Strategy Driven

MARCH 31, 2020

This is a time to share the challenges regarding fixed costs, debt, obligations and the cost of doing business. Even with its ups and downs, they’ve learned to depend on you. Rather than give false reassurances, it’s time for transparency and open discussion.

Crisis 66

Crisis Open-book Fixed Costs Social Capital 66

HR Digest

OCTOBER 10, 2018

Businesses should also learn to recycle waste materials to save cost and not to just dispose of them arbitrarily. Evaluation staff cost. Staffing is a major cost for any business. Beyond the high cost, it is a fixed cost as well. To determine that, staff evaluation is necessary.

How To 63

How To Budgeting Cost Fixed Costs 63

Strategy Driven

JANUARY 27, 2021

Fixed Costs / (Average Price – Variable Costs) = Break-Even Point –. Conducting a Break-Even Analysis – As a business owner, if you can determine the price of conducting a break-even analysis, then in the long run, you can anticipate how profitable your products and services will remain!

Break-even Analysis 77

Break-even Analysis Analysis Licensing Price 77

Harvard Business Review

OCTOBER 13, 2017

. “Contribution margin shows you the aggregate amount of revenue available after variable costs to cover fixed expenses and provide profit to the company,” Knight says. You might think of this as the portion of sales that helps to offset fixed costs. In fact, COGS includes both variable and fixed costs.

Fixed Costs 14

Fixed Costs How To Cost Price 14

Harvard Business Review

NOVEMBER 30, 2018

Capital-intensive factories have a high-fixed-cost, low-variable-cost operating model. If you greatly reduce the production volume, the cars that do come out have to absorb more of the fixed costs, and that eventually sends the product into a profitability death spiral.

Restructuring 11

Restructuring Fixed Costs Operations Consensus 11

CO2

JANUARY 2, 2011

(It is useful to to distinguish between two broad classes of business models Cost Structures: cost cost-driven and value-driven from the following categories Cost-driven, Value-driven.

Business Model 141

Business Model Executive Coaching Execution Blog 141

Harvard Business Review

JUNE 22, 2015

To figure total costs you first multiply the unit quantity sold by the variable costs per unit, then you add the fixed costs. Like this: Note that Price per unit – Variable costs per unit is equal to the Contribution margin per unit. The fixed costs to advertise the flip flops are $2,000.

Payback Period 8

Payback Period Fixed Costs Analysis Price 8

Harvard Business Review

AUGUST 16, 2011

Secondly, expecting a business to be profitable quickly forces it to keep its fixed costs low. Because a business's cost structure determines which customers it finds profitable, keeping these fixed costs low preserves strategic options for the company when it is choosing which customers to target.

Christensen 19

Christensen Fixed Costs Metrics Venture Funding 19

Harvard Business Review

MARCH 28, 2011

Variabilizing costs. Companies can lower their fixed costs and increase those that fluctuate with the market. Many vendors, who apportion fixed costs among different companies, charge on a per unit basis. One way of doing that is to outsource production.

Supply Chain 15

Supply Chain Fixed Costs Price Crisis 15

Strategy Driven

OCTOBER 24, 2019

We help you to transform what would otherwise be a fixed cost (warehousing) into a variable cost of doing business. The beauty of hassle-free delivery is that we make it look super easy for both the client and their customers even though it’s not. You can then use the savings to invest in better facilities for your businesses.

Fixed Costs 10

Fixed Costs Reputation Efficiency Bottom-up 10

Harvard Business Review

DECEMBER 21, 2011

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 15

Offshoring Fixed Costs Construction Outsourcing 15

Strategy Driven

JULY 31, 2019

This allows you to demonstrate gross margin: sales revenue less sales costs. Differentiate between fixed costs, such as rent and payroll, and variable costs, such as advertising and delivery. Plus it’s a useful number for comparing with different standard industry ratios. Create an expenses budget.

Finance 10

Finance Planning Development SWOT 10

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. When the company rides an enabling trend.

Industry 8

Industry Fixed Costs Trends Innovation 8

Strategy Driven

AUGUST 29, 2021

Revenue might be deceiving since it hides margins, fixed costs, payment fees, and shipping charges. Other costs, profit margins, and product margins are all factored into the equation, allowing advertising to be completely open to all stakeholders. How Does Profit Bidding Differ From Revenue?

Strategy 95

Strategy Budgeting Advertising Fixed Costs 95

Harvard Business Review

MAY 2, 2013

The key components that lead to a solution are as follows: Understand the dynamics of a high fixed cost/low variable cost industry. While pharma companies spend billions on research, the actual cost of manufacturing a treatment (such as a pill) is minimal. This cost structure enables pricing flexibility.

Discount 8

Discount Price Fixed Costs Pharmaceuticals 8

Harvard Business Review

NOVEMBER 12, 2012

By making the fixed cost of payroll inherently more variable under differing business conditions, you can make your company more resilient and agile, while also treating your employees exceptionally well. Tie a part of your employees' wages to the company's performance.

Long-term 10

Long-term Fixed Costs Commitment Agility 10

Harvard Business Review

JULY 12, 2018

A second important deficiency arises from the fallacy that a cost-plus price is guaranteed to cover costs. Cost-plus prices provide no guarantee of covering costs or earning a profit. This notion can make managers falsely complacent.

Price 9

Price Cost Tactics Retail 9

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.

