Harvard Business Review

JULY 2, 2014

These costs are fixed because they will not change with the number of kites sold. Therefore, the unit variable costs to make a single kite is: $50 ($20 in materials and $30 in labor). What if we change the variable cost of producing a good? How much would sales need to increase to compensate for the extra cost?

Variable Costs 10

Variable Costs Fixed Costs Sales Sales 10

Harvard Business Review

MAY 8, 2012

This week, Microsoft is announcing an unusual initiative that it hopes will change how the company operates: an internal fee on carbon. As Microsoft takes on more of its customers' operations through cloud-based services, reliance on the utility grid creates real operational and price risk (from outages and volatile prices).

Energy 16

Energy Variable Costs Travel Operations 16

Harvard Business Review

FEBRUARY 7, 2012

But amidst a seemingly scripted set of responses on Walmart's supply chain and operational greening efforts, the discussion took an interesting turn. In essence, Bedore was saying that Walmart recognizes that it can help take the solar market to scale, thus lowering its costs in the future.

ROI 15

ROI Variable Costs Energy Scaling 15

Harvard Business Review

JUNE 20, 2012

Instead, companies seeking to improve the lives of the world's poor should focus on a more realistic route to profitability: They need to elevate gross margins far above the company average by pushing down variable costs and boosting the price consumers are willing to pay for a unit of product. Offer an enabling service.

Variable Costs 15

Variable Costs Banking Sales Sales 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

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 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 Innovation Marketing'

Advertising 14

Advertising Variable Costs Media Fixed Costs 14

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 Cash Flow 8

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. The problem then is not with the value creation, but with the tool of ROI and how we define it.

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

SEPTEMBER 4, 2013

For example, a decade ago, it''s unlikely that small-business owners would have told you that they needed a flexible way to host data and applications, one that preferably turned the fixed cost of computer hardware into a variable cost of renting capacity.

Fixed Costs 8

Fixed Costs Variable Costs Assets Banking 8

Harvard Business Review

OCTOBER 25, 2017

It now has around 10,000 operating projects. It is easier to price a product, for which most of the fixed and variable costs are known, than a project, which is influenced by many external factors. Philips is not alone in using an increased focus on selling projects as a means of disruptive transformation. Pricing model.

Revenue 8

Revenue Variable Costs Sales Sales 8

Harvard Business Review

OCTOBER 11, 2017

Financial measures report variable costs broken out by a few major categories (including supplies, drugs, and staff) along with revenue and margin measures. Finally, one medical unit has identified and begun to address high rates of falls, which resulted in increased length of stay and corresponding costs.

Manager 8

Manager Hospitality Variable Costs Implementation 8

Harvard Business Review

JULY 27, 2017

Third, corporate VCs and accelerators are costly and complex to operate, turning them into a slow and expensive innovation tool. Only around 20% of technologies funded by CVC&A grab enough attention of business units to start co-innovation pilot projects with portfolio startups.

Fixed Costs 8

Fixed Costs Variable Costs Administration Media 8

Harvard Business Review

NOVEMBER 30, 2018

Capital-intensive factories have a high-fixed-cost, low-variable-cost operating model. If you greatly reduce the production volume, the cars that do come out have to absorb more of the fixed costs, and that eventually sends the product into a profitability death spiral. That is what GM is trying to do.

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