article thumbnail

When Cost-Plus Pricing Is a Good Idea

Harvard Business Review

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. The Strategic and Tactical Benefits of Cost-Plus Pricing. This notion can make managers falsely complacent.

Price 9
article thumbnail

Why HR Really Does Add Value

Harvard Business Review

Adding legitimacy to this skepticism are new technologies that enable automation of routine transactions, offshoring and shared service organizations that specialize in managing many tactical elements of HR. Within the first year of our effort net sales increased 27 percent while fixed costs were reduced by 40 percent.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Why Tesco’s Strengths Are No Longer Good Enough

Harvard Business Review

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
article thumbnail

4 Types of Activist Investors and How to Spot Them

Harvard Business Review

market has witnessed a substantial rise of activist investors. is a top performing S&P 500 listed company whose two-year total return outperformed the market by over 60%. However, free cash flow per share remained impressive at both companies, and fixed cost ratios remained somewhat intact. Example: Jolly Inc.

How To 8