AIHR

JUNE 1, 2021

– Revenue, profit, market share. – Variable or fixed cost. – Direct or indirect cost. – Cost per unit. – Employee cost or FTE. Intangible outcomes. – Production or uptime. – Number of sent invoices. – Number of new customers or leads. – Retention.

ROI 52

ROI Implementation Retention Employee Engagement 52

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

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

JUNE 22, 2015

.” The other forms of ROI often require a more complex understanding of financial concepts such as the firm’s cost of capital or the time value of money. The BEQ will be present on both sides of this equation because the number of units sold affects both the revenue the firm earns as well as the costs it must incur to earn it.

Variable Costs 15

Variable Costs Fixed Costs Advertising ROI 15

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? That’s the breakeven point.

Variable Costs 10

Variable Costs Fixed Costs Sales Sales 10

Harvard Business Review

NOVEMBER 12, 2012

Revenue-sharing. This will align their interests with the company's revenue and profit goals and will serve as an inherent incentive to stay with the company as it grows. Tie a part of your employees' wages to the company's performance.

Fixed Costs 14

Fixed Costs Workflows Revenue Compensation 14

Harvard Business Review

APRIL 19, 2011

Meanwhile, declines in revenue and escalating fixed costs for things like public employee pensions and health care are crippling our cities budgets. According to the National League of Cities , city financial officers have recently experienced the largest spending cuts and losses of revenue in a quarter century.

Government 14

Government Revenue Fixed Costs Software 14

Harvard Business Review

AUGUST 12, 2015

The software prevents websites from generating ad revenue, which is often their main source of income. Placing ads next to content helps websites recover the sizeable fixed costs of creating content. publishers lose more than 9% of ad revenue due to ad blocking. According to one report , U.S.

Advertising 12

Advertising User Experience Revenue Fixed Costs 12

Harvard Business Review

DECEMBER 10, 2012

New businesses either have strong openings, such as new restaurants, which then trail off as the next hot spot grabs the limelight, or slow starts, when, hopefully, word spreads and revenues build. Regardless, a financing component adds another fixed cost.

Assets 15

Assets Fixed Costs Revenue Benefits 15

Harvard Business Review

MAY 2, 2013

The key components that lead to a solution are as follows: Understand the dynamics of a high fixed cost/low variable cost industry. While pharma companies spend billions on research, the actual cost of manufacturing a treatment (such as a pill) is minimal. This cost structure enables pricing flexibility.

Variable Costs 10

Variable Costs Fixed Costs Cash Flow Revenue 10

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

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

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

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

JUNE 4, 2015

Since theme parks are high fixed cost/low variable cost entities, revenue from discount-enticed new customers is virtually all profit… free money. By offering deeper discounts on off-peak days, customers who otherwise would not have enjoyed Disneyland could now do so. This would result in growth.

Variable Costs 12

Variable Costs Fixed Costs Implementation Travel 12

Harvard Business Review

NOVEMBER 15, 2018

This was because their expenses grew faster than their revenues, despite cost-cutting initiatives. Cost reduction requires an honest and thorough reassessment of everything the health system does and ultimately, a change in the organization’s operating culture. A recent Navigant survey found that U.S.

Hospitality 14

Hospitality Manager Nonprofit Staffing 14

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. This phenomenon has been documented in the consumer-packaged-goods , food , semiconductor-manufacturing , and other industries.

Sales 15

Sales Sales Operations Fixed Costs 15

Harvard Business Review

FEBRUARY 24, 2015

A detailed roadmap should outline how it will become autonomous in terms of revenues and/or access to central services. In parallel, it reduced its fixed costs by restructuring its industrial footprint and overhead structure; increasing sales, marketing, and R&D expenditures in targeted areas; and dramatically reducing working capital.

Assets 11

Assets Revenue Energy Fixed Costs 11

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 10

Revenue Fixed Costs Staffing Accounts 10

Harvard Business Review

JULY 12, 2018

Among pricing experts, cost-plus pricing is reviled for some legitimate reasons. For stand-alone projects in particular, cost-plus pricing discourages efficiency and cost containment. When lower costs are quoted, the company earns lower revenue and total profit. This notion can make managers falsely complacent.

