Harvard Business Review

OCTOBER 14, 2014

Second, because they can’t yet afford the high-margin top brands, they’re not all that attractive to incumbents worried about generating enough cash to cover their high fixed and variable costs. Others point out the strong similarities between Xiaomi’s operating system (named MIUI) and Apple’s iOS.

Variable Costs 15

Variable Costs Sales Sales Marketing 15

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 14

Balance Sheet Variable Costs Telecommunications Fixed Costs 14

Harvard Business Review

MARCH 11, 2014

First, making significant amounts of your own power at zero variable cost is more than nice; it’s a hedge against volatility and smooths out expenses, which makes business planning easier. In addition, the story you tell customers can affect sales.

ROI 9

ROI Variable Costs Energy Benefits 9

Harvard Business Review

MAY 18, 2018

per month per subscriber, and three movie tickets costs nearly $30, on average, meaning it’s losing nearly $20 per month per subscriber on a variable cost basis. The second problem: Movie theater operators don’t want MoviePass to succeed because they fear its model will permanently devalue ticket prices.

Advertising 8

Advertising Variable Costs Revenue Operations 8

Harvard Business Review

AUGUST 3, 2018

Investors, therefore, look not just for reported revenues but for drivers behind the revenues, especially because digital companies’ operating activities often differ from their revenue-generating activities. The first category should describe the amount spent on supporting current operations.

Variable Costs 8

Variable Costs Revenue Assets Accounts 8

Harvard Business Review

OCTOBER 25, 2017

This profusion of products means that Philips is cash-rich, yet sales have stagnated in the last decade, and concerns about the company have been reflected in its stock price. It now has around 10,000 operating projects. Revenues will be generated progressively over long periods of time, instead of right after the sale of a product.

Revenue 8

Revenue Variable Costs Sales Sales 8

Harvard Business Review

NOVEMBER 30, 2018

Car sales in the U.S. But car sales are now probably past a cyclical peak, not only in the U.S. Capital-intensive factories have a high-fixed-cost, low-variable-cost operating model. Every day GM operates such factories, it expends more resources that could be redeployed elsewhere.

Fixed Costs 14

Fixed Costs Assets Cash Flow Variable Costs 14

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. More usage funds more infrastructure.

Advertising 16

Advertising Variable Costs Scaling Media 16