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.
B. Use fixed cost ICDs with more customers
By using fixed cost ICDs with more customer volume, the unit cost of the ICD declines as a component of the final Output cost.
Combine fixed cost ICDs with competitors into a separate business. Combine ICDs from the major cost functions of the company
|1||3312||2004||Posco has invested $800 million in 14 Chinese joint ventures. By 2006 the company plans some $1.4 billion in fresh investment in China, especially in galvanized and stainless steel to supply global auto and appliance makers that have opened plants there.|
|2||3711||2002||By pooling their resources, GM, Ford, and Chrysler were more effective in shaping the clean-engine revolution and staying ahead of would-be insurgents than they would have been if each had tried to do so independently.|
|3||4213||1996||Regional LTL carriers positioned themselves to take on the nationals on multiple fronts. NE Motor Freight and AAA Cooper forged a partnership to provide two and three day transit between the northeast and southeast.|
|4||4911||2006||In an effort to compete against big players in the nuclear-power industry, General Electric and Hitachi agreed to combine their nuclear power business which uses boiling-water reactors. GE will have a 60% stake in the venture while Hitachi will have the rest. The move comes at a time of significant industry consolidation. Reactor makers need partners to share the costs and the risks associated with gaining regulatory approval.|
|5||5942||2000||Threatened by fierce online competitors Book of the Month Club and Literary Guild agreed to form an alliance arranged by the companies that control them: Time Warner Inc. and Bertelsmann AG. The deal involves no exchange of money or shares.|
|6||6512||1999||Simon Property Group and Time Warner plan to merge the experience of retail and etail through a network of kiosks, broadcasts, web sites, print media, and live entertainment.|
|7||7376||2005||Electronic Data Systems is partnering with Towers Perrin and spending $420 million on a venture to allow corporations to outsource their human-resources departments. EDS has failed to increase sales in recent times due to increasing competition from giants like IBM and low-cost rivals in India. Its financial problems have scared off potential clients.|
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