Harvard Business Review

DECEMBER 21, 2011

Early in my career I was fortunate to help a large manufacturer and distributor of construction and agricultural equipment change the way it went to market in North America. 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 Outsourcing Construction 15

Harvard Business Review

AUGUST 17, 2012

It has doubled its market cap in the five years and sales reached almost $1.5 What's more, these are markets that traditional developed market firms are increasingly targeting for their own growth goals. and other traditionally developed markets. and other traditionally developed markets.

Company 12

Company Pharmaceuticals Business Model Fixed Costs 12

Strategy Driven

JULY 31, 2019

Your marketing plan and SWOT analysis are interesting – but they don’t mean a thing if you don’t have realistic figures on your bottom line. This allows you to demonstrate gross margin: sales revenue less sales costs. Your financial forecasts and statements make up the most essential section of your plan.

Finance 10

Finance Planning Development SWOT 10

Harvard Business Review

MAY 28, 2018

He asked one former major investor for a reaction to the company’s prediction (accompanying poor quarterly results): “that the [current] market contraction will bottom out soon and our profits will improve.” I assumed you had some further cost reduction up your sleeve.” What he heard was uncomfortable.

Company 8

Company ROIC CFO Restructuring 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. If the major competitors in a market use cost-plus pricing, it stabilizes price levels.

Price 9

Price Cost Tactics Retail 9

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? Entrepreneurship Strategy'

Venture Capitalist 8

Venture Capitalist Supply Chain Long-term Christensen 8

Harvard Business Review

JUNE 4, 2015

Implementing demand-based pricing strategies at Disneyland, or any theme park for that matter, simply makes sense. Since theme parks are high fixed cost/low variable cost entities, revenue from discount-enticed new customers is virtually all profit… free money. This would result in growth. I think so.

Price 8

Price Course Discount Fixed Costs 8

Harvard Business Review

OCTOBER 13, 2015

To assess what we already know we can save in our system and where policymakers, entrepreneurs, investors, and health care leaders need to focus their attention, we categorized the interventions measured by experts into the different strategies put forth by various presidential candidates and analyzed their total potential savings.

Health Care 8

Health Care Insurance Price Cost 8

Harvard Business Review

OCTOBER 6, 2014

Successful companies are notoriously prone to pursuing tactical fixes rather than confronting strategic problems. They exhort their people to try harder, introduce overhead cost reduction programs, and reorganize – anything rather than admit that their strategy needs an overhaul. and spends it in international markets.

Retail 11

Retail Merchandising Discount Price 11

Harvard Business Review

DECEMBER 17, 2014

The management consulting firm Eden McCallum, from London, does strategy work much like McKinsey, the Boston Consulting Group, and Bain – but with one important exception: none of its roughly 500 consultants are on the payroll. Eden McCallum, thus, manages to keep its overhead and other fixed costs at a minimum.

McCallum 13

McCallum Competitive Advantage McKinsey Consultative 13

Harvard Business Review

FEBRUARY 24, 2015

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.

Chemicals 8

Chemicals How To Kahneman Reputation 8

Harvard Business Review

SEPTEMBER 9, 2015

During an economic crisis, the exaggerated decline in orders can be especially damaging to upstream suppliers that have high fixed costs tied to production assets. It reached a peak on June 12 and then proceeded to lose over 40% of its value by the end of August despite efforts by the Chinese government to prop up the market.

Supply Chain 8

Supply Chain Retail Crisis Operations 8

Harvard Business Review

NOVEMBER 18, 2013

For instance, larger scale has enabled many hospital systems to lower their per-patient operating costs significantly. However, reform and other market changes are altering the scale equation for hospital systems, so some of the traditional advantages that larger scale has traditionally brought them may no longer apply.

Health Care 8

Health Care System Cost Price 8

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. What if concentrated market power of a few companies in an industry has made these companies more profitable than usual? Are all share repurchases myopic?

EPS 8

EPS Metrics Depreciation Short-term 8

Harvard Business Review

APRIL 6, 2016

A company sets up a joint venture with a partner that has complementary assets and capabilities, in order to limit up-front investments, speed up market entry, and reduce risk. The question is what investment strategy a given company should follow: don’t invest, invest alone, or coinvest?

