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 with new customer segments. Sell ICDs in major cost functions of the company:
Sell Create ICDs

No.	Industry SIC	Year	Notes
1	2399	2004	When Levi began to sell to Wal-Mart Stores last year, it overhauled its entire operation, from design to production, pricing to distribution. Levi launched a segmentation strategy. It would sell different versions of jeans for different prices, from Levi Strauss Signature jeans to $150 upscale vintage designs. The sales didn't go as well as it had planned at Wal-Mart and different department stores. Levi was forced to sell to Costco Wholesale Corp., which it originally thought would tarnish Levi's brand image. Wal-Mart also slashed the price of a basic pair of men's Levi Strauss Signature jeans to $19 from $23.
2	2800	1993	Dow decentralized too much, letting its managers operate too independently from the rest of the corp. Now more centralized again. Also, now, if Dow can't use an invention, it licenses the technology to outsiders for a fee instead of sitting on it.
3	2834	2004	Pharmaceutical companies have found a new way to thwart generic-drug makers trying to muscle in on the patents of their medicines: Don't fight a copycat drug maker; court its rivals instead. By selling the distribution rights of a drug to an “authorized generic” manufacturer, the pharmaceutical company can cut into the profits of an other generic-drug maker which rushed out a copy of a branded drug going off-patent. Watson Pharmaceuticals and Par Pharmaceutical Co., have been two of the main companies selling authorized-generic drugs.
4	2834	2006	The big Indian pharma companies, Dr. Reddy's Laboratories Ltd. and Ranbaxy Laboratories Ltd., are getting a taste of their own medicine as new copycat rivals spring up. It's getting harder to make profits as major Western drugmakers fight back. For instance, Ranbaxy recently lost a high-profile battle with Pfizer Inc. over generic rights to the cholesterol drug Lipitor. And Big Pharma companies have started selling their own generic versions of blockbuster drugs once their patents expire. The result has been pricing pressure that is quite brutal.
5	3570	1990	HP uses technology from its instrumentation business in half a dozen highly differentiated markets, from oscilloscopes to cardiac analyzers.
6	3571	2002	IBM agreed to license its thin client technologies to Neoware, to stop making its NetVista thin client product line, and to name Neoware as its preferred provider of thin client appliance products.
7	3571	2004	IBM Corporation adapted quickly to the demand for cheaper servers and the competition from Intel-based servers, unlike many other companies. With the further improvements in the Intel servers, IBM moved its xSeries organization into their server group with the idea of being able to leverage all their mainframe experience and skills and take that functionality into the Intel server space. IBM created its xSeries to fit scale-up environments (big systems with many processors) and scale-out environments (cheaper machines linked together to share the workload).
8	3695	2002	Sonic, the leading digital recording company, has announced deals with Dell Computer Corp. and Hewlett-Packard Co. in which the latter companies have promised to endorse Sonic technology.
9	3711	1990	When Honda invested to develop multi-valve cylinder heads with self-adjusting valves, it applied the technology to motorcycles, cars, lawn mowers, and power-generation equipment.
10	3861	1990	Canon exploits its basic investments in optics and lens grinding across the markets for photolithography, cameras, and copiers.
11	3861	2000	Kodak has developed a display based on organic light emitting diode (OLED). It has licensed this technology to other manufacturers. It gets a one time license fee, sells the chemicals for the product, and gets a royalty per unit sold.
12	7372	2000	Trend Micro's strategy was to license its technology to Intel in order to penetrate the U.S. market. Intel signed a contract of 5-year exclusivity.
13	7372	2004	Competition between Red Hat and Novell is increasing as vendors move to bring Linux to desktop PCs. Hewlett-Packard made a deal with Novell to start selling Novell's SuSE-brand Linux on its business PCs in the second half of the year, along with SuSE Linux for business servers and a similar Linux product from Red Hat. IBM has a $50 million investment in Novell. Big Blue sells both Red Hat and Novell versions of Linux and is pushing for Linux on desktop PCs as well. Dell sells Novell's SuSE on some systems, but prefers Red Hat as its Linux Vendor. Sun Microsystems sells neither, but sells its own Linux-based Java Desktop System and has scored a deal to power the desktop PCs sold at Wal-Mart.
14	7372	2005	In an effort to push back against Google, Yahoo, and other rivals, Microsoft has created a new series of Web services. These services are online counterparts, accessible through any browser, to its Windows and Office franchises and will be largely paid for by advertising. Windows Live will be for consumers, and Office Live will be for small businesses.
15	7378	2006	Electronic Arts Inc. expects to see an increase in revenue from its 'Dynamic' ads in its Need for Speed Game. It estimates the game will bring in between $4 million and $5 million in advertising revenue during the holiday quarter from Need for Speed. A little more than 50% of the game's expected advertising revenue this quarter will come from traditional "static" advertisements that players have long seen inside games – for instance, billboards promoting various brands that were included in the game before it was published. Just under half of Need for Speed's advertising revenue will come from "dynamic" advertisements, which are regularly transmitted over the internet and inserted into the action of the game, a source of revenue that hasn't existed in previous EA games.
16	7379	2002	Nexpansion last week began working with two grocery chains in the Northeast to test a new service called Endless Aisles. The service lets consumer purchase hard-to-find products on a grocer's Web site or in special kiosks located in retail stores.
17	7922	2005	About 80% of Broadway shows lose money. Due to escalating costs, many must play to sold-out houses for more than a year just to break even. Aside from Walt Disney Co., few producers have the financing to open a show on their own. It is not uncommon for a show to need as many as 50 investors. And to make musicals financially viable, there usually needs to be a national tour, overseas productions, merchandising, and a cast album.
18	7990	1987	Crowded animation field prompting some companies to take their cartoons elsewhere. Taft is marketing Hanna Barbera on videocassette. Warner Bros. marketing 4 Looney Tunes videocassettes.

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