McCallum 13

McCallum Competitive Advantage McKinsey Consultative 13

Harvard Business Review

MARCH 16, 2017

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. In other words, climate skeptics don’t just stymie progress on climate policy. They ensure that would-be climate entrepreneurs have less incentive to invent.

Entrepreneur 9

Entrepreneur Aggregate Demand Incentives Real Estate 9

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

MARCH 28, 2014

The theory of disruption explains why incumbent businesses – with high fixed cost infrastructures and embedded beliefs about what the market wants – fail to adopt business models that lower the cost of their services and drive product accessibility to entirely new sets of users.

Disruptive Innovation 8

Disruptive Innovation Automotive Software Fixed Costs 8

Harvard Business Review

JUNE 4, 2015

Since theme parks are high fixed cost/low variable cost entities, revenue from discount-enticed new customers is virtually all profit… free money. By offering deeper discounts on off-peak days, customers who otherwise would not have enjoyed Disneyland could now do so. This would result in growth.

Price 8

Price Course Discount Fixed Costs 8

Harvard Business Review

MAY 28, 2018

Directly influenced by investor input, Nikon developed a restructuring plan that would carry a onetime cost of ¥48 billion ($460 million) but generate ¥20 billion ($190 million) in annual savings. It also called for streamlining headquarters and cutting executive management’s compensation.

Company 8

Company CFO ROE ROIC 8

Harvard Business Review

JULY 22, 2011

It was in your home, had no shelf space limiting its inventory, and could beat Tower on price because of its lower fixed costs. As an online storefront it had a fundamental advantage. The only thing that might have kept Tower treading water at first was its ability to be compatible with Discmen, which we know now disappeared quickly.

Christensen 16

Christensen Disruptive Innovation Price Business Model 16

Harvard Business Review

JUNE 24, 2013

When through our venture investment arm we seek to evaluate the profitability prospects of a young business, we look to see whether its team can credibly answer two questions: How will you charge enough for a transaction to cover the costs related to producing and delivering a good?

Venture Capitalist 8

Venture Capitalist Supply Chain Long-term Christensen 8

Harvard Business Review

DECEMBER 1, 2017

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. To address those cost overruns, Colin subleased some space, cancelled a redundant and very expensive trading service, and let one person go.

Strategy 9

Strategy Budgeting Cost Price 9

Harvard Business Review

NOVEMBER 15, 2018

In larger facilities, there is often an astonishing proliferation of special care units, ICUs, and quasi-ICUs that are expensive to staff and have high fixed cost profiles. obstetrics, orthopedics, cardiac care) that could benefit from consolidation.

Cost 10

Cost System Management Franchising 10

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.

Disaggregation 8

Disaggregation Insurance Retail Fixed Costs 8

Harvard Business Review

AUGUST 8, 2014

So to cover his monthly fixed costs of student loan payments (on more than $100k in debt), rent, and health care he was driving for Uber. As a result he was now competing against much more experienced people for each new gig that came up, and he hadn’t had a lot of success since graduating.

Long-term 10

Long-term Fixed Costs Technology Short-term 10

Harvard Business Review

MAY 13, 2016

Imagine eliminating all of the redundancies in fixed costs. Consolidating databases and information and talent. Imagine the strength of the acumen and the voice. Imagine the sense of pride it would engender.

Budgeting 8

Budgeting NGO Diversity Fixed Costs 8

Strategy Driven

NOVEMBER 28, 2018

Your rent and other fixed costs are unavoidable, so cut them out from what you receive in income and work on minimizing your costs so you can comfortably live with your exact monthly budget and not your monthly income. By understanding where your money goes, you can work out what your actual monthly budget is.

Strategy 57

Strategy Real Estate Budgeting Fixed Costs 57

Harvard Business Review

AUGUST 17, 2012

That may be true, but then the firms that do carry out the R&D are also dominant in their developed domestic markets, where their margins can absorb the fixed costs of R&D and there's nothing to stop them from competing on a cost basis in Africa, particularly given the low production costs of most drugs.

Company 11

Company Pharmaceuticals Business Model Fixed Costs 11

Harvard Business Review

JUNE 25, 2013

The need to decentralize organizations around employees — viewing them as assets capable of expanding growth rather than as fixed costs to be eliminated — and to move away from standardized and tightly-specified process flows.

Drucker 9

Drucker Disruptive Innovation Uncertainty Globalization 9

Harvard Business Review

OCTOBER 6, 2014

Hard discounters aim for twice the volume with the same fixed costs so they can make the same returns at half the gross margin. The company plans to double the number of outlets in the UK to 1,000 by 2022, and it won’t stop there if Aldi Germany is any indication. You might wonder how anyone can make money with such low prices.

Retail 11

Retail Merchandising Discount Price 11

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.

Energy 8

Energy Transportation Software Price 8

Harvard Business Review

NOVEMBER 10, 2016

On any given day in America, 40% of hospital beds lie empty, their enormous fixed costs weighing heavily on the system. Think of the potential for this kind of orchestration of resources in healthcare where waste accounts for an estimated $750 billion annually. Or take medical appointments.

Health Care 9

Health Care Power Hotels Transportation 9

Harvard Business Review

APRIL 5, 2017

However, firms can efficiently increase margin growth without much revenue growth by managing to squeeze out their fixed costs to service the same level of output. McKinsey’s margin growth measure classified firms that report higher earnings growth than revenue growth as myopic.

EPS 8

EPS Metrics Depreciation Short-term 8