First Friday Book Synopsis

NOVEMBER 25, 2013

Bob''s blog entries De Beers Ford Motor Company Harvard Business Review Press How and why downstream [comma] customer-led activities and preferences will dominate the competitive landscape in the future Infosys Niraj Dawar the locus of activities that add value (those the customer is willing to pay for) the locus of competitive advantage the primary fixed costs in the business Tilt: Shifting Your Strategy from Products to Customers Toyota Motor Company Walmart

Review 73

Review Fixed Costs Competitive Advantage Books 73

Women on Business

FEBRUARY 1, 2011

Corporate budgeting used to be simple: review fixed costs once a year, control variable expenses as much as possible, calculate the ROI on capital expenditures and relax until the end of the fiscal year. The goal was clear and easily quantified (though not so easily achieved): maximize profit. Smart organizations are adding three elements to

Budgeting 148

Budgeting ROI Fixed Costs Review 148

Leading Blog

JUNE 22, 2020

Grow while keeping fixed costs constant. This means eradicating the quick fixes that “keep people stubbornly focused on today at tomorrow’s expense.”. W HEN David Cote became CEO of Honeywell in February of 2002, the company was a train wreck. He inherited unhealthy accounting practices, unresolved environmental liabilities, and a board and staff that were denying reality. Cote shares in Winning Now, Winning Later , a practical example of playing the infinite game.

Short-term 227

Short-term Long-term Fixed Costs Efficiency 227

Harvard Business

OCTOBER 13, 2017

Many leaders look at profit margin, which measures the total amount by which revenue from sales exceeds costs. Knight warns that it’s “a term that can be interpreted and used in many ways,” but the standard definition is this: When you make a product or deliver a service and deduct the variable cost of delivering that product, the leftover revenue is the contribution margin. You might think of this as the portion of sales that helps to offset fixed costs.

Fixed Costs 45

Fixed Costs Cost Productivity Products 45

Strategy Driven

MAY 17, 2019

Contractors need to devise ways to cut costs in order to remain profitable. With increased competition, the need to cut costs has become important now more than ever. Eliminating people is not the right way to cut costs. Instead, you should look for other ways to cut costs and boost profitability. Cost Audit. The first step in cutting costs should begin with a complete audit of the existing expenses. Actual material costs.

Cost 62

Cost Hammer Strategy Fixed Costs 62

Strategy Driven

NOVEMBER 28, 2018

From rising living costs to increased healthcare requirements, going into the future without planning on how you are going to afford it is a mistake. 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. The best way to reduce costs is to minimize your life.

Strategy 59

Strategy Budgeting Real Estate Fixed Costs 59

Strategy Driven

MARCH 31, 2020

This is a time to share the challenges regarding fixed costs, debt, obligations and the cost of doing business. In the last half-century, the pace of change and the many innovations that have reorganized our behavior in no way compare with the unanticipated situation we now face from the coronavirus pandemic. We simply have no precedent for how to plan for what may come next, or for managing the pace of the upheaval.

Crisis 58

Crisis Fixed Costs Social Capital Uncertainty 58

Strategy Driven

NOVEMBER 28, 2019

Lowering costs is one of these and whilst negotiating with suppliers , understand that you probably hold the upper hand. The same rules apply to employees, as both of these elements are fixed costs that are going to heap pressure onto your business. At one point in our life, we’ve probably all been there. The economy is like a rollercoaster , and from time to time you do reach new lows. Quite often, these lows give some people a new lease of life.

Tips 54

Tips Fixed Costs Marketing Price 54

Harvard Business

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. Alistair Berg/Getty Images.

Restructuring 28

Restructuring Fixed Costs Outsourcing Consensus 28

Harvard Business Review

JULY 2, 2014

It’s a simple calculation to determine how many units must be sold at a given price to cover one’s fixed costs. Assume she must incur a fixed cost of $25,500 to produce and sell a kite. These costs might cover the software needed to design the kite and be sure it is sufficiently aerodynamic, the fee paid to a graphic designer to design the look and feel of the kite, and the development of promotional materials used to advertise the kite.

Fixed Costs 13

Fixed Costs Price Cost Analysis 13

Ask Atma

MAY 5, 2012

As this float collapses, what used to take longer to figure out, costing a great deal, can now be determined faster and much cheaper. 4) Costs – what is your cost per sale/customer? Pro-rated fixed costs. Variable costs. What are your economies of scale (how much less will produce more of your product cost). Management 3.0 – a psychological shift. You have a great business idea but you are not sure how to develop it.

Business Model 75

Business Model Ries Agility Attrition 75

CO2

JANUARY 2, 2011

It is useful to distinction between three motivations for creating partnerships: Optimization and economy of scale, Reduction of risk and uncertainty, Acquisition of particular resources and activities) Cost Structure – The business model elements result in the cost structure. (It 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 114

Business Model Executive Coaching Execution Blog 114

Harvard Business Review

JULY 2, 2014

It’s a simple calculation to determine how many units must be sold at a given price to cover one’s fixed costs. Assume she must incur a fixed cost of $25,500 to produce and sell a kite. These costs might cover the software needed to design the kite and be sure it is sufficiently aerodynamic, the fee paid to a graphic designer to design the look and feel of the kite, and the development of promotional materials used to advertise the kite.

