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Joint Ventures Reduce the Risk of Major Capital Investments

Harvard Business Review

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. This all presents CEOs with a tough dilemma. Model 1: Virtual operator. Model 2: Asset capacity pooling.

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China’s Slowdown: The First Stage of the Bullwhip Effect

Harvard Business Review

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. Ford CEO Alan Mulally tried to mitigate the impending bullwhip during the 2008 financial crisis by imploring the U.S. For example , U.S.

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Telecom's Competitive Solution: Outsourcing?

Harvard Business Review

"When the proposal to outsource technology was originally put on the table," said Sunil Mittal, CEO of Bharti Airtel , "most of our board members' jaws dropped, and they thought we had gone crazy.". Bharti's innovative business model converted fixed costs in capital expenditure to a variable cost based on usage of capacity.

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Who Rules the Web Now?

Harvard Business Review

Wired reported late last year, "The top 10 Web sites accounted for 31% of US page views in 2001, 40% in 2006, and 75% in 2010." 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. These are tech companies.

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