Harvard Business Review

JULY 2, 2014

Managers typically use breakeven analysis to set a price to understand the economic impact of various price- and sales-volume scenario. 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.

Variable Costs 18

Variable Costs Fixed Costs Sales Sales 18

Harvard Business Review

NOVEMBER 15, 2018

hospitals and health systems experienced an average 39% reduction in their operating margins from 2015 to 2017. This was because their expenses grew faster than their revenues, despite cost-cutting initiatives. Here are some examples of what will be required to change the operating culture: Contract rationalization.

Hospitality 14

Hospitality Manager Nonprofit Staffing 14

Harvard Business Review

OCTOBER 13, 2017

To understand more about how contribution margin works, I talked with Joe Knight, author of HBR Tools: Business Valuation and cofounder and owner of business-literacy.com , who says “it’s a common financial analysis tool that’s not very well understood by managers.” In fact, COGS includes both variable and fixed costs.

Variable Costs 15

Variable Costs Fixed Costs Revenue Sales 15

Harvard Business Review

MAY 19, 2015

Hailed in the 1960s as bastions of sophisticated management, they used cheap financing to acquire, then rationalize, many family-owned firms. Wall Street began charging a “conglomerate discount,” saying that diverse operations were hard to analyze with confidence. Conglomerates, after all, are just a management tool.

Cash Flow 15

Cash Flow Engineering Fixed Costs Sales 15

Harvard Business Review

JULY 2, 2014

Managers typically use breakeven analysis to set a price to understand the economic impact of various price- and sales-volume scenario. 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.

Variable Costs 10

Variable Costs Fixed Costs Sales Sales 10

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. We need a better solution.

Fixed Costs 17

Fixed Costs Revenue Assets Scaling 17

Harvard Business Review

MAY 8, 2012

In response, the management team made a counterintuitive move: It outsourced network installation, maintenance, and service to Ericsson, Nokia, and Siemens, and chose IBM to build and manage its IT systems. The vendors for telecom network management were paid only for the capacity utilized by Bharti Airtel, not for the equipment.

Balance Sheet 14

Balance Sheet Variable Costs Telecommunications Fixed Costs 14

Harvard Business Review

FEBRUARY 6, 2018

For existing health care companies, the operative words in that mandate have been “health care”; for Amazon, the operative words likely are “service that needs to be delivered to a customer.” The absence of fixed costs for customers attracted small and innovative web developers.

Hospitality 16

Hospitality Operations Insurance Fixed Costs 16

Harvard Business Review

APRIL 6, 2016

Driven by economies of scale, container ship size has been increasing for decades, with the largest ships now costing roughly $200 million. The latest nuclear reactor designs, promising higher safety, longer operating life, and lower operating costs, cost up to $25 billion after factoring in the huge budget overruns.

Assets 12

Assets Operations Insurance Telecommunications 12

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 15

Sales Sales Operations Fixed Costs 15

Harvard Business Review

FEBRUARY 11, 2016

Managers in these companies understand that agile, fast, and lean strategies require that they think in new ways about accessing and leveraging key strategic talent and filling critical gaps in strategic capabilities. ” Most managers would never dream of treating externals like internals. Internal-external competition.

Administration 14

Administration Fixed Costs Benefits Manager 14

Harvard Business Review

JUNE 25, 2013

As the effects began to play out in the ''70s and ''80s, Drucker wrote extensively about the need for management practices to change. The widespread erosion of ROA confirms that our management practices and institutions are struggling to respond to the relentless pressure. The Mongrel Discipline of Management , by David K.

Fixed Costs 13

Fixed Costs Assets Scaling Education 13

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 11

Metrics Cash Flow Revenue Compensation 11

Harvard Business Review

OCTOBER 6, 2014

If round after round of profit warnings was not enough – group operating profits fell 20% between 2011 and 2013 and are likely to fall another 30% in 2014 — the company recently announced it had overstated its first-half profit by about $400 million. billion in 2013, and operating profits increased 65% to $422 million. billion to $8.6

Reorganization 15

Reorganization Fixed Costs Transportation Sales 15

Harvard Business Review

MAY 9, 2013

In every part of the industry, the open innovation model is changing the economics of advertising by switching significant fixed costs to variable costs and sourcing creative from more relevant and, many times, lower cost sources. Advertising Innovation Marketing'

Advertising 14

Advertising Variable Costs Media Fixed Costs 14

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 11

Assets Revenue Energy Fixed Costs 11

Harvard Business Review

SEPTEMBER 4, 2013

But in reality most companies, particularly those that manage to last for any reasonable period of time, do day-to-day innovation extremely well. It''s not like large companies never manage to do it. Most large corporations will admit to struggling with innovation. Your television picture quality is significantly better.