Fixed Costs 8

Fixed Costs Price Cost Analysis 8

Harvard Business

DECEMBER 1, 2017

Colin was sure his revenues would exceed costs within a year, but the large clients he expected never materialized. 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. The costs soon proved much greater than expected.

Hedge 40

Hedge Strategy Core Competence Fixed Costs 40

Harvard Business

MARCH 16, 2017

remains home to a considerable number of “climate skeptics,” who clearly impact the politics around the issue, as they are unlikely to support costly actions such as carbon taxes intended to mitigate the challenge of climate change. 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.

Aggregate Demand 33

Aggregate Demand Incentives Real Estate Simon 33

Harvard Business

AUGUST 31, 2018

By cutting the fixed costs of computing — avoiding the need to hire IT staff, servers, and hardware — even the smallest firm can satisfy large and unexpected computing needs. We believe its ability to provide high-powered computing without the overhead costs associated with in-house software and hardware provision has driven this. Ansgar Schwarz/EyeEm/Getty Images.

Agility 32

Agility Fixed Costs Software Survey 32

Harvard Business

OCTOBER 5, 2017

It could be because “software development typically requires large upfront fixed costs,” meaning that firms that are already pretty large are the ones who can afford to invest in it. If it’s expensive to adopt and get good at IT, it’s more economical for big companies like Wal-Mart that can spread those costs out over lots and lots of products sold.

Industry 36

Industry Document Software Fixed Costs 36

Harvard Business

MAY 28, 2018

For its part, Nikon focused on cost optimization opportunities and balance sheet management when communicating to value-oriented investors and on long-term structural changes when communicating to growth-oriented investors. 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. Heini Wehrle/BIA/Minden Pictures/Getty Images.

ROIC 32

ROIC ROE CFO Restructuring 32

Harvard Business

JULY 12, 2018

Cost-plus pricing is a lot like the romance novel genre, in that it’s widely ridiculed yet tremendously popular. Almost every manager I know will claim they hate pricing based only on costs. Yet cost-plus pricing remains the most widespread pricing method, used to price everything from a bottle of beer in a bar to multibillion-dollar infrastructure projects. The idea behind cost-plus pricing is straightforward. Cost-Plus Pricing Has Justifiable Drawbacks.

Price 30

Price Cost Tactics Retail 30

Strategy Driven

OCTOBER 24, 2019

In house logistics are not only ineffective to do on large scale and over long distance but also cost a small fortune. Your startup business may not be ready for the ballooning costs of establishing a full scale ecommerce with deliveries. Not to mention it could cost you a fortune to replace damaged goods. We help you to transform what would otherwise be a fixed cost (warehousing) into a variable cost of doing business.

Fixed Costs 10

Fixed Costs Reputation Efficiency Fashion 10

Harvard Business

FEBRUARY 6, 2018

The introduction of Amazon Prime , which provides two-day delivery on many Amazon orders for a fixed annual fee, represented a huge shift in Amazon’s early business model. The absence of fixed costs for customers attracted small and innovative web developers. jamie jones/Getty Images. It is clear from some of its recent moves that Amazon sees the 18% of U.S. GDP dedicated to health care as fertile ground for expansion.

Health Care 42

Health Care Retail GDP Pharmaceuticals 42

Strategy Driven

JULY 31, 2019

Have columns for unit sales, unit costs, pricing, one that multiplies units times price to calculate sales, and one for sales costs. 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. Remember: Sales – cost of sales = gross margin. A great business plan is the foundation of every great business.

Finance 10

Finance Fixed Costs Cost Project 10

Harvard Business

NOVEMBER 15, 2018

This was because their expenses grew faster than their revenues, despite cost-cutting initiatives. Cost reduction requires an honest and thorough reassessment of everything the health system does and ultimately, a change in the organization’s operating culture. Barnacle removal is a key element of serious cost control. This has been an area of explosive cost growth in the past 15 years as the number of physicians employed by hospitals has nearly doubled.

Franchising 34

Franchising System Cost Outsourcing 34

Harvard Business

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. The winners and losers in the U.S. economy have traditionally been easy to identify. If you had a full-time job, you won.

Disaggregation 34

Disaggregation Insurance Outsourcing Retail 34

Harvard Business

JULY 27, 2017

Third, corporate VCs and accelerators are costly and complex to operate, turning them into a slow and expensive innovation tool. 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 30

Venture Capitalist Meyer CRM IPO 30

Harvard Business

MAY 13, 2016

Imagine eliminating all of the redundancies in fixed costs. The nonprofit sector has limbs. It has fingers that reach into the most neglected corners of society, forearms that lead large national chapter and affiliate organizations, legs made up of the nation’s foundations and massive individual donor base that fund it and help it to move. It has blood pumping through its veins – 10 million people doing its good works day in and day out.

