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 17

Fixed Costs Revenue Assets Scaling 17

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

JUNE 25, 2013

They have systematically and significantly eroded barriers to entry and movement on a global scale. Evidence of this pressure is starkly captured in the return on assets (ROA) for all public companies in the US since 1965. Thanks to the forces described above, we are more connected on a global scale than ever before.

Fixed Costs 13

Fixed Costs Assets Scaling Education 13

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. Macroeconomic data during the 2008 financial crisis show the bullwhip effect operating on a much broader scale. For example , U.S.

Sales 15

Sales Sales Operations Fixed Costs 15

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 10

Fixed Costs Revenue Assets Scaling 10

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 9

Hospitality Scaling Revenue Fixed Costs 9

Harvard Business Review

NOVEMBER 10, 2016

They’ve organized, scaled, and automated the myriad administrative details involved in such a way as to minimize the barrier to entry and limit the potential for error, miscommunication, or unwarranted variation. On any given day in America, 40% of hospital beds lie empty, their enormous fixed costs weighing heavily on the system.

Hospitality 12

Hospitality Administration Transportation Fixed Costs 12