Tilt: A book review by Bob Morris

First Friday Book Synopsis

Tilt: Shifting Your Strategy from Products to Customers Niraj Dawar Harvard Business Review Press (2013) How and why downstream, customer-led activities and preferences will dominate the competitive landscape in the future Niraj Dawar offers an exceptionally thoughtful and thought-provoking examination and explanation of what could be viewed – what indeed I view – as a […].

Solving the Internet's Congestion Problem

Harvard Business Review

However, the model separates subscriber revenue from the cost of the network. Congestion, rather than raw usage, is the key driver of this phenomenon; given that the Internet Service Provider network is largely a fixed-cost asset.

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.

Solving the $100,000 Cancer Drug Problem

Harvard Business Review

for instance, even insured patients pay an average of 20% of drug prices out-of-pocket, meaning these drugs can cost a patient $20,000 a year. The key components that lead to a solution are as follows: Understand the dynamics of a high fixed cost/low variable cost industry.

You Bought It. Does That Make it Yours to Sell?

Harvard Business Review

for an energy bar at the airport, which would have cost about $2.00 My willingness to pay the higher price reflects both the convenience to me of getting the bar at the last minute, as well as the fact that the retailer's costs at the airport are likely higher. But since books have low marginal cost (printing and distribution) relative to fixed costs (research, writing, and editing), Wiley can profitably sell its textbooks there at lower prices. The U.S.

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When M&A Is Not the Best Option for Hospitals

Harvard Business Review

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. Fix the Handful of U.S. Hospitals Responsible for Out–of–Control Costs.

The Get-Big-Quick Fallacy

Harvard Business Review

If you are inside a big company, profit-draining ventures are typically early sacrifices in corporate cost-cutting exercises. How will you generate enough transactions to cover the fixed costs involved in running your business?

Deliver Big Impact on a Small Budget

Harvard Business Review

We didn't want to burden the organization with fixed costs. Almost everything had to be free, and the few things we paid for had to be scalable so that the unit costs would eventually approach zero.

How Industry Giants Can Create Corporate Breakthroughs

Harvard Business Review

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. That''s not as exotic a bet as you''d imagine when you consider that just about every business owner is always looking for increased flexibility and opportunities to make fixed costs variable.

The End of Traditional Ad Agencies

Harvard Business Review

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. They''ll also need these networks in order to compete on cost: The open innovation model can shave time and expense off the old ad development cycle. Much like newspapers, conventional advertising agencies are becoming irrelevant.

Revenge of the HourlyNerds

Harvard Business Review

These businesses have powerful disruptive potential because they can provide consulting at a fraction of the cost of traditional models, largely because they do not need to carry expensive fixed costs like recruiting, training, consultant “beach” time, and expensive real estate. HourlyNerd, by encouraging students to bid against each other, likely drives down the hourly cost of projects even more.

Constraints on Health Care Budgets Can Drive Quality

Harvard Business Review

Scotland’s NHS serves 5 million people with a fixed, tax-funded budget of around $18 billion. Working under a fixed-cost ceiling was, of course, difficult. A fixed budget forces you to invest in wellness. Health Care Costs Be Cut in Half?

Get a Better Return on Your Business Intelligence

Harvard Business Review

Further, sales variation can get widened much more when it comes to financial variation because of fixed costs. There is a lot of hype and buzz around business intelligence. Companies are investing millions of dollars in business intelligence technology. However, unless this is accompanied by the simultaneous creation of a strong foundation for taking intelligent business actions, they are unlikely to reap a good return on that investment.

Tackling the “Hotspotter” Patient Challenge

Harvard Business Review

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. The concept is especially applicable to high-cost patients, sometimes referred to as “hotspotters.” High-cost patients experience high rates of turnover.

You Bought It. Does That Make it Yours to Sell?

Harvard Business Review

for an energy bar at the airport, which would have cost about $2.00 My willingness to pay the higher price reflects both the convenience to me of getting the bar at the last minute, as well as the fact that the retailer's costs at the airport are likely higher. But since books have low marginal cost (printing and distribution) relative to fixed costs (research, writing, and editing), Wiley can profitably sell its textbooks there at lower prices. The U.S.

Price 12

The Challenges GM Is Facing, and the Reasoning Behind Its Plant Closures

Harvard Business Review

For example, the Lordstown, Ohio, factory that makes the Chevy Cruze is running one shift a day, down from three a few years ago, and last year produced 180,000 vehicles, down from 248,000 in 2013. Capital-intensive factories have a high-fixed-cost, low-variable-cost operating model.

Why Tesco’s Strengths Are No Longer Good Enough

Harvard Business Review

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.

The U.S. Media’s Problems Are Much Bigger than Fake News and Filter Bubbles

Harvard Business Review

The media’s bias toward big events stems from three features of its economics: Fixed costs. The cost of covering a golf tournament doesn’t depend on whether Tiger Woods plays. Fixed costs have always been central to the economics of media. When the pseudonymous Robert Galbraith published A Cuckoo’s Calling in 2013, the novel sold about 1,500 copies in the first month. The U.S.

Aligning Your Organization with an Agile Workforce

Harvard Business Review

In 2013, Accenture suggested that 20 to 30 percent of the total workforce falls outside the organization’s traditional full-time, permanent employment relationship.

4 Types of Activist Investors and How to Spot Them

Harvard Business Review

According to Schulte, Roth & Zabel’s Activist Investing 2015 Annual Review, a total of 344 companies worldwide were subjected to activist demands in 2014, up 18% from the 291 recorded in 2013. Over the last three years the U.S.