NGO 32

NGO Budgeting Diversity Fixed Costs 32

Harvard Business

MARCH 1, 2018

A growing body of research says that insurers raise out-of-pocket costs in part to avoid sick enrollees. This problem is likely to get worse as personalized medicine becomes more common, more patients get to choose between competing private health plans, and employers shrink the coverage they offer employees in order to reduce their labor costs. Policy Pricing Costs Healthcare Digital Articlelaura schneider for hbr.

Insurance 30

Insurance Cost Incentives Health Care 30

Harvard Business

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. Repaying such profits to shareholders through share repurchases is better than misinvesting that cash to diversify into unrelated businesses in which management has no expertise or overinvesting in projects that may not return cost of capital.

EPS 32

EPS Metrics EBITDA Depreciation 32

Harvard Business Review

JUNE 22, 2015

Marketers often have to make the call on whether a certain marketing investment is worth the cost. “Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment,” says Avery. If the company doesn’t sell the equivalent of the BEQ as a result of the investment, then it’s losing money and it won’t recoup its costs. First, look at fixed costs.

Payback Period 12

Payback Period Price Fixed Costs Advertising 12

Harvard Business

NOVEMBER 10, 2016

Exploring cutting edge ways to lower costs and improve quality. In healthcare, the need for administrative automation is viscerally felt – and the potential for alleviating burden and draining cost from the system is significant. On any given day in America, 40% of hospital beds lie empty, their enormous fixed costs weighing heavily on the system. is at a critical juncture, with an urgent need to bend the cost curve – slowing the rate of cost increases.

Health Care 30

Health Care Hotels Transportation Document 30

Harvard Business Review

OCTOBER 29, 2015

This makes financial sense in industries with high fixed costs and low variable costs: larger sizes enable the company to charge higher prices that, even if they are just slightly larger, absorb a higher portion of fixed costs, while reducing packaging cost per volume and attracting value-minded consumers. drink costs only $1 more than the “small” 30 oz. Size is perhaps the most neglected marketing tool.

Price 9

Price Constraint Fixed Costs Cost 9

Harvard Business

APRIL 6, 2016

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. The cost of building an oil rig has increased steadily, to more than $600 million, due to raw materials and labor cost increases, growing technical challenges, steeper regulatory requirements, and speculative building.

Co-Opetition 30

Co-Opetition Telecommunications Cost Cooper 30

Harvard Business Review

AUGUST 16, 2011

ACSOI essentially measures Groupon's profits before subtracting its subscriber-acquisition costs and stock option-based compensation. 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. "Alright, you caught us.

Christensen 15

Christensen Metrics IPO Merchandising 15

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. In light of today's economic volatility and uncertainty every aspect of business is being re-examined for its value in creating and sustaining profitable growth. I've worked in human resources for over 25 years, the past six with Newell Rubbermaid, and this is not a new endeavor for me.

Offshoring 12

Offshoring Outsourcing Construction Fixed Costs 12

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. Some new products under this umbrella, like the Mr. Clean Magic Eraser, were breakthrough hits, but they probably cost a good deal to develop.

Airlines 12

Airlines Fixed Costs Hedge Travel 12

Harvard Business Review

MARCH 28, 2011

The other is the persistent feeling that supply chains represent a cost. Most companies focus on minimizing costs rather than maximizing flexibility, which would entail making large investments in supply chains. What would happen to their costs if the renminbi's value rises overnight from RMB 6.5 Companies keep costs down by building supply chains that generate economies of scale. It discovered that although costs did fall, the delivered price to customers rose.

Supply Chain 12

Supply Chain Fixed Costs Cost Price 12

Harvard Business Review

MAY 8, 2012

Skype , for example, competes with fixed-line carriers by offering free mobile Skype calls. Bharti's innovative business model converted fixed costs in capital expenditure to a variable cost based on usage of capacity. Through the outsourcing arrangements, Bharti dramatically lowered its costs while ensuring high quality for customers, since vendors had world-class competencies in their domains.

Outsourcing 12

Outsourcing Wireless Telecommunications Core Competence 12

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. These regional production centers would reduce transportation costs and currency risks, while developing closer ties to their customers. Conglomerates, at least in the United States, have a checkered history.

Learning Curve 12

Learning Curve Outsourcing Engineering Transportation 12

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. 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.

Fixed Costs 8

Fixed Costs Trends Health Care Banking 8

Harvard Business Review

MAY 2, 2013

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. 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 Pharmaceuticals Fixed Costs 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. In a recent blog post , we cited some alarming numbers: 40% of workers are planning to look for a new job within the next six months, and 69% say they're already passively looking. As employers, those figures are frightening.

Long-term 10

Long-term Fixed Costs Agility Commitment 10

Harvard Business Review

MARCH 22, 2013

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. Like any fixed-cost asset, such as the Interstate highway system in the U.S., It is congestion, like rush hour on the roads, that drives the necessary upgrades and cost of the network.

Decentralization 13

Decentralization Fixed Costs GDP Efficiency 13

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. But recent technological advances and new business models are now allowing nimble players to compete and provide consumers with cost-saving alternatives.

Transportation 11

Transportation Software Real Estate Price 11