Strategy 10

Strategy Budgeting Cost Price 10

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

JULY 27, 2017

Third, corporate VCs and accelerators are costly and complex to operate, turning them into a slow and expensive innovation tool. 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

NOVEMBER 6, 2013

Working under a fixed-cost ceiling was, of course, difficult. The constraints we operated within also required creativity, the formation of new partnerships, and an open-minded, outward-facing search for the best, most innovative models of care.

Health Care 8

Health Care Constraint Budgeting Quality 8

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. These datasets cover all of the businesses operating in the economy.

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

Like marketers, politicians obsess over messaging (what journalists would call “content”) and a few key metrics that historically have determined success: amount of television advertising, number of “foot soldiers,” intensity of get-out-the-vote operations, and voter demographics. Two developments bear noting.

Media 15

Media Advertising Fixed Costs Content 15