Harvard Business Review

JULY 2, 2014

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. What if we want to make an investment and increase the fixed costs?

Variable Costs 10

Variable Costs Fixed Costs Sales Sales 10

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

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

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

MAY 9, 2013

When one person with a wireless connection can be an agency, a media company, or even a manufacturer, traditional advertising organizations have to change their culture, processes, structure, talent policies, resources, and even their business and revenue models in order to embrace the power of open systems being fueled by digital connectivity.

Advertising 13

Advertising Variable Costs Media Fixed Costs 13

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

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 14

Hospitality Operations Insurance Fixed Costs 14

Harvard Business Review

MAY 8, 2012

Bharti's innovative business model converted fixed costs in capital expenditure to a variable cost based on usage of capacity. Through the outsourcing arrangements, Bharti dramatically lowered its costs while ensuring high quality for customers, since vendors had world-class competencies in their domains.

Balance Sheet 12

Balance Sheet Variable Costs Telecommunications Fixed Costs 12

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

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

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 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 1, 2017

Colin was sure his revenues would exceed costs within a year, but the large clients he expected never materialized. 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. This would have helped them avoid a cash crunch.

Revenue 9

Revenue Fixed Costs Staffing Accounts 9

Harvard Business Review

DECEMBER 25, 2013

Just like the pilot makes a calm assessment and operates the right levers, leaders need to create a climate and culture where people can make a calm assessment and fine-tune the right set of drivers. Further, sales variation can get widened much more when it comes to financial variation because of fixed costs.

Fixed Costs 9

Fixed Costs Sales Sales Revenue 9

Harvard Business Review

NOVEMBER 6, 2013

Working under a fixed-cost ceiling was, of course, difficult. We had little or no revenue-raising ability, and we had to meet a clear, challenging, and publicly reported set of quality objectives. The Parliament would vote on an expenditure limit and the NHS had to live within that limit.

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. Any of the above. Back to Vote.

Manager 52

Manager Onboarding Banking Process Improvement 52

AIHR

APRIL 20, 2023

Various models have emerged that calculates the impact of learning spend and equate it to productivity, customer satisfaction, increased sales or improvement in revenue. Next, sales is responsible for generating revenue within stores and selling products to third-party vendors that stock them.

Sales 98

Sales Sales Fixed Costs Marketing 98

Chief Executive

JULY 25, 2022

If I could pick the one thing that I would change in how executives lead companies by magically waving a wand, it would be the timeframe in which they operate—that you manage for the quarter century, not the quarter. And if we do that, we can’t help but grow revenues per fixed cost. Preserve the Core/Stimulate Progress.

Balance Sheet 98

Balance Sheet Assets Engineering Operations 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

FEBRUARY 22, 2011

As each of these companies expands its fixed-cost infrastructure, profits grow geometrically because the additional variable cost of adding each new user is near zero. Adding a profile on Facebook has little to no impact on Facebook's operating costs. Greater scale bestows greater competitive advantage.

Advertising 16

Advertising Variable Costs Scaling Media 16

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 15

Energy Transportation Real Estate Software 15

Harvard Business Review

OCTOBER 7, 2015

Sometimes it doesn’t make sense for companies operating in the same space to continually compete. operate in an extremely competitive (borderline oligopolistic) industry. In recent years, both companies exhibited compressed margins, flat revenue growth, and lagging returns. revenue composition, economic factors, etc.)

Balance Sheet 12

Balance Sheet Cash Flow Revenue Reorganization 12

AIHR

NOVEMBER 12, 2024

When to offer it: If your company has fluctuating workloads or seasonal needs or has to reduce fixed labor costs. Commission-based employment This arrangement bases a worker’s compensation primarily on the sales or revenue they generate. Salary format: Derived from revenue generated minus expenses.

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