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.
Use fixed-cost ICDs withnew customer segments. Sell ICDs in major cost functions of the company
|1||2834||2006||Pfizer Inc. is planning to introduce a heavily discounted generic version of the antidepressant Zoloft after the brand-name drug loses domestic patent protection. Pfizer’s plans for Zoloft follow Merck & Co.’s move to undercut generic-drug makers offering copycat versions of Merck’s Zocor when it lost patent protection. Until recently, brand-name drug makers walked away from hit medicines once their patent exclusivity elapsed. But facing patent losses on drugs with $39 billion in sales over the next couple of years, as well as a scarcity of new drugs, more brand-name companies are tapping into the generics business to retain a sliver of sales and to weaken competition from traditional makers of generics over the long haul.|
|2||3571||2002||Instead of gathering a sales team to peddle HP’s new Indigo printers, the company is using its existing sales force. The printers will be advertised as cost saving machines that work especially well with HP computing hardware.|
|3||4513||1996||RPS and Airborne have an informal alliance to work together to win some accounts from competitors.|
|4||4812||2006||Verizon and other U.S. cellphone companies are now betting they can make more money by allowing consumers to buy mobile content outside of their branded portals, although they’ll get a smaller slice of revenue. Verizon has signed agreements with several companies that sell games, ringtones, and other mobile content, such as VeriSign Inc., Yahoo Inc., and Thumbplay Inc. The carriers hope that opening up to more content partners will help them cash in on the growing mobile content market that will reach an estimated $11 billion in the U.S. by 2010 – and offset the decline in mobile voice revenue.|
|5||5411||2006||Wal-Mart’s largest non-American operation, Asda, has been struggling recently as its top local rival, Tesco PLC, is thriving. The data-driven strategy puts Tesco at the vanguard in retailing as traditional advertising loses effectiveness. Procter & Gamble, Coca-Cola Co. and Kimberly-Clark Corp. are among the consumer-products companies that buy analyses based on Tesco data.|
|6||6211||1991||Four of five of Tritech’s operations do some outside work, including financial printing, computerized statement billing, and bundling proxy projects.|
|7||7372||2004||PeopleSoft and Siebel Systems sell Linux versions of some of their products. Three years ago, Red Hat began wooing the big vendors of platform software, which serves as groundwork for lots of other programs.|
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