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A Refresher on Price Elasticity

Harvard Business Review

Setting the right price for your product or service is hard. In fact, determining price is one of the toughest things a marketer has to do, in large part because it has such a big impact on the company’s bottom line. One of the critical elements of pricing is understanding what economists call price elasticity.

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Why Some Digital Companies Should Delay Profitability for as Long as They Can

Harvard Business Review

When most of the great companies of the industrial era were founded, even the most brilliant economists believed deeply in the law of diminishing marginal returns. As long as there are strong increasing returns to create , it’s possible that the net present value of my profit harvesting is indefinitely larger if deferred to the future.

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Don’t Let Your Company Get Trapped by Success

Harvard Business Review

In today’s dynamic business environment, leaders of large established companies need more than ever to run and reinvent the business at the same time. Companies in the success trap over-exploit their current business models and fail to renew or grow future growth options. Our research shows that U.S. points p.a.,

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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

PE firms typically buy controlling shares of private or public firms, often funded by debt, with the hope of later taking them public or selling them to another company in order to turn a profit. But how do PE firms decide which companies to buy? We classify private equity as buyout or growth equity investments in mature companies.

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Beware of Short-term Management, Not the Short-term Investor

Harvard Business Review

Not surprisingly, some investors would seek to benefit from the combination of lower transaction costs and opportunity to make money from the fluctuations in prices. Moreover, I fail to see any argument why such short-term traders, by themselves, destroy value for the economy as a whole.

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How to Quantify Sustainability’s Impact on Your Bottom Line

Harvard Business Review

We found that sustainable and deforestation-free practices created significant financial benefits for all players in the industry’s value chain. Specifically, our analysis found that the net benefits to ranchers ranged from $18 million to $34 million (12% to 23% of revenues) in net present value projected over 10 years.

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Which MBAs Make More: Consultants or Small-Business Owners?

Harvard Business Review

We’ll also assume the cash compensation for a new CEO of a small business starts off at the average post-MBA salary, and its growth is generally tied to the performance of the company — both of which are typical from our experience as board members of these types of companies. In this example, the annual cash flow is $1.5