Remove Cost Remove Energy Remove Fixed Costs Remove Operations
article thumbnail

Is Rooftop Solar Finally Good Enough to Disrupt the Grid?

Harvard Business Review

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
article thumbnail

Joint Ventures Reduce the Risk of Major Capital Investments

Harvard Business Review

For instance, the cost of building and equipping a leading-edge semiconductor fab has climbed to $7 billion, as the technology required to make more advanced chips is getting more complex. Driven by economies of scale, container ship size has been increasing for decades, with the largest ships now costing roughly $200 million.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

How to Know If a Spin-Off Will Succeed

Harvard Business Review

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.

article thumbnail

How Drucker Thought About Complexity

Harvard Business Review

Almost 80 years ago, Ronald Coase won the Nobel Prize in Economics for an essay that suggested that we do this for the sake of scalable efficiency — it costs less to coordinate activity within a firm than across independent entities. The cost and difficulty of coordinating activities across entities, on a global scale, is far lower now.

Drucker 10
article thumbnail

Get a Better Return on Your Business Intelligence

Harvard Business Review

Just like the pilot makes a calm assessment and operates the right levers, leaders need to create a climate and culture where people can make a calm assessment and fine-tune the right set of drivers. Further, sales variation can get widened much more when it comes to financial variation because of fixed costs.