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

Harvard Business Review

DECEMBER 17, 2014

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. Eden McCallum, thus, manages to keep its overhead and other fixed costs at a minimum. Eden McCallum built its competitive advantage on unbundling the work of consultants.

McCallum 13

McCallum Competitive Advantage McKinsey Consultative 13

Harvard Business Review

NOVEMBER 15, 2018

This was because their expenses grew faster than their revenues, despite cost-cutting initiatives. As I speak with industry executives, a common refrain is “I’ve done all the easy stuff.” A recent Navigant survey found that U.S. ” Clearly, more is needed. cancel or rebid them).

Cost 10

Cost System Management Franchising 10

Harvard Business Review

MAY 28, 2018

The plan involved reforming Nikon’s struggling semiconductor lithography and imaging productsunits, both potentially high-value-added businesses, by cutting fixed costs, reducing SKUs and focusing on high-value-added product lines. It also called for streamlining headquarters and cutting executive management’s compensation.

Company 8

Company ROIC CFO Restructuring 8

Harvard Business Review

JULY 27, 2017

Talented founders know that corporations simply cannot replicate the deep experience private VCs have in starting companies, nor their expertise in assisting startups with complex challenges such as deal making, business modeling, resolving disputes among founders, executing a successful IPO, and so on.

Venture Capitalist 8

Venture Capitalist Meyer Innovation Fixed Costs 8

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. A final and significant virtue of cost-plus pricing lies in executing a cost leadership strategy.

Price 9

Price Cost Tactics Retail 9

Harvard Business Review

FEBRUARY 11, 2016

Although executives want to get the most value possible from external strategic talent, their organizations are not set up for it. A recent McKinsey global survey found that just 26 percent of surveyed executives say that key change initiatives were successful at sustainably improving the organization. Failure to deliver results.

Agility 8

Agility Organization Resources Fixed Costs 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 8

Strategy Budgeting Cost Price 8

Harvard Business Review

NOVEMBER 18, 2013

Many hospitals system executives underestimate the cost of both pursuing an acquisition and managing the post-merger integration.). The advantages that hospital systems can derive from scale fall into four groups: Classic economies of scale focus on lowering the cost per unit of care delivered (e.g.,

Health Care 8

Health Care System Cost Price 8

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

OCTOBER 6, 2014

The “ accelerated recognition of commercial income and delayed accrual of costs” undoubtedly flatters short-term results, but it soon catches up with you, as four suspended senior executives have found out. Successful companies are notoriously prone to pursuing tactical fixes rather than confronting strategic problems.

Retail 11

Retail Merchandising Discount Price 11

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. Compensation structure.

EPS 8

EPS Metrics Depreciation Short-term 8

Harvard Business Review

NOVEMBER 10, 2016

At athenahealth, for example, we have a rules engine with 40 million billing rules (yes, there are that many ways to be denied) that enables us to execute our clients’ work more efficiently than they ever could alone. On any given day in America, 40% of hospital beds lie empty, their enormous fixed costs weighing heavily on the system.

Health Care 9

Health Care Power Hotels Transportation 9

Harvard Business Review

NOVEMBER 29, 2013

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.

Health Care 8

Health Care Committee Cost Operations 8

Ask Atma

MAY 5, 2012

From this, a detailed plan for execution filled with scope and projections would rise up out of the business ether like Mount Olympus. 4) Costs – what is your cost per sale/customer? Pro-rated fixed costs. Variable costs. Turnover (i.e. revenue) generated by segments of the customer population.

Business Model 93

Business Model Ries Agility Entrepreneur 93

Harvard Business Review

AUGUST 11, 2011

However many big projects become inflexible, travelling on rails to a fixed destination. Management has made promises to senior executives about what a project will achieve, and fixed costs have built up because they looked prudent in comparison to planned revenues.

Innovation 15

Innovation Fixed Costs Airlines Business Model 15

Harvard Business Review

MAY 19, 2015

That gave it a steadier cash flow to cover the costs of its large fixed cost investments, but did not eliminate the unused capacity of plants dedicated to one kind of product. Conglomerate executives actually prefer to avoid close ties among divisions, so they can easily sell off any division at a profit.

Engineering 8

Engineering Learning Curve Fixed Costs Competitive Advantage 8

Harvard Business Review

DECEMBER 10, 2012

One example was Orion Pictures , a small studio created by well-regarded, disgruntled United Artists executives in the late 1970s. Regardless, a financing component adds another fixed cost. The key to borrowing effectively is to have a keen understanding of what might go wrong.

Financial Leverage 14

Financial Leverage Film Finance Class 14

Harvard Business Review

FEBRUARY 6, 2018

These systems can tell an executive precisely how much time each of the hospital’s operating rooms or inpatient beds are occupied with patients, or it can inform a provider who is running behind schedule and exactly how long the next patient has been waiting to be seen.

Health Care 10

Health Care Retail Operations Insurance 10

Harvard Business Review

OCTOBER 7, 2015

Thus, it is critical for senior executives to be prepared for these investors. Understanding these approaches will help curb the uncertainty that executives face when an activist investor approaches. However, free cash flow per share remained impressive at both companies, and fixed cost ratios remained somewhat intact.

How To 8

How To Due Diligence Strategy Proposal 8

Harvard Business Review

FEBRUARY 22, 2011

Our audience was composed of C-level digital executives from nearly a hundred major media brands. 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. Greater scale bestows greater competitive advantage.

CPA 15

CPA CPM Advertising Disintermediation 15

Harvard Business Review

SEPTEMBER 18, 2013

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.

McCallum 9

McCallum Consultative Disruptive Innovation Real Estate 9

Harvard Business Review

JANUARY 5, 2017

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. But if he does, ratings — and revenue — double.

Media 11

Media Advertising Fixed Costs Content 11