Harvard Business Review

MARCH 22, 2013

However, the model separates subscriber revenue from the cost of the network. The same person can use more internet bandwidth without increasing revenue gains for 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.

Fixed Costs 17

Fixed Costs Revenue Assets Scaling 17

Harvard Business Review

AUGUST 11, 2011

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. This move builds the visibility and image of the brand, generates new sources of potential revenue, and was likely quite cheap to execute.

Fixed Costs 15

Fixed Costs Travel Revenue Assets 15

Harvard Business Review

DECEMBER 10, 2012

The second is that the asset underlying the leverage holds its value. As leverage accentuates the profit when asset values rise, it decimates return when values fall. Regardless, a financing component adds another fixed cost. However, there are two conditions necessary for financial leverage to actually become power.

Assets 15

Assets Fixed Costs Revenue Benefits 15

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 2: Asset capacity pooling.

Assets 12

Assets Operations Insurance Telecommunications 12

Harvard Business Review

FEBRUARY 24, 2015

For example, a divested business may inherit assets and capabilities that have been starved of investment by its former parent. A detailed roadmap should outline how it will become autonomous in terms of revenues and/or access to central services. Does the business have a complete, balanced, and cohesive management team?

Assets 11

Assets Revenue Energy Fixed Costs 11

Harvard Business Review

APRIL 5, 2017

McKinsey’s margin growth measure classified firms that report higher earnings growth than revenue growth as myopic. 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.

Metrics 11

Metrics Cash Flow Revenue Compensation 11

Harvard Business Review

MARCH 22, 2013

However, the model separates subscriber revenue from the cost of the network. The same person can use more internet bandwidth without increasing revenue gains for 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.

Fixed Costs 10

Fixed Costs Revenue Assets Scaling 10