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

SEPTEMBER 18, 2013

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 fixed costs like recruiting, training, consultant “beach” time, and expensive real estate.

Real Estate 12

Real Estate Small Business Fixed Costs Recruitment 12

Harvard Business Review

AUGUST 17, 2012

That may be true, but then the firms that do carry out the R&D are also dominant in their developed domestic markets, where their margins can absorb the fixed costs of R&D and there's nothing to stop them from competing on a cost basis in Africa, particularly given the low production costs of most drugs.

Fixed Costs 14

Fixed Costs Marketing Sales Sales 14

Harvard Business Review

MARCH 18, 2013

We didn't want to burden the organization with fixed costs. Almost everything had to be free, and the few things we paid for had to be scalable so that the unit costs would eventually approach zero. Follow the Scaling Social Impact insight center on Twitter @ScalingSocial and give us feedback.

Software 12

Software Fixed Costs Scaling Implementation 12

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

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 13

Advertising Variable Costs Media Fixed Costs 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. Senate Banking Committee to save his competitors.

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

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.

Assets 12

Assets Operations Insurance Telecommunications 12

Harvard Business Review

MARCH 28, 2014

The theory of disruption explains why incumbent businesses – with high fixed cost infrastructures and embedded beliefs about what the market wants – fail to adopt business models that lower the cost of their services and drive product accessibility to entirely new sets of users.

Fixed Costs 9

Fixed Costs Software Transportation Scaling 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

Harvard Business Review

NOVEMBER 15, 2018

Yet whether economies of scale truly exist in hospital operations remains questionable. In larger facilities, there is often an astonishing proliferation of special care units, ICUs, and quasi-ICUs that are expensive to staff and have high fixed cost profiles. Roughly two-thirds of all hospitals are part of these systems.

Hospitality 14

Hospitality Manager Nonprofit Staffing 14

Harvard Business Review

OCTOBER 5, 2017

It could be because “software development typically requires large upfront fixed costs,” meaning that firms that are already pretty large are the ones who can afford to invest in it. First, they argue, intangibles often involve considerable upfront investment, then are cheaper to scale.

Software 9

Software Fixed Costs Scaling Revenue 9

Harvard Business Review

JULY 27, 2017

And the fixed cost from “touchpoint-to-pilot” are immense. For example, in the case of a $100 million CVC fund, which can close five to 10 investments a year, these costs typically range from $1 to $2 million per startup — not including the administrative and variable costs of the pilot itself.

Fixed Costs 8

Fixed Costs Variable Costs Administration Media 8

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

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

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. It’s economies of scale at Vanguard and Amazon. 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.

Balance Sheet 98

Balance Sheet Assets Engineering Operations 98

Harvard Business Review

FEBRUARY 22, 2011

A virtuous cycle is baked into their strategy: use these resources to achieve scale in ways that help achieve even more scale. Greater scale bestows greater competitive advantage. As they pursue their quest for greater scale, they are poised to bring the scale dynamics of digital businesses to offline activities.

Advertising 16

Advertising Variable Costs Scaling Media 16

Harvard Business Review

MAY 13, 2016

Imagine eliminating all of the redundancies in fixed costs. The budget for any run-of-the-mill Hollywood action movie is three times the scale of what would be required. Can all of the intelligence of the sector’s leaders not put together a deal of that scale? Consolidating databases and information and talent.

Nonprofit 13

Nonprofit Diversity Fixed Costs Operations 13

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

When through our venture investment arm we seek to evaluate the profitability prospects of a young business, we look to see whether its team can credibly answer two questions: How will you charge enough for a transaction to cover the costs related to producing and delivering a good? For a long time, Amazon.com fit in this category.

Fixed Costs 11

Fixed Costs Revenue Marketing Scaling 11

Harvard Business Review

OCTOBER 7, 2015

Activists look to see if opponents could be combined to form a more productive single entity, one that can capitalize on economies of scale and monopolize a given sector. However, free cash flow per share remained impressive at both companies, and fixed cost ratios remained somewhat intact.

Balance Sheet 12

Balance Sheet Cash Flow Revenue Reorganization 12

AIHR

NOVEMBER 12, 2024

When to offer it: When your company must quickly fill temporary positions, scale its workforce up or down, access specialized skills without committing to a full-time hire, or outsource certain functions (such as IT or HR). Cost management: You must carefully weigh the costs of different employment types.

Insurance 98

Insurance Staffing Compensation Benefits 98