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Fixed to Flexible - The Ebook

Fixed to Flexible - The Ebook

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Published by Todd Sattersten
Fifty years ago, most of your choices were fixed. There was one grocery store in town with two brands of flour. Your television had a dial with ample room on its face for the one of three networks you’d be watching that night. Go back a little further and you can find names like Rockefeller and Carnegie who amassed fortunes by controlling oil and steel options.

Now the baking aisle stocks dozens of types of flour from all-purpose to self-rising to the oxymoronic white-wheat. Your television now needs a second or even third electronic box to manage the hundreds of networks and to record what you can’t watch in person. And the lessons of steelmakers were picked up by software developers, but the story seems to be ending differently.

Fixed has been replaced with flexible. Control of a product category, distribution channel or branding message no longer exists. While this is being heralded as a boon for customers, companies have been slower to adapt to the new terrain. Companies with multi-national presence and individuals with multitudes of projects both need to create a new set of strategies.

This ebook collects the commercial aspects of cost, price, and margin and presents a variety of alternatives about how to make your way in the world of infinite of choice.
Fifty years ago, most of your choices were fixed. There was one grocery store in town with two brands of flour. Your television had a dial with ample room on its face for the one of three networks you’d be watching that night. Go back a little further and you can find names like Rockefeller and Carnegie who amassed fortunes by controlling oil and steel options.

Now the baking aisle stocks dozens of types of flour from all-purpose to self-rising to the oxymoronic white-wheat. Your television now needs a second or even third electronic box to manage the hundreds of networks and to record what you can’t watch in person. And the lessons of steelmakers were picked up by software developers, but the story seems to be ending differently.

Fixed has been replaced with flexible. Control of a product category, distribution channel or branding message no longer exists. While this is being heralded as a boon for customers, companies have been slower to adapt to the new terrain. Companies with multi-national presence and individuals with multitudes of projects both need to create a new set of strategies.

This ebook collects the commercial aspects of cost, price, and margin and presents a variety of alternatives about how to make your way in the world of infinite of choice.

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Published by: Todd Sattersten on Feb 02, 2010
Copyright:Attribution Non-commercial

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05/10/2013

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1/37
Fixed o Flexible
Four Simple Lessons AboutCost, Price, Margin and The OptionsAvailable to The 21st Century Business
by Todd Satersen 
Version 1.13 - March 29, 2010
 
2/37
Inroducion
Fity years ago, most o your choices were xed. Tere was one grocery storein town with two brands o four. Your television had a dial with ample roomon its ace or the one o three networks you’d be watching that night. Goback a little urther and you can nd names like Rockeeller and Carnegie who amassed ortunes by controlling oil and steel options.Now the baking aisle stocks dozens o types o four rom all-purposeto sel-rising to the oxymoronic white-wheat. Your television now needsa second or even third electronic box to manage the hundreds o networksand to record what you can’t watch in person. And the lessons o steelmakers were picked up by sotware developers, but the story seemsto be ending dierently.Fixed has been replaced with fexible. Control o a product category,distribution channel or branding message no longer exists. While this isbeing heralded as a boon or customers, companies have been slower to adaptto the new terrain. Companies with multi-national presence and individuals with multitudes o projects both need to create a new set o strategies.Tis ebook collects the commercial aspects o cost, price, and margin andpresents a variety o alternatives about how to make your way in the world o innite choice.
 
3/37
The Players
Tis ebook is about two points and the distance between them.Price is the amount you can charge or the product or service you provide.Nothing dicult there.Cost is the debt you incur or providing that product or service to yourcustomer. o complicate things a little, we are going to dene cost as acombination o the variable costs (e.g. materials) and the proper allocation o xed costs (e.g. rent). Tis orces us to straddle the ence between economicsand accounting and bend the rules o both.Te space between price and cost is margin. Accountants like to use the wordprot. Stock market analysts talk about earnings. Tey all mean the samething: what’s let over ater all is said and done.By its nature, margin is a secondary measurement, one that we can know only by rst knowing price and cost, but margin is also the most importantmeasure in any business.
$
PriceCosMargin

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