Fixed Costs 12

Fixed Costs Transportation Implementation Marketing 12

Harvard Business Review

NOVEMBER 18, 2013

The advantages that hospital systems can derive from scale fall into four groups: Classic economies of scale focus on lowering the cost per unit of care delivered (e.g., Economies of scope can allow hospital systems to leverage their scale to develop new revenue streams.

Hospitality 9

Hospitality Scaling Revenue Fixed Costs 9

Harvard Business Review

DECEMBER 25, 2013

Further, sales variation can get widened much more when it comes to financial variation because of fixed costs. It is not uncommon for a 5% drop in revenue to result in a 30% drop in profitability. Along the same lines, a 5% drop in revenue can result in a 50% drop in market cap.

Fixed Costs 9

Fixed Costs Sales Sales Revenue 9

Harvard Business Review

NOVEMBER 10, 2016

AirBnB, now used by 50,000 renters each night, is considered to be directly responsible for an estimated $450 million of lost hotel revenue each year. On any given day in America, 40% of hospital beds lie empty, their enormous fixed costs weighing heavily on the system. Administrative automation. Or take medical appointments.

Hospitality 12

Hospitality Administration Transportation Fixed Costs 12

Harvard Business Review

FEBRUARY 6, 2018

The absence of fixed costs for customers attracted small and innovative web developers. Thus although AWS still accounts for a relatively small portion of Amazon’s more than $175 billion in revenue, several analysts suggest that its profitability and growth potential account for over half of Amazon’s market value.

Hospitality 15

Hospitality Operations Insurance Fixed Costs 15

Harvard Business Review

MAY 28, 2018

By 2016, the rise of smart phones seemed to have made the company less relevant: Its revenues were at almost the same level they had been a full decade earlier. Nikon, the legendary Japanese camera maker, provides a textbook study in how smart managers can work with strategic investors to transform a struggling business.

Balance Sheet 11

Balance Sheet Cash Flow Banking Fixed Costs 11

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

APRIL 6, 2016

The integrated carrier gets incremental revenues from its excess capacity. For example, Lycamobile, a big mobile VNO, focuses on expatriate communities looking for low-cost international pay-as-you-go calls in 19 countries. The model can be a win-win as long as the two companies address different customer segments.

Assets 12

Assets Operations Insurance Telecommunications 12

Harvard Business Review

OCTOBER 5, 2017

He finds that the rise in industry concentration – the share of revenue captured by the top firms in a sector – is largely explained by the adoption of IT. In a new paper , James Bessen of Boston University provides evidence of that linkage, and of its importance. But why is IT leading to winner-take-all competition?

Software 9

Software Fixed Costs Scaling 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

Harvard Business Review

MARCH 1, 2018

where risk adjustment causes the revenues an insurer receives for a patient with a particular condition to be close to the insurer’s expected cost for that patient), patients face lower drug cost-sharing regardless of upstream manufacturer prices. Problems may get worse.

Insurance 8

Insurance Marketing Administration Fixed Costs 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

Harvard Business Review

AUGUST 16, 2011

Secondly, expecting a business to be profitable quickly forces it to keep its fixed costs low. Because a business's cost structure determines which customers it finds profitable, keeping these fixed costs low preserves strategic options for the company when it is choosing which customers to target.

Fixed Costs 22

Fixed Costs Metrics Scaling Marketing 22

Chief Executive

JULY 25, 2022

And if we do that, we can’t help but grow revenues per fixed cost. And if we bring more customers to the site, then we can’t help but attract more third-party sellers. And if we do that, then we can’t help but expand the store and extend distribution. And if we do that, we can’t help but be able to lower prices on more stuff.

Balance Sheet 98

Balance Sheet Assets Engineering Operations 98

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

JUNE 24, 2013

billion before it had even $20 million in revenues) or YouTube (which was sold 19 months after its founding to Google for close to $2 billion), or other companies whose hyper-growth attracted suitors before a viable business model emerged. How will you generate enough transactions to cover the fixed costs involved in running your business?

Fixed Costs 11

Fixed Costs Revenue Marketing Scaling 11