Co-Opetition 8

Co-Opetition Operations Cost Technology 8

Harvard Business Review

DECEMBER 25, 2013

Similarly, business intelligence must be viewed against the backdrop of a clear vision, goals, and strategy, and used as a means to getting there, rather than viewed in isolation or as a technology initiative. Further, sales variation can get widened much more when it comes to financial variation because of fixed costs.

Business Intelligence 8

Business Intelligence Information Technology Uncertainty Fixed Costs 8

Strategy Driven

NOVEMBER 28, 2019

It’s something that can make or break your business in these tough times, and this infographic perhaps describes it in the best detail: No, you shouldn’t be targeting those locations which are faring the best during these tough times, but you need to be shrewd about how your potential market is going to react.

Tips 65

Tips Fixed Costs Marketing Cost 65

Ask Atma

MAY 5, 2012

model, startups will have more success if they adopt lean and agile business development principles, where failing fast is the premium strategy and the lean business model reigns supreme. What about doing market research?” process, some market research can still be done during the idea development stage. In my management 3.0

Business Model 93

Business Model Ries Agility Entrepreneur 93

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. What if we want to make an investment and increase the fixed costs? That’s the breakeven point.

Analysis 15

Analysis Fixed Costs Price Cost 15

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

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. What if we want to make an investment and increase the fixed costs? That’s the breakeven point.

Analysis 8

Analysis Fixed Costs Price Cost 8

Harvard Business Review

OCTOBER 29, 2015

Size is perhaps the most neglected marketing tool. On a search of EBSCO’s Business Source Complete , I counted no less than 1,890 articles published in marketing journals in the past 10 years about price, but only 22 addressing package or service size issues. The New Tools of Marketing. Insight Center. drink at $4.75.

Fixed Costs 8

Fixed Costs Price Constraint Cost 8

Harvard Business Review

OCTOBER 7, 2015

market has witnessed a substantial rise of activist investors. And the movement is gaining acceptance as a mainstream investment strategy. Instead, activism is now more often thought of as a value-based strategy that optimizes untapped shareholder wealth. Over the last three years the U.S. Example: Jolly Inc.

How To 8

How To Due Diligence Strategy Proposal 8

Harvard Business Review

JULY 20, 2011

There is a third element that was missing entirely at GM: strategy. A succession of CEOs prior to Rick Wagoner (who fought heroically to overcome the dreadful hand he was dealt) allowed all manner of legacy costs to build up (retiree health, Jobs Bank, etc.) market: small and mid-car. — as it did — than if it grew.

Company 12

Company Franchising Fixed Costs Banking 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.

Engineering 8

Engineering Learning Curve Fixed Costs Competitive Advantage 8

Harvard Business Review

MARCH 21, 2013

The economic theory is that when different markets have different price sensitivities, producers must adjust their prices to optimize profits. for an energy bar at the airport, which would have cost about $2.00 That's because price discrimination only works when markets can be kept separate. For example, I just paid $3.00

Price 16

Price Open-book Retail Content 16

Harvard Business Review

FEBRUARY 22, 2011

A virtuous cycle is baked into their strategy: use these resources to achieve scale in ways that help achieve even more scale. 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.

CPA 15

CPA CPM Advertising Disintermediation 15

Harvard Business Review

MARCH 21, 2013

The economic theory is that when different markets have different price sensitivities, producers must adjust their prices to optimize profits. for an energy bar at the airport, which would have cost about $2.00 That's because price discrimination only works when markets can be kept separate. For example, I just paid $3.00

Price 9

Price Open-book Retail Content 9

Harvard Business Review

JANUARY 5, 2017

Political campaigns are marketing campaigns, messages aimed at selling a product. Yet by 2004 its market share was down to 3%. ” It explains why firms that have anchored their strategies to content have ceded digital leadership to those that have focused on connections. Bigger marketing budgets may not pay off.

Media 11

Media Advertising Fixed Costs Content 11