Assets, Fixed Costs and Operations

Exclusive: Jim Collins on ‘Thriving In Chaos’

Chief Executive

JULY 25, 2022

We went back and ran an analysis on the cash-to-assets ratio of companies that did really well in these kinds of environments, even when they were small. We found that the discipline to have a very high cash-to-assets ratio showed up early in their history. And if we do that, we can’t help but grow revenues per fixed cost.

Balance Sheet

Balance Sheet Assets Engineering Operations

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

Harvard Business Review

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. Given the shift in immediate U.S.

Fixed Costs

Fixed Costs Assets Cash Flow Variable Costs

Joint Ventures Reduce the Risk of Major Capital Investments

Harvard Business Review

APRIL 6, 2016

In many industries, the capital required to build an asset of minimum efficient scale is growing. 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. Model 1: Virtual operator.

Assets

Assets Operations Insurance Telecommunications

Is Rooftop Solar Finally Good Enough to Disrupt the Grid?

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.

Energy

Energy Transportation Real Estate Software

China’s Slowdown: The First Stage of the Bullwhip Effect

Harvard Business Review

SEPTEMBER 9, 2015

The essence of the phenomenon is the fact that each stage in the supply chain plans its capital projects and operations, including inventory levels, based on its future expectations. Macroeconomic data during the 2008 financial crisis show the bullwhip effect operating on a much broader scale. For example , U.S.

Sales

Sales Sales Operations Fixed Costs

How Drucker Thought About Complexity

Harvard Business Review

JUNE 25, 2013

Evidence of this pressure is starkly captured in the return on assets (ROA) for all public companies in the US since 1965. They have systematically and significantly eroded barriers to entry and movement on a global scale. The result is relentlessly mounting performance pressure.

Fixed Costs

Fixed Costs Assets Scaling Education

What the Nonprofit Sector Needs to Reach Its Full Potential

Harvard Business Review

MAY 13, 2016

It doesn’t have one center of organization and imagination looking out at the far horizon to inspire and guide all of the component parts to get to a place together that none operating independently could ever get to on its own. Imagine eliminating all of the redundancies in fixed costs.

Nonprofit

Nonprofit Diversity Fixed Costs Operations

We Can’t Study Short-Termism Without the Right Metrics

Harvard Business Review

APRIL 5, 2017

While a laudable effort in principle, measuring a company’s tendency to make myopic operating and investing decisions is fiendishly complex. But the other indicators probably pick up legitimate differences in how companies in the sample operate, as opposed to whether they are myopic.

Metrics

Metrics Cash Flow Revenue Compensation

How to Know If a Spin-Off Will Succeed

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.

Assets

Assets Revenue Energy Fixed Costs

How Industry Giants Can Create Corporate Breakthroughs

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. When the company rides an enabling trend.

Fixed Costs

Fixed Costs Variable Costs Assets Banking

When M&A Is Not the Best Option for Hospitals

Harvard Business Review

NOVEMBER 18, 2013

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. For instance, larger scale has enabled many hospital systems to lower their per-patient operating costs significantly.

Hospitality

Hospitality Scaling Revenue Fixed Costs

Solving the Internet's Congestion Problem

Harvard Business Review

MARCH 22, 2013

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 cheap to operate and expensive to upgrade.

Fixed Costs

Fixed Costs Revenue Assets Scaling

Solving the Internet's Congestion Problem

Harvard Business Review

MARCH 22, 2013

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 cheap to operate and expensive to upgrade.

Fixed Costs

Fixed Costs Revenue Assets Scaling

21 Types of Employment: Your Hire-To-Retire Guide

AIHR

NOVEMBER 12, 2024

Examples include an external management consultant who advises companies on improving efficiency or a cybersecurity consultant who helps organizations protect their digital assets. It allows companies to optimize labor costs by scaling their workforce up or down to meet changing customer needs and maintain operational efficiency.

Insurance

Insurance Staffing Compensation Benefits

OrgDev Digest

Exclusive: Jim Collins on ‘Thriving In Chaos’

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

Trending Sources

Joint Ventures Reduce the Risk of Major Capital Investments

Is Rooftop Solar Finally Good Enough to Disrupt the Grid?

China’s Slowdown: The First Stage of the Bullwhip Effect

How Drucker Thought About Complexity

What the Nonprofit Sector Needs to Reach Its Full Potential

We Can’t Study Short-Termism Without the Right Metrics

How to Know If a Spin-Off Will Succeed

How Industry Giants Can Create Corporate Breakthroughs

When M&A Is Not the Best Option for Hospitals

Solving the Internet's Congestion Problem

Solving the Internet's Congestion Problem

21 Types of Employment: Your Hire-To-Retire Guide

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