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These businesses have powerful disruptive potential because they can provide consulting at a fraction of the cost of traditional models, largely because they do not need to carry expensive fixedcosts like recruiting, training, consultant “beach” time, and expensive realestate.
A drug company must incur a large fixedcost to do the basic research, so it has strong incentives to predict what the demand for the drug will be if its research succeeds. To reduce flood damage to realestate, we will need architectural innovations. Consider the example of a new drug for curing baldness.
Offline: Re-evaluate the mix of training spend to focus on more scalable online solutions as opposed to fixed face-to-face immersive experiences. Given more online channels being utilized, there is a great opportunity to consolidate previous realestate and training facilities.
The costly and complex operations of transporting energy have made utilities natural monopolies, while regulatory barriers and the high fixedcosts of building and maintaining regional electrical grid infrastructure have also kept much competition at bay.
When to offer it: If your company has fluctuating workloads or seasonal needs or has to reduce fixed labor costs. For instance, a realestate agent would earn a percentage of each home sale, or a salesperson would receive a commission for each product sold.
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