Fixed Costs 8

Fixed Costs Variable Costs Assets Banking 8

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

AUGUST 31, 2018

Putting data “in the cloud” essentially means paying someone else to manage it, and then connecting to their servers via the internet to access your data when you need it. This operational agility can be particularly valuable when facing uncertain demand or a fast-evolving competitive environment.

Scaling 14

Scaling Fixed Costs Software Education 14

Harvard Business Review

DECEMBER 1, 2017

After managing a sleeve of a successful hedge fund in London for five years, and building ample savings, Colin was ready for his own shop. So not only were the current fees too weak to support his fixed costs, but future clients were turned off by his apparently excessive tastes. The first is Colin.

Revenue 11

Revenue Fixed Costs Staffing Accounts 11

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. We need a better solution.

Fixed Costs 10

Fixed Costs Revenue Assets Scaling 10

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.

Revenue 9

Revenue Nonprofit Operations Hospitality 9

Harvard Business Review

DECEMBER 25, 2013

In spite of all the storms, the changing wind conditions, turbulence, and all the volatility and uncertainty they encounter along the way, they manage to land at their intended destination. By managing six critical variables effectively. How is the pilot successful? These variables are the essential ingredients for business success: 1.

Fixed Costs 9

Fixed Costs Sales Sales Revenue 9

Harvard Business Review

JULY 27, 2017

To fill the void and build such a new BMW startup unit, Gimmy partnered with an experienced innovation manager from BMW, Matthias Meyer. Third, corporate VCs and accelerators are costly and complex to operate, turning them into a slow and expensive innovation tool. And the fixed cost from “touchpoint-to-pilot” are immense.

Fixed Costs 8

Fixed Costs Variable Costs Administration Media 8

Harvard Business Review

NOVEMBER 6, 2013

Working under a fixed-cost ceiling was, of course, difficult. The constraints we operated within also required creativity, the formation of new partnerships, and an open-minded, outward-facing search for the best, most innovative models of care.

Hospitality 8

Hospitality Insurance Fixed Costs Accounts 8

Zenefits

JULY 31, 2022

Managing inflating costs can be difficult for companies, particularly with high fixed costs like infrastructure or manufacturing. Survival in an inflating economy requires businesses to find ways to keep costs down while still meeting customer demands. Automate repetitive and time-consuming tasks. Any of the above.

Manager 52

Manager Onboarding Banking Process Improvement 52

Chief Executive

JULY 25, 2022

If you basically say, we’re going to set out and commit ourselves to achieving this march for 25 consecutive years, you manage yourself differently than if it’s just reacting to the environment. They always assume everything will go bad and manage accordingly. And if we do that, we can’t help but grow revenues per fixed cost.

Balance Sheet 98

Balance Sheet Assets Engineering Operations 98

AIHR

APRIL 20, 2023

Organizations have started to re-evaluate learning channels, vendors and the need for sizable internal learning and development teams, as a starting point to manage costs. It is therefore unsurprising that this perception of learning contributes towards managers and leaders agreeing to the cutting of learning budgets.

Sales 98

Sales Sales Fixed Costs Marketing 98

Harvard Business Review

AUGUST 16, 2011

This is the essence of Groupon's declaration last week that it will remove the controversial accounting metric called Adjusted Consolidated Segment Operating Income (ACSOI) from its financial statements. ACSOI essentially measures Groupon's profits before subtracting its subscriber-acquisition costs and stock option-based compensation.

Fixed Costs 22

Fixed Costs Metrics Scaling Marketing 22

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. That is what GM is trying to do.

Fixed Costs 14

Fixed Costs Assets Cash Flow Variable Costs 14

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. This story of disruption should feel familiar. from 2012 through 2014.

Energy 15

Energy Transportation Real Estate Software 15

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 13

Nonprofit Diversity Fixed Costs Operations 13

Harvard Business Review

OCTOBER 7, 2015

The success of an activist strategy is contingent upon placing a management team in an extremely reactive, frenzied and compromising position. Because by the time the activist has engaged senior management, they have already performed extensive due diligence on the company and have a detailed strategy they intend to pursue.

Balance Sheet 12

Balance Sheet Cash Flow Revenue Reorganization 12

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. Taxes and deductions: Fixed-term employees are subject to the same taxes and deductions as permanent/full-time employees. GET STARTED 10.

Insurance 98

Insurance Staffing Compensation Benefits 98

Harvard Business Review

JANUARY 5, 2017

Like marketers, politicians obsess over messaging (what journalists would call “content”) and a few key metrics that historically have determined success: amount of television advertising, number of “foot soldiers,” intensity of get-out-the-vote operations, and voter demographics. An advertising-based model.

Media 15

Media Advertising Fixed Costs Marketing 15