Increase the Output Over Which a Fixed Cost ICD is Used
This action reduces the quantity of a unique fixed cost ICD used to produce a unit of Output by increasing the units of Output. For example, a new product design, or a new process patent, are both ICDs that have virtually limitless capacity for use. These are fixed cost ICDs. You pay for them once and you can use them over a virtually unlimited amount of Output. Their ICD/O ratios are limited only by the current demand level for Output.
Acquire similar organization to spread fixed cost ICDs
The acquisition of another organization with a similar business enables the company to take certain fixed cost ICDs in the form of processes and designs and use them over a larger amount of Output.
Buy company in same market: For price point for product family addition to product line:
Buy lower price point
|1||2085||1989||Glenmore, one of the few smaller distillers left, is banking on building a niche in mid-priced brands. Last year, Glenmore acquired 2 liquor companies that sell to middle-income Americans. Glenmore says it needs to achieve a certain critical mass.|
|2||3699||2003||Zebra Technologies has a 30% to 35% share of the U.S. market for thermal printers used in barcode labeling. Its huge profits help with its acquisitions, which in turn broaden its product line. Recently, it added mobile and desk-top bar-code printers.|
|3||3711||1998||Mercedes-Benz had made an agreement with Chrysler to take over for $38 billion. Mercedes felt that they could no longer build only for the rich because that market had become overcrowded. They are planning to make cars that cover the whole market.|
|4||4911||1996||Wheelabrator completed in November its third acquisition of an "on site" co-generation facility this year. The purchase price was $30 million.|
|5||7372||2005||Oracle recently bought PeopleSoft for $10.3 billion, a takeover which merged the number 2 and number 3 business software companies. Oracle plans to cut 5,000 PeopleSoft and Oracle workers. Business software leader SAP has picked up new clients as a result of the uncertainty around Oracle's new acquisition. Firms ranging from massive Microsoft to small Taleo are working to lure in PeopleSoft